Ropsten, the ethereum testnet has successfully upgraded earlier this Thursday, with the fee market reforming Ethereum Improvement Proposal (EIP) 1559 now live in test conditions.
For the first time we can now see how this works in practice, with a site tracking the amount of eth that is being burned by the block.
As can be seen above, one or two eth are being burned by the block, with 85.13 ETH being burned in the past 64 blocks while we were observing.
In total, 1,238 eth has been burned since the upgrade 12 hours ago at block 10,499,401, worth $2.5 million.
These are monopoly eth as Ropsten is a testnet environment that tries to replicate as much as possible the live environment to see how it all works before launching on mainnet.
Two further testnets are to upgrade in the next two weeks, and if all goes well, this then goes live by the end of next month or in early August.
Once it does, the same thing currently happening on the testnet should occur on the mainnet as well.
The site in question thus will probably be updated to connect to the mainnet, at which point we all will see the burning by the block of real actual eth at a variable rate depending on just how much the network is used.
This burning is due to the setting of a base fee by the protocol itself to stabilize network fees. To maintain incentives, that base fee is then burned – effectively destroyed or erased, the eth ‘vanishes’ into an address to which no one has the private key because it is the address of the protocol itself, of the ethereum nodes collectively – rather than it being distributed to miners.
As such during high congestion more will be burned in base fees than is given to miners in block rewards, so having the potential to contract ethereum’s total supply.
The testnet should further provide some insight on the relationship between the new base fee upgrade and fee predictability as well as network capacity, with this unique change among prominent blockchains now being at its final stages before it goes live.