ETH Supply Hits New Low Since The Merge
The vibrant activity on the Ethereum network in the first two months of 2023 has contributed to a continued decline in ETH supply.
According to data from Ultrasound.money, as of the morning of February 21, 2023, the supply of Ethereum (ETH) has decreased by over 30,600 ETH since The Merge event in September 2022. This reduction has led to a deflationary rate of 0.058% per year for the world’s second-largest cryptocurrency network.
Compared to Coin68’s statistics from a month ago, ETH supply has dropped by an additional 28,000 ETH in February alone.
This is the most significant decrease in ETH supply since Ethereum transitioned to a Proof-of-Stake (PoS) consensus mechanism with The Merge, moving from mining to staking for transaction validation. PoS has reduced the network's energy consumption by 99% and cut annual ETH issuance from +3.488% to -0.058%.
Comparison of Supply Growth: Ethereum Proof-of-Work (dashed line), Bitcoin (orange line), and Ethereum Proof-of-Stake (blue line). Screenshot from Ultrasound.money at 11:45 AM, February 21, 2023
Had Ethereum continued using Proof-of-Work, the circulating supply would have increased by 1.8 million ETH instead of the current decrease of 30,600 ETH.
Additionally, the EIP-1559 coin burn mechanism continues to exert pressure on ETH supply due to increased activity on Ethereum.
In the past seven days, Ethereum has burned over 26,100 ETH through EIP-1559, with leading contributors being the DEX Uniswap, NFT platforms Blur and OpenSea, ETH transfers, and USDT transfers. Notably, Blur, a recently emerging NFT platform, has become the second-largest contributor to ETH burn, even causing a spike in ETH transaction fees during the recent BLUR token airdrop event.
Over the past 30 days, nearly 81,700 ETH has been burned.
ETH Burn and Top Ethereum Fee Burners in the Last 30 Days Screenshot from Ultrasound.money at 11:45 AM, February 21, 2023
Ethereum (ETH) has experienced a strong recovery in the first two months of 2023, thanks to the resurgence of the cryptocurrency market. From a price of $1,196 on January 1, ETH reached a new year-to-date high of $1,742 on February 16, marking a 45.6% increase.
ETH is currently at its highest price level since September 2022.
ETH/USDT 1D Chart on Binance at 11:45 AM, February 21, 2023
Looking ahead to March, Ethereum plans to proceed with the Shanghai upgrade to unlock the 16.6 million ETH held in staking contracts. The Shanghai upgrade is currently being tested on Ethereum’s testnets, with the actual hard fork date to be announced soon.
