Since April 14, Ethereum’s total supply has increased by over 112,000 ETH. This surge marks a significant departure from the recent trend of reduced ETH burning on the mainnet. The culprit behind this extended phase of increased ETH creation since the 2022 Merge appears to be Ethereum’s Dencun upgrade in March. Ultrasound.money, an Ethereum statistics dashboard, reported this increase.
The Dencun upgrade, implemented on March 13, introduced several Ethereum Improvement Proposals (EIPs), notably EIP-4844, which likely contributed to the inflationary effect. EIP-4844 introduced the “blobs” feature, which optimizes block data fees on Ethereum layer-2 networks by temporarily segregating transaction data. This enhancement also improved data availability for Ethereum’s mainnet block space through proto-danksharding.
Consequently, the total amount of Ethereum burnt on the mainnet has notably decreased. Transaction costs on Ethereum’s layer-2 networks like Arbitrum and Optimism have seen significant reductions as well.
Since the Merge, Ethereum’s overall supply has decreased, despite recent inflationary pressures. Since transitioning to a proof-of-stake consensus mechanism in September 2022, the Ethereum network has introduced 1.36 billion ETH, while burning 1.5 billion ETH. This reduction amounts to 345,000 ETH, valued at over $1.1 billion at current market rates.
Recent market conditions have shown a strong negative trend in the crypto market since mid-June. Bitcoin dropped to $58,402 earlier this week, its lowest level in eight weeks. Ethereum has faced similar selling pressure and is currently trading at $3,373, according to data from CMC.
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