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Ethereum Supply Shrinks at Record Pace as Burning Process Accelerates

The Ethereum supply is shrinking at its fastest rate ever, as the burning process accelerates and reduces the available amount of ETH. The record-breaking reduction in inflation has been introduced through EIP-1559, which was launched in mid-September to optimize gas usage.

As a result, many Ethereum tokens are burned through network usage, rather than being created, resulting in negative or reduced inflation.

According to Ultrasound.Money Ethereum tracking tool, the growth in supply over the past month has been -0.33%. On a shorter daily timeframe, inflation is closer to -0.5% at the moment. Since The Merge on September 15, the Ethereum supply has decreased by 72,186 ETH, currently valued at around $130 million.

Source: Ultrasound.Money

Looking ahead, the Ethereum supply is expected to decrease by a further 1.3 million ETH to around 119 million by this time next year. The current burning rate is approximately 123 ETH per hour, and Uniswap is the largest gas burner at present, accounting for about 15% of the total amount burned.

As for the amount of Ethereum staked, there are 17.9 million ETH locked on the Beacon Chain, amounting to an estimated $32 billion, or roughly 15% of the total circulating supply.

Ryan Berckmans recently tweeted a list of achievements for the ETH ecosystem, including the mainnet launch in July 2015, Dai launches in December 2017, community alignment around rollups for scaling in October 2020, and five rollup architectures on the mainnet, including three zk and six zk public testnets, $75 billion stables, and $1 billion tokenized gold on Ethereum in March 2023.

While the Ethereum supply may continue to decrease, the network’s ongoing development and innovation suggest that its value and utility will only increase over time. It will be interesting to see how this trend continues to evolve and what impact it may have on the broader cryptocurrency market.

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