Ethereum Supply Surges
The Ethereum blockchain network has recently undergone a notable shift, transitioning from a deflationary state to an inflationary one. This change has been driven by a lower burn-to-mint ratio in the first half of 2024. To date, the cumulative total of ETH burned has reached 4.36 million.
From the beginning of 2024 up to now, Ethereum has emitted 540,958 ETH while only burning 465,657 ETH. This has resulted in a net increase of 75,301 ETH in its circulating supply, marking a significant change in Ethereum’s token economics.
Ethereum Flips to Inflationary Trend
Between the fourth quarter of 2022 and the first quarter of 2024, Ethereum exhibited deflationary characteristics. During this period, the network emitted 220,454 ETH, but a higher burn rate of 333,555 ETH effectively reduced the overall supply by 113,100 ETH. However, this trend reversed in the second quarter of 2024 as the network experienced decreased activity, leading to an inflationary phase.
In the second quarter of 2024, Ethereum emitted 228,543 ETH while burning only 107,725 ETH, resulting in an increase of 120,818 ETH in circulation. July 2024 saw the lowest monthly burn rate on record for the year, with just 17,114 ETH burned, marking a 35% decline from June’s figures.
Since the enactment of EIP-1559 in June 2021, which implemented a system for burning part of the transaction fees, Ethereum has burned over 400,000 ETH. The cumulative total of ETH burned stands at 4.36 million.
Uniswap Leads ETH Burning
Uniswap has been at the forefront of ETH burning, eliminating 71,915 ETH from the market in 2024, including 2,470 ETH in July alone. ETH transfers and Tether (USDT) transactions are significant contributors to this burn mechanism.
ETH transfers have resulted in 33,538 ETH being burned, while Tether’s activities have removed 23,332 ETH from circulation this year. Other platforms also participate in burning ETH, though to a lesser extent.
Ethereum Supply Grows with Spot ETF Inflows
Ethereum's transition to an inflationary state coincides with a surge in investor interest, evidenced by a $4.9 million net inflow into the Ethereum spot ETF. This influx marked the first in four trading days and aligned with Ethereum’s 3% price gain, outperforming major assets like Bitcoin and Solana.
As of the latest data, ETH traded at $2,718.94, reflecting a 2.7% price increase in the past 24 hours.
Disclaimer: This content is informational and should not be considered financial advice. Readers should conduct thorough research before making any investment decisions.
