Avalanche burned $16.7 million of AVAX over last week, 10 times more than the week before

Avalanche users have burned 439,000 AVAX -5.091% , worth $16.7 million, over the last week when making transactions — reducing the token’s circulating supply.

On the Avalanche network, all transaction fees are burned. Transaction fees within the network are based on the EIP-1559 design, which introduced a burn element to transaction fees on Ethereum. The difference is that Ethereum pays part of the transaction fee to validators and burns the rest, while Avalanche burns both.

The spike in burned fees is considerable. Between May 2022 and October 2023, only a few thousand AVAX would be burned each week, with a peak of 39,000 in one day in April 2023. At the end of November, there was a spike to 85,000 AVAX and then 40,000 AVAX two weeks later. Yet no week has ever come close to this week’s burn.

The amount of AVAX burned per week has shot up. Image: Dune Analytics/Hildobby

This surge appears to be largely due to the rise of inscriptions across Avalanche and other blockchains (initially spreading from Bitcoin). Inscription-related transactions are responsible for 75% of the transaction fees paid — and burned — on Avalanche over the last week, according to a Dune Analytics dashboard created by Hildobby, a pseudonymous researcher at VC firm Dragonfly. Avalanche users paid $13. 8 million in fees for these transactions.

Inscription-based tokens are created by writing text in normal blockchain transactions and using an off-chain numbering system to keep track of them. They were created as a workaround on the Bitcoin network owing to its lack of native support for tokens. They’ve recently spread to many other blockchains for various reasons, one of them being that they can be cheaper to move around than native tokens. 

In total, 3.4 million AVAX have been burned through transactions, amounting to $129 million at current prices.