Since the London upgrade on August 5, 2021, Ethereum has undergone a significant economic shift with the introduction of EIP-1559. This upgrade implemented a fee-burning mechanism for all on-chain activities—including token transfers and NFT minting—effectively reducing the overall supply of ETH. Each transaction's base fee is permanently burned, creating a deflationary effect that benefits all ETH holders.
According to ultrasound.money, over 2.8 million ETH, valued at approximately $3.4 billion, has been burned in the 516 days leading up to January 4, 2023. This translates to an annual burn rate of around 2 million ETH, or about 3.77 ETH burned per minute.
Leading Applications by Gas Consumption
Which applications and smart contracts contribute the most to this gas consumption? Here’s a look at the top 10 leaders in gas usage:
- Ethereum Transfers: Topping the list, basic ETH transfers have burned over 253,000 ETH since the London upgrade, accounting for about 9.03% of the total burned.
- OpenSea (NFT Trading): The leading NFT marketplace has burned over 230,000 ETH, representing 8.21% of the total. When combined with its trading contract (ranked sixth, burning over 70,000 ETH), OpenSea’s total consumption exceeds 300,000 ETH, making it the largest gas consumer overall.
- Uniswap V2: This decentralized exchange version has burned approximately 144,300 ETH, or 5.15% of the total.
- USDT (Tether): The widely used stablecoin has consumed around 123,300 ETH in gas, accounting for 4.4%.
- Uniswap V3: The upgraded exchange version burned about 111,900 ETH, or 3.99%.
- OpenSea (Trading Contract): As noted, this contract burned over 70,000 ETH.
- Otherdeed by Yuga Labs: The land NFT for the Otherside metaverse project burned 56,000 ETH.
- MetaMask Swap: The built-in swap feature in MetaMask consumed 54,000 ETH.
- USDC (USD Coin): This stablecoin burned 51,000 ETH.
- Uniswap V3 (Router Contract): An additional router contract burned 47,800 ETH.
The top 10 applications each burned over 47,800 ETH, with the top 27 all exceeding 10,000 ETH burned. Beyond basic transfers, leading projects like OpenSea, Uniswap, and major stablecoins dominate gas usage.
Key Sectors Driving Gas Consumption
Breaking down gas consumption by sector reveals which areas are most active, even during bear markets.
Decentralized Finance (DeFi)
DeFi remains a cornerstone of Ethereum’s ecosystem, with decentralized exchanges (DEXs) facilitating asset swaps and liquidity flow. Uniswap is the clear leader, with its V2 and V3 versions combining for over 300,000 ETH burned—about 10.86% of total ETH burned.
Other notable DeFi projects include:
- 1inch v4 (DEX aggregator): over 25,000 ETH burned
- SushiSwap: around 23,000 ETH burned
- 1inch v3: approximately 16,000 ETH burned
Beyond DEXs, no other DeFi subtypes feature prominently in the top gas consumers.
Non-Fungible Tokens (NFTs)
The NFT sector, led by marketplace giant OpenSea, shows significant gas usage. However, specific NFT projects also contribute substantially.
Data from Oklink indicates that daily gas consumption on Ethereum correlates closely with market trends. While 2021 saw high activity, 2022—especially after the Terra collapse in May—witnessed a decline in both prices and gas usage.
A notable exception was May 1, 2022, when gas consumption spiked to 80,000 ETH in a single day, setting a record. This surge was not due to increased transaction volume but rather to the minting of Otherdeed land NFTs for Yuga Labs’ Otherside metaverse project. The event caused gas fees to spike to nearly 10,000 Gwei.
In just eight months, Otherdeed burned 56,000 ETH, ranking it seventh overall. On a monthly average, it would surpass Uniswap V3. According to Nansen, the launch of Otherdeed pushed Ethereum’s weekly trading volume to $1.6 billion in early May 2022, far exceeding other periods.
Other NFT projects, like ENS, burned only 24,000 ETH in comparison, highlighting Otherdeed’s dominance.
Stablecoins
While NFTs and DeFi often grab headlines, stablecoins have steadily grown in the background. USDT leads this category, burning 123,300 ETH, followed by USDC with 51,600 ETH burned. No other stablecoins come close.
Interestingly, USDC surpasses USDT in total value secured (TVS), with $41.12 billion compared to USDT’s $32.29 billion. USDC is also the most widely used stablecoin on DEXs, in money markets, and in DAO treasuries, despite being the second-largest by market cap.
Other Notable Contributors
Other applications, like MEV Bots and the Polygon Bridge, have also burned over 10,000 ETH each, indicating diverse activity across the ecosystem.
Looking Ahead
Ethereum’s London upgrade in 2021 introduced fee burning, while the Merge in 2022 transitioned the network to proof-of-stake. From November 9 to December 1, 2022, ETH supply entered a deflationary phase for the first time post-Merge, signaling gradual but meaningful change.
The upcoming Shanghai upgrade, expected in March 2023, will enable withdrawals of staked ETH from the Beacon Chain. This could further impact network activity and gas consumption across all sectors.
👉 Explore real-time gas tracking tools
Frequently Asked Questions
What is EIP-1559?
EIP-1559 introduced a base fee that is burned for every Ethereum transaction, reducing the supply of ETH and creating a deflationary mechanism. This upgrade went live in August 2021 as part of the London hard fork.
Which application burns the most ETH?
When combined, OpenSea’s NFT marketplace and trading contracts burn the most ETH, exceeding 300,000 ETH since the London upgrade. This surpasses even basic Ethereum transfers.
Why did Otherdeed burn so much ETH?
The minting of Otherdeed land NFTs for Yuga Labs’ Otherside metaverse caused a massive spike in gas fees due to high demand. This single event burned 80,000 ETH in one day and contributed significantly to its total burn rate.
How does USDC compare to USDT in usage?
While USDT has a larger market cap, USDC is more widely used in decentralized applications, including DEXs, money markets, and DAOs. It also has a higher total value secured (TVS) according to oracle data.
What is the impact of the Shanghai upgrade?
The Shanghai upgrade will allow users to withdraw staked ETH from the Beacon Chain, potentially increasing liquidity and affecting staking rates. This could influence network activity and gas consumption patterns.
Are there any other sectors besides DeFi and NFTs burning significant gas?
Stablecoins like USDT and USDC are major gas consumers, along with infrastructure tools like MEV Bots and bridges. However, DeFi and NFTs remain the dominant sectors.