Ethereum‘s latest upgrade, Dencun, activated on March 13, is not the primary cause of a significant decrease in Ethereum’s total supply; instead, the previous major upgrade, The Merge, is credited for this reduction. Blockchain data analysis from CryptoQuant reveals that Ethereum’s supply has dipped to its lowest since August 2022 shortly after The Merge, which marked Ethereum’s transition from proof-of-work to proof-of-stake.
Ethereum’s Accelerated Supply Reduction
The reduction in Ethereum’s supply has recently accelerated to a rate unseen since May 2023, with a 0.872% annual decline in the past 30 days as per Ultrasound Money’s data. This is a stark contrast to the 0.246% decline rate post-The Merge. Julio Moreno, CryptoQuant’s head of research, attributes this to heightened Ethereum network activity, leading to increased transaction fees and more fee burning. Since The Merge, data shows that over 1.56 million Ethereum has been burned, with less than 1.12 million Ethereum issued, resulting in a net decrease of over 446,000 Ethereum, worth around 1.62 billion dollars.
Heightened Network Activity and Record Transactions
While Solana‘s network activity has garnered much attention, Ethereum’s network continues to impress with its level of activity. The average number of transactions over seven days is nearing a 12-month high, with 1.26 million transactions recorded on March 16. Ethereum’s active addresses have also hit a peak for the year and the past 12 months, with approximately 540,000 active addresses.
In tandem, new Ethereum addresses have surged to the highest count in 12 months, with over 120,000 new addresses on March 16. On the same day, the Ethereum ecosystem witnessed a transaction volume exceeding 7 billion dollars, marking the highest volume in two months.