Ethereum’s Supply Goes Down as Burning Goes Up
Following The Merge, Ethereum transitioned from a proof-of-work to a proof-of-stake consensus mechanism, reducing over 100,000 coins in the ether supply.
According to ultrasound.money, the total supply of ether has decreased by 103,092 coins in the last 217 days, valued at over $200 million.
If The Merge had not occurred, and Ethereum continued to be secured by miners rather than stakers, the ether supply would have increased by 2.52 million coins or $4.9 billion annually. However, post-Merge, the ether supply has decreased by 0.144% per year.
Additionally, $1.2 billion is expected to be removed from the ether supply in the same period, according to ultrasound.money. The current supply of ether is roughly 120,418,032 million coins.
The burning of ether was triggered by Ethereum Improvement Proposal 1559, which was implemented via the London upgrade. This proposal split transaction fees into a base cost and a priority fee, with the former being burned and the latter serving as payment to miners.
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EIP-1559 has exerted deflationary pressure on the ether supply, as the base fee gets burned and can no longer be used on the network. Since London went live, the total supply of ether has increased by 3.21 million coins.
The burning of ether has increased since Ethereum’s Shapella upgrade, which enabled staked ether withdrawals just over a week ago.
At the time of writing ETH is trading at $1,925 after a 9% price drop in the past 7 days.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
