Why did this happen?

EIP-1559 is intended to increase deflationary pressure on the network. And from all evidence it seems to be working as intended.

In brief:

A code change that lets transaction fees be burned.

Pressure has been placed on the Ethereum network.

This pressure has caused the price of Ethereum to soar in the last 24hrs.

The code was implemented last month and has slowed the creation of Ethereum and has actually meant that more is being burnt than created. This means there is less ETH in supply making it worth more. Awesome.

Images courtesy of Scott Lewis

The code change went into effect on August 5th. and a whopping 188,000 ETH has been burned already according to Ultrasound Money which has been tracking the EIP-1559 code change.

The change has directly fueled a price rise for the currency. Ethereum has climbed from $2,516 on August 4 to $3,926 today—a 56% increase in one month.

ETH has gone from $2,516 on August 4th 2021 to $3.926 at the current time of writing and no doubt will continue to rise over the next few weeks.

Very exciting stuff and We here at Cryptonomical will keep you all updated on the latest changes in the Crypto world.