- ETH’s supply outpaced tokens burned in the last 30 days.
- Transaction by new addresses on the blockchain decreased, while active addresses increased.
Ethereum’s [ETH] supply has increased over the last 30 days despite the blockchain’s transition to Proof-of-Stake (PoS). This led to speculation that ETH could become deflationary again.
How much are 1,10,100 ETHs worth today?
ETH will be back
According to Benjamin Cowen, ETH may soon return to its deflationary status. He, however, opined that it could take a “more accommodative monetary policy” to achieve the same.
Since the merge, there has still been more $ETH burned than issued. pic.twitter.com/g2hNbW7I4X
— Benjamin Cowen (@intocryptoverse) September 26, 2023
This was also one of the objectives behind the 15 September 2022 Merge and the burning mechanism of the EIP-1559.
When ETH is considered deflationary, it means that there has been an overall decrease in the ETH token supply. This is usually a result of tokens being burned or completely removed from circulation.
But when ETH is inflationary, it implies an increase in supply, which seems to be the current state.
Previously, miners on the Ethereum blockchain ran the execution layer. Also, validators were in charge of the consensus layer. However, the Merge allowed for both layers to unify. This then allowed for the tax on each transaction to be automatically removed from circulation.
Nonetheless, Cowen also revealed that the hike in circulation did not help the number of ETH issued to outweigh those burned since the Merge.
Over the last 30 days, the supply of $ETH has gone up.
As the tourists leave and demand drops, not as much ETH is burned.
I suspect ETH will return to being deflationary again, but it might take more accommodative monetary policy for that to happen. pic.twitter.com/DX8zxIvfFR
— Benjamin Cowen (@intocryptoverse) September 26, 2023
From Glassnode’s data, Ethereum’s burn rate, also known as the base fee, has decreased incredibly. At press time, it was 852.95. The metric represents the pace at which ETH is being burned.
By tracking the base fee, users can gain insight into the deflationary or inflationary pressure on Ethereum, and the effect on the network’s long-term economics. Therefore, the decrease in the base fee confirms the notion that more ETH had been issued than they had been burned lately.
Source: Glassnode
Newbies hide, but others show up
In another terrain, Santiment showed that ETH’s network growth had tanked. Network growth shows the number of new addresses that transferred a coin or token for the first time. When this metric increases, it means that the project has gained a lot of traction.
On the other hand, a decrease suggests a decline in adoption. At 36,100, ETH’s decrease in network growth means that new addresses have refrained from making transactions on the Ethereum network.
Realistic or not, here’s ETH’s market cap in BTC’s terms
However, active addresses on the Ethereum blockchain increased in the last 24 hours. At the time of writing, the metric had increased to 413,000. The metric indicates the level of crowd interaction with a token.
Therefore, the increase means that the number of unique addresses speculation around ETH and transferring the asset climbed.
Source: Santiment