Ethereum burns $2.5B worth of ETH since merge as supply drops to 18 month low Ethereum burns $2.5B worth of ETH since merge as supply drops to 18 month low
Uniswap, ETH transfers, and Tether lead Ethereum's $690M ETH burn supply decline
3 min read
Updated: Dec. 12, 2023 at 1:45 pm UTC
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Analysis of Ethereum’s recent financial data on Ultrasound Money reveals a continued shift in its economic model since the historic merge in Sept. 2022.
The decline in Ethereum’s supply stands at 309,663 ETH, equivalent to approximately $686.2 million. This reduction reflects a deflationary trend, contrasting the previous inflationary nature where new ETH was consistently created. The cause of this shift can be traced 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 enhance ETH’s scarcity and value over time. Further, despite the issuance of 885,581 ETH, worth about $1.96 billion, Ethereum’s total supply experienced a net decrease, illustrating that the rate of ETH burning continues to surpass the rate of new issuance.
Presently, the total supply of Ethereum stands at the lowest point since the merge at 120,211,380 ETH, translating to a market capitalization of approximately $266.39 billion, reinforcing its significant standing in the crypto market.
A look at the ETH burning leaderboard presents further insights by analyzing the leading contracts contributing to the burning of ETH. The top contributors to this activity include major dApps and services, notably Uniswap in its various iterations, Tether, and OpenSea. Uniswap’s prominent position suggests a 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 Ethereum’s network, while OpenSea’s inclusion highlights the enduring nature of NFT transactions even through the bear market. This diversity, encompassing DeFi platforms, stablecoins, NFT marketplaces, and Layer 2 solutions like Arbitrum, showcases the multifaceted utilization of Ethereum.
| Burned ETH | 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 Universal Router 2 | $128,596,053.36 |
| 53,626.72 | Tether | $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 | OpenSea | $51,866,588.00 |
| 22,891.92 | Arbitrum | $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 burn since the merge.
Ethereum’s transition to a deflationary model may continue to attract investors seeking a store of value, especially when contrasted with inflationary fiat currencies. The heightened activity in decentralized exchanges and DeFi applications indicates a robust trend toward 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 merge. However, since the burn mechanic was implemented as part of the EIP-1559 upgrade in Aug. 2021, the average burn rate is almost double, 3.09 ETH/min. Yet, due to the drastic reduction in supply issuance since proof-of-work mining was removed, the total supply has steadily declined.
If Ethereum had retained its PoW mode, the supply would have reached a mammoth 124,941,176 ETH, some 4.7 million ETH more than the current level. Theoretically, at the current price of $2,228, this would have given Ethereum a market cap of $12 billion higher than current $266 billion. Importantly, due to the increased supply, this is merely academic due to the nature of supply/demand market dynamics.
Looking ahead, these dynamics may influence Ethereum’s trajectory in various ways. Continued deflationary tendencies could lead to increased demand and potentially higher ETH prices, assuming steady or rising demand coming out of the bear market. However, it’s essential to consider that market volatility and external factors like regulatory changes or macroeconomic trends can significantly impact these dynamics, especially with continued activity from the SEC in the U.S. toward categorizing PoS tokens as securities.
In summary, Ethereum’s post-merge statistics signal a notable move towards a deflationary framework, underscored by high network usage, particularly in the DeFi and NFT sectors, and the potential for heightened value due to diminishing supply. However, these trends warrant continued analysis and understanding of macroeconomic factors to comprehend their long-term impact and sustainability fully.
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Author 
Liam 'Akiba' Wright
Also known as "Akiba," Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
Editor Editor 
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In this article
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
OpenSea
OpenSea is a decentralized peer-to-peer marketplace for buying, selling, and trading NFTs.
Blur
Blur is an NFT marketplace and aggregator that was launched on October 19, 2022.
Uniswap Labs
Uniswap Labs is a corporation that builds products on top of the Uniswap protocol to make it simple and easy to use. Its headquarters is in New York, New York, and it was created in 2018.
Tether Limited
Tether Limited is the company that introduced Tether (USD₮ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
MetaMask is an extension for accessing Ethereum enabled distributed applications or “dApps” in your normal browser.