Ethereum Activity Decline Hits Ether Supply Low Since Aug 2022

Ethereum’s latest upgrade, Dencun, was initiated on March 13, coinciding with a significant reduction in the total supply of ether. Data from CryptoQuant, as reported by CNBC, reveals that the total ether supply has dropped to its lowest level since August 2022. This decline follows Ethereum’s historic upgrade, The Merge, which transitioned the network from proof-of-work to proof-of-stake.

The rate of decline in ether supply is currently the fastest since May 2023, with a decrease of 0.872% per year over the past 30 days, according to ultrasound.money. Since The Merge, this decline rate has been 0.246%. Julio Moreno, CryptoQuant’s head of research, attributes this phenomenon to high network activity, causing increased transaction fees and subsequent burning of fees.

In terms of numbers, over 1.56 million ether have been burned since The Merge, surpassing the issuance of 1.12 million ether. This results in a net decrease of over 446,000 ether, valued at nearly $1.62 billion at current prices.

Despite Solana’s rising network activity, Ethereum continues to demonstrate notable performance. The seven-day moving average of transactions on the Ethereum network is approaching its 12-month high, with 1.26 million transactions recorded yesterday. Moreno highlights that high transaction activity leads to fee spikes, increased fee burning, and a decrease in total supply.

Additionally, Ethereum‘s network metrics show positive trends, with active addresses reaching year-to-date and 12-month highs of around 540,000.

The number of new addresses is also at year-to-date and 12-month highs, with over 120,000 new Ethereum addresses created yesterday. On-chain volume for Ethereum has surged to new year-to-date and 12-month highs, exceeding $7 billion in volume recorded yesterday.

Image Credit: Shutterstock