Ethereum’s First Inflationary Shift in Two Years Coincides with July Network Decline
Ethereum has experienced a shift from deflationary to inflationary in 2024, marking the first time since 2022. Despite burning 465,657 ETH in the year, the network has seen a net addition of 75,301 ETH to its supply.
This transition occurred during Q2 2024 as network activity decreased. In this quarter, 228,543 ETH were generated while 107,725 ETH were burned, resulting in a net increase of 120,818 ETH in the blockchain.
Uniswap continues to be the top burner of ETH, having incinerated 71,915 ETH in 2024. However, its burn rate plummeted by 72.4% from Q1 to Q2 2024, dropping to 15,031 ETH from 54,413 ETH. ETH transfers and Tether (USDT) ranked as the second and third largest contributors to ETH burns, respectively.
July 2024 witnessed the lowest monthly ETH burns of the year, with only 17,114 ETH burned, a 35% decline from June. This contrasts sharply with the peak of 398,061 ETH burned in January 2022 during the last bull market cycle.
Banana Gun and Maestro, trading bots, claimed the fourth and fifth spots in ETH burning in 2024, collectively burning over 20,000 ETH. However, Banana Gun experienced a 74.3% decrease in ETH burning from Q1 to Q2 this year, dropping from 8,364 ETH to 2,150 ETH. The report highlighted a decrease in DEX trading on the supported blockchains as the reason for the decline in its burn rate.
Additionally, Layer-2 blockchain Scroll emerged among the Top 10 ETH burners in 2024, possibly due to users engaging with the network to enhance their potential rewards, as rumors suggest a token airdrop from the network this year.
The data analysis by CoinGecko covered the period from January 1 to August 5, 2024, utilizing Dune Analytics and Etherscan for information gathering.
