The vibrant activity on the Ethereum network in the first 2 months of 2023 is the reason why the supply of ETH continues to decline.
According to data from Ultrasound.moneythe supply of Ethereum (ETH) as of the morning of February 21, 2023 has decreased by more than 30,600 ETH compared to the time of The Merge event in September 2022, making the world’s second largest cryptocurrency network. achieve a deflation rate of up to 0.058%/year.
Compared to Kyptos’s statistics 1 month ago, the supply of ETH has decreased by more than 28,000 ETH in February.
This is the highest ETH decline since Ethereum switched to using the Proof-of-Stake consensus mechanism thanks to The Merge, switching from mining to staking coins to validate transactions on the network. Proof-of-Stake has both reduced the amount of electricity consumed by 99% of the network, and reduced the annual ETH generation from +3.488% to -0.058% as it is now.
If still using Proof-of-Work, the circulating supply of Ethereum at this time should have increased to 1.8 million, not 30,600 ETH like now.
In addition, the EIP-1559 transaction fee burning mechanism continuously puts pressure on ETH to burn thanks to the increase in activity on Ethereum.
In the last 7 days, Ethereum has burned more than 26,100 ETH thanks to EIP-1559, with leading protocols including Uniswap DEX, NFT Blur and OpenSea exchanges, ETH transfers and USDT transfers. Notably, Blur is a new NFT exchange that has emerged recently but has taken the position of contributing the second highest burned ETH, even causing ETH transaction fees to skyrocket during the BLUR token airdrop event in the middle of the year. month.
Considering the 30-day frame, the amount of Ether burned up to nearly 81,700 ETH.
Ethereum (ETH) is having a strong first two months of 2023 thanks to the return of the cryptocurrency market. Compared to the $1,196 mark on January 1, the ETH price on February 16 has set a new high of the year at $1,742 – an increase of 45.6%.
ETH is currently in its best price zone since September 2022.
Until March, Ethereum still kept the plan to carry out the Shanghai upgrade to unlock the amount of 16.6 million ETH held in the staking contract. Shanghai is in the process of testing on Ethereum testnets and the actual hard fork date will be announced in the near future.
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