Ethereum Staking Surge Boosts Supply by 15,637 ETH in One Week
Data released by Ultra Sound Money indicates that Ethereum’s supply has grown by 15,637.76 ETH in the past week. This development is part of a broader trend in the Ethereum ecosystem, where supply dynamics are influenced by the interplay between issuance and burn mechanisms. Despite the introduction of Ethereum Improvement Proposal (EIP) 1559 in June 2021 to mitigate inflation through token burns, the recent week has seen more Ethereum minted than burned. The current total supply of Ethereum stands at 120,333,951 ETH, reflecting a modest annualized increase of +0.678%.
The changes in Ethereum’s supply are primarily driven by issuance and burn rates. Over the last seven days, a total of 18,263.28 ETH was issued, while only 2,625.52 ETH were burned. Burns typically function to permanently reduce the total supply by eliminating ETH from circulation with each transaction. However, during this specific timeframe, burns lagged behind issuance, resulting in a net increase in Ethereum’s overall supply.
The delicate balance between issuance and burning plays a pivotal role in determining whether Ethereum’s supply will expand or contract. When more ETH is issued than burned, as observed recently, it leads to an inflationary effect, adding more coins into circulation. This uptick in supply reflects an ongoing pattern where Ethereum’s supply is shaped by network activity and market demand.
Despite the increase in Ethereum’s supply, staking activity on the network continues to strengthen steadily. Over the past week, the total staked ETH witnessed a +0.24% rise, showcasing growing confidence in Ethereum’s long-term potential as more holders opt to lock their assets in staking contracts. Over the previous 30 days, staked ETH has surged by +1.13%, with an even more substantial increase of +4.48% over the last 90 days.
The consistent growth in staking signifies a commitment from numerous Ethereum holders to the network’s future, thereby reducing the circulating supply of ETH. While this week saw a positive net issuance, the increasing volume of staked ETH contributes to reducing the supply available for day-to-day transactions.
Analyzing Ethereum’s supply trends in 2024 reveals a shift in its dynamics. CoinGecko previously highlighted that from the beginning of the year until August, Ethereum emitted 540,958 ETH, while only 465,657 ETH were burned. This resulted in a net supply increase of 75,301 ETH since the start of 2024, indicating Ethereum’s transition from a deflationary phase in late 2022 to an inflationary period this year.
Ethereum’s deflationary attributes were more prominent from the fourth quarter of 2022 to the first quarter of 2024, where higher burn rates reduced the overall supply. However, a decline in network activity in the second quarter of 2024 shifted the balance, leading to an upsurge in the total circulating supply.
