Burnt Supply

Contents

• Total Base Fees Burnt

Total Base Fees Burnt

Definition

The total Base Fees paid for transactions during a time interval (e.g. 1 day).

The concept of a Base Fee was introduced as part of EIP-1559 and it represents the portion of the total transaction fees that is destroyed and taken out of circulation (i.e. burnt). Ethereum post-1559 requires users to pay for a Base Fee as a prerequisite to include transactions in a block. The Base Fee can go up or down on the basis of the size (in gas units) of the previous block. In times of congestion, where blocks are sequentially increasing in size, paying a Base Fee does not guarantee that a transaction will be included in a block. In such events, users can optionally pay an additional Miner Tip to nudge miners to include their transactions in their block.

Name	MetricID	Unit	Interval
Total Base Fees Burnt (USD)	SplyBurntUSD	USD	1 day, 1 hour
Total Base Fees Burnt (Native Units)	SplyBurntNtv	USD	1 day, 1 hour

Details

• EIP1559 was a highly anticipated proposal that changes how transaction fees are priced in Ethereum, as well as the dynamics of block sizes.

• The proposal activated on the Ethereum Network in August of 2021 and marks one of the biggest changes in monetary policy in the history of cryptoassets.

• Instead of the legacy gas price, 1559 splits transaction fees into two distinct fields: a Base Fee and an optional Tip (also known as a Priority Fee).

• This metric calculates the total Base Fees paid in transactions that have occurred in the network over the measuring period (e.g. 1 day).

• For a thorough review of EIP1559 and the design of its pricing mechanism, please refer to this paper.

Asset Specific Details

• For SOL, this metric is calculated as the sum of the burnt portion of fees paid (50% of all fees paid in the time period) and all incinerated coins/tokens. Does not include coins/tokens sent to ownerless addresses.

Interpretation

• Base Fees fluctuate on the basis of network utilization. If there is high demand for transaction settlement, Base Fees go up, and as demand fades, Base Fees go down.

• The pricing of Base Fees is inextricably connected to size of blocks in the blockchain. Upon the the activation fo EIP-1559, the maximum size of blocks in Ethereum (measured in units of gas) was more than doubled to 30M.

• Although blocks are larger, this pricing mechanism attempts to target an average of 15M gas units per block, and an exponential function is used to increase or decrease Base Fees so that this target is hit.

• If, for example, the previous block was above 15M units of gas, the base fee is increased. If there are several sequential blocks above the 15M target, Base Fees increase exponentially which disincentivizes users from transacting.

• Changes in Base Fees over time can depict changes in demand for block space. When miner tips have to be used due to Base Fees not being enough, this is a sign of network congestion.

Release History

• Released in the 5.0 release of NDP (August, 2021)

Availability for Assets

Coin Metrics CoverageCoin Metrics Coverage

API Endpoints

Burnt Supply metrics can be accessed using these endpoints:

• timeseries/asset-metrics

and by passing in the metric ID's SplyBurnt* in the metrics parameter.

Asset metrics

Returns requested metrics for specified assets. Results for block by block metrics (1b frequency) are ordered by tuple (asset, height, block_hash), all other metrics are ordered by tuple (asset, time). You can change the sorting using sort query parameter. Supported output formats are json (default) and csv, use format query parameter to override it. To fetch the next page of results use next_page_url JSON response field or x-next-page-url CSV HTTP header if present. If multiple metrics are requested in the same time the strict policy for partially available metrics among requested ones is applied:

GEThttps://api.coinmetrics.io/v4/timeseries/asset-metrics

Authorization

api_key

Query parameters

Response

200400401403414

Time series of metrics for an asset.

Body

application/jsontext/csv

data*any

next_page_tokenNextPageToken (string)

Token of the next page results for a given request.

next_page_urlNextPageUrl (string)

URL of the next page results for a given request.

Response

200400401403

{
  "next_page_token": "text",
  "next_page_url": "text"
}

Shell

curl --compressed "https://api.coinmetrics.io/v4/timeseries/asset-metrics?metrics=SplyBurntNtv&assets=eth&pretty=true&api_key=<your_key>"

Python

import requests
response = requests.get('https://api.coinmetrics.io/v4/timeseries/asset-metrics?metrics=SplyBurntNtv&assets=eth&pretty=true&api_key=<your_key>').json()
print(response)

Python Client

from coinmetrics.api_client import CoinMetricsClient

api_key = "<API_KEY>"
client = CoinMetricsClient(api_key)

print(
    client.get_asset_metrics(
        metrics="SplyBurntNtv", 
        assets="eth",
    ).to_dataframe()
)