What burns Ethereum?

By directing the base fee to an unretrievable address, Ethereum effectuates a reduction in its total supply. This process, akin to a monetary policy adjustment, helps maintain scarcity and potentially enhances the value of ETH over time.

The destruction of a portion of transaction fees is an innovative approach that Ethereum employs to manage its economic landscape. It incentivizes users to optimize their transactions, as a more efficient use of the network results in lower fees being burned.

As the Ethereum network expands and more transactions take place, the amount of ETH that gets burned correspondingly increases. This phenomenon underscores the network's ability to adapt to its growing user base and maintain stability amidst increasing demand.

The base fee, once calculated, undergoes a pivotal step in the Ethereum network. It is directed to a pre-determined address, a location where it becomes irretrievable. This mechanism serves a dual purpose, both in ensuring the security of the network and fostering a dynamic economy within the Ethereum ecosystem.

The implementation of this fee-burning mechanism underscores Ethereum's commitment to a sustainable and responsible economic model. By reducing the total supply through the destruction of fees, Ethereum promotes a healthier balance between supply and demand.