Analysis of recent ethereum financial data on Ultrasound money reveals a continued change in its economic model since the historic merger in September 2022.
The decrease in ethereum supply stands at 309,663 eth, equivalent to approximately $686.2 million. This reduction reflects a deflationary trend, in contrast to the previous inflationary nature where new eth was constantly being created. The cause of this change can be traced back to the burning of 1,195,238 eth, valued at around $2.65 billion. Permanently removing tokens from circulation plays a crucial role in reducing the total supply and could improve the scarcity and value of eth over time. Furthermore, despite the issuance of 885,581 eth, worth approximately $1.96 billion, the total supply of ethereum saw a net decline, illustrating that the rate of eth burn continues to outpace the rate of new issuances.
Currently, the total supply of ethereum is at the lowest point since the merger with 120,211,380 eth, which translates to a market capitalization of approximately $266.39 billion, reinforcing its important position in the cryptocurrency market.
A look at the eth burning leaderboard presents more information by analyzing the top contracts contributing to eth burning. Major contributors to this activity include major dApps and services, notably Uniswap in its various iterations, Tether, and OpenSea. Uniswap's prominent position suggests high transaction volume within the DeFi sector, with $543.8 million burned across four contracts in the top 10.
The presence of Tether indicates substantial stablecoin transactions on the ethereum network, while the inclusion of OpenSea highlights the enduring nature of nft transactions even in the bear market. This diversity, spanning DeFi platforms, stablecoins, nft marketplaces, and Layer 2 solutions like Arbitrum, shows the multifaceted utilization of ethereum.
| eth burned | Entity | Value (USD) |
|---|---|---|
| 84,006.46 | Uniswap Universal Router | $186,158,315.36 |
| 75,926.77 | Uniswap V2 | $168,253,722.32 |
| 74,739.31 | eth transfers | $165,622,310.96 |
| 58,030.71 | Uniswap 2 Universal Router | $128,596,053.36 |
| 53,626.72 | Tie | $118,836,811.52 |
| 27,441.92 | Uniswap V3 | $60,811,294.72 |
| 26,935.76 | New contracts | $59,689,644.16 |
| 23,405.50 | Open sea | $51,866,588.00 |
| 22,891.92 | Decision | $50,728,494.72 |
| 22,201.66 | MetaMask | $49,198,878.56 |
Source: ultrasound.money
The top 10 contracts total $1,039,762,113.68 worth of eth burned, just under half of the total burned since the merger.
ethereum's transition to a deflationary model may continue to attract investors looking for a store of value, especially compared to inflationary fiat currencies. Increased activity on decentralized exchanges and DeFi applications indicates a strong trend towards decentralized finance.
Interestingly, under its current proof-of-stake (PoS) model, the ethereum network has burned an average of 1.83 eth/min since the merger. However, since the burn mechanic was implemented as part of the EIP-1559 update in August 2021, the average burn rate is almost double, at 3.09 eth/min. However, due to the drastic reduction in supply issuance since proof-of-work mining was removed, the total supply has steadily decreased.
If ethereum had retained its PoW mode, the supply would have reached a mammoth 124,941,176 eth, about 4.7 million eth more than the current level. In theory, at the current price of $2,228, this would have given ethereum a market capitalization of $12 billion more than the current $266 billion. Importantly, due to increased supply, this is purely academic due to the nature of supply/demand market dynamics.
Looking ahead, these dynamics may influence ethereum's trajectory in several ways. Continued deflationary trends could lead to increased demand and potentially higher prices for eth, assuming consistent or increasing demand emerges from the bear market. However, it is essential to consider that market volatility and external factors such as regulatory changes or macroeconomic trends can significantly affect these dynamics, especially with the SEC's continued activity in the US to categorize PoS tokens as securities. .
In summary, ethereum's post-merger statistics point to a notable move toward a deflationary framework, underlined by high network usage, particularly in the DeFi and nft sectors, and the potential for higher value due to declining offer. However, these trends warrant continued analysis and understanding of macroeconomic factors to fully understand their long-term impact and sustainability.
