NEWSLETTER
After the transition from proof-of-work (PoW) to proof-of-stake (PoS), Ethereum’s annual issuance rate dropped to a negative 0.057%, according to statistics 158 days after The Merge. Metrics indicate that more ethereum tokens have been minted than have been issued, and if the chain were still under PoW consensus, 1,823,678 ether would have been minted to date.
Negative annual Ethereum issuance and Ether unlocked in March could change the balance
Statistics from the analysis website ultrasound.money show that the Ethereum network is deflationary these days. More than 1.023 million ether are removed from circulation annually, according to metrics following the implementation of EIP-1559 in the London hard fork. Since the transition from proof of work (PoW) to proof of stake (PoS) known as The Merge, the current annual issuance rate is negative 0.057% or -29,797 ether.
The data shows that more Ethereum (ETH) it is being taken out of circulation while it is being broadcast. If Ethereum were to continue using PoW, the issuance rate would increase by approximately 3.49% per year. As of 10:30 am (ET) on February 20, 2023, data indicates that 1,823,678 ethereum tokens would have been added to the number of coins in circulation according to the PoW consensus. As of 10:55 a.m. (ET) on the same day, approximately 120,491,331 Ethereum (ETH) the tokens are in circulation.
In that same time, 16,763,815 ether it is locked in the Beacon Chain contract, and when the Shanghai update occurs in March, many of those coins could be released from their locked state. Locked ether accounts for $28.61 billion of the second-largest cryptocurrency’s $205.77 billion market valuation, or 13.91% of circulating supply and market value. According to statistics from ultrasound.money, Ethereum’s current annual issuance rewards are 4.1%, and the consumption rate for non-participants is 1.8% per year.
What do you think the future holds for Ethereum’s issuance rate and circulating supply as the network continues to transition to proof-of-stake and roll out updates like the upcoming Shanghai update? Share your thoughts in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons, Editorial Photo Credit: ultrasound.money
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