The Ethereum supply is shrinking at its fastest-ever level. Deflation has hit record levels as ETH burning accelerates.
The burning was introduced with EIP-1559 in mid-September to optimize gas usage. The side effect is more Ethereum getting burnt via network usage than is being produced. This means that issuance is negative or deflationary.
According to the Ultrasound.Money Ethereum tracker, supply growth over the past month has been -0.33%. On a shorter daily time frame, deflation is closer to -0.5% at the moment.
Ethereum deflation and burn rates: ultrasound.money
Ethereum Supply Shrinks by 72,000 ETH
Since the Merge on September 15, Ethereum supply has decreased by 72,186 ETH, worth around $130 million at current prices.
By this time next year, the Ethereum supply is predicted to have decreased by a further 1.3 million ETH to around 119 million.
The current Ethereum burn rate is around 123 ETH per hour. Furthermore, the biggest gas guzzler at the moment is Uniswap, with around 15% of the total burn.
In terms of Ethereum staked, there are 17.9 million ETH locked on the Beacon Chain. This is an estimated $32 billion representing around 15% of the total circulating supply.
There have been concerns about an influx of ETH hitting markets following the Shanghai upgrade next month. However, this is unlikely to happen due to the phased release process, as explained by BeInCrypto recently.
The ‘Shapella’ upgrade will roll out on April 12. It combines changes to the Ethereum Virtual Machine (EVM), called ‘Shanghai,’ and the ‘Capella’ consensus layer. There are also upgrades to the Engine API that links the two layers.
On March 30, industry advocate Ryan Berckmans posted a list of achievements for the barely eight-year-old ecosystem:
Ethereum mainnet launches (Jul 2015) +2.5 years, Dai launches (Dec 2017) +3 years, community aligns around rollups for scaling (Oct 2020) +2.5 years, 5 rollup architectures in mainnet, 3 zk, 6 zk incl. public testnets. $75B stables, $1B tokenized gold on Eth (Mar 2023) ETH
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