Ethereum activity drops ether supply to lowest levels since August 2022
Quick Take
- The total supply of ether has declined to its lowest level since August 2022.
- The ether supply’s rate of decline has been the fastest since May 2023.
- Various on-chain metrics are near or setting new 12-month highs.
Ethereum's latest upgrade, Dencun, was activated on March 13 — but the previous high-profile upgrade has helped decrease the total supply of ether substantially.
As of mid-week, the total supply of ether declined to its lowest level since August 2022, according to data from CryptoQuant cited by CNBC. It was shortly after that date that Ethereum made its most significant upgrade in history by changing from proof-of-work to proof-of-stake — an upgrade known as The Merge.
Furthermore, the ether supply's rate of decline is currently the fastest since May 2023. Over the past 30 days, the ether supply has declined at a rate of 0.872% per year, according to data from ultrasound.money. For comparison, since The Merge itself, the rate of decline has been 0.246%.
“High activity on the Ethereum network has caused high transaction fees and, consequently, more fees burnt," CryptoQuant’s head of research, Julio Moreno, reportedly said in a note Wednesday.
In raw numbers, more than 1.56 million ether has been burned since The Merge, while less than 1.12 million ether has been issued. This has led to a net decline of more than 446,000 ether, worth nearly $1.62 billion at current prices.
Ethereum's on-chain metrics are hot
Though network activity on Solana is largely garnering the spotlight, activity on Ethereum has remained noteworthy.
A seven-day moving average of transactions on the Ethereum network is near its 12-month high recorded in January. According to The Block's data, yesterday, 1.26 million transactions were clocked on the second-ranked blockchain by market capitalization.
“Total daily transactions are hovering around record-high levels not seen since May 2023," Moreno wrote, adding: "High transaction activity causes network fees to spike, more fees being burnt and total supply to decrease.”
Meanwhile, the number of active addresses on the Ethereum network is at year-to-date and 12-month highs. Roughly 540,000 active Ethereum addresses were recorded by The Block's data yesterday.
Similarly, the number of new addresses on the Ethereum network is also at YTD and 12-month highs. Yesterday, more than 120,000 new Ethereum addresses were found on the network, according to The Block's data.
Furthermore, Ethereum's on-chain volume has surged to new YTD and 12-month highs. More than $7 billion in on-chain volume was recorded yesterday, according to The Block's data.
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