Looking at the week’s capitalization of the Ethereum Network, decentralized finance protocols have been widely staking and have burnt 12,403 ETH or $30.6M. The fee burn mechanism included within the Ethereum upgrade under EIP-1559 eliminates transaction fees from circulating supply, reducing ETH supply and its deflationary properties.
TOP #ETHEREUM BURNER #DEFI PROJECTS#Uniswap $UNI #1Inch #Metamask #0xProtocol $ZRX #GnosisChain #KyberSwap #Pendle #Paraswap #Aave $AAVE #Tokenlon $LON pic.twitter.com/lgm4PeA99m
— PHOENIX – Crypto News & Analytics (@pnxgrp) October 13, 2024
Although many projects have participated in this burn, Uniswap has been the biggest contributor, with 2,270.7 ETH burned, amounting to $5.6M.
1inch and MetaMask Closely Following Uniswap
1inch Network burned 192.7 ETH or $474.8K, placing the protocol second among ETH burners after Uniswap. Behind it, one of the most widely used non-custodial wallets, MetaMask, burnt 188.1 ETH or $463.5K in fees. These numbers show that the decentralized exchange and wallet activity in the Ethereum base increased during this period.
Protocols Making a Mark: Ox, Gnosis, and Kyber Network
Other top DeFi platforms include 0x Protocol, which burnt 152.6 ETH ($376K), and Gnosis, which burned 110.6 ETH ($272.5K). Kyber Network also had good figures; it sent 39.6 ETH for total burn, or $97.6K.
Such figures demonstrate why such protocols contribute massively to liquidity, trading volume, and network health.
New Players: Pendle and ParaSwap
Pendle and ParaSwap, relatively new players, spent 32.5 ETH ($80.1K) and 26.2 ETH ($64.5K), respectively. Such projects are gradually emerging and show that the Defi system is gradually evolving.
Aave and Tokenlon Round Out the List
Completing the top five are Aave, one of the largest lending protocols, and Tokenlon, a decentralized exchange. Aave staked and burned 22.8 ETH ($56.2K) towards the pool, while the Tokenlon burnt 14.6 ETH ($36K).
Cumulative Impact and Market Sentiment
The ETH burned in seven days is an indicator of the high level of traffic on the Ethereum platform. Specifically, as gas fees increase alongside network usage, DeFi initiatives contribute significantly to ETH burning, transforming fees into a deflationary mechanism.
This constant burn activity increases investor confidence and helps fuel the narrative of Ethereum becoming a deflationary asset. In the past week alone, $30.6M was wiped out from the market, which indicates deflationary pressure in ETH and could be a factor that will impact the long-term trend.