For the first time in its history, Ethereum has issued negative supply for a week in a row.

After marking the first week of deflationary issuance, Ethereum is making great progress toward becoming totally deflationary. While this may not be a continuing pattern, it does provide a little look into the network's future plans.

  • After seven days of negative supply, Ethereum has taken the first tentative steps toward becoming totally deflationary.
  • The latest tendency was aided by the burn feature included with the London update.
  • The network's move to Ethereum 2.0 is planned to completely add deflationary characteristics to the network.

Seven days in a row

Ethereum records 7 days of deflationary issuance in a row, despite strong price performance and rising demand. This signifies that more Ethereum has been destroyed in the time span than has been produced through mining.

The London hard fork created the groundwork for deflation by introducing a burning mechanism. Over $3 billion worth of Ethereum has been destroyed since its introduction, according to statistics from Ultrasound Money, and 15,000 ETH being burned everyday, which is worth roughly $60 million at current pricing. According to data from WatchTheBurn, the discrepancy between burn rate and net issuance at press time was minus 8,000 ETH.

Gas costs might possibly be a factor in the asset's recent upward trajectory. Gas prices have risen dramatically in recent weeks, with average transaction costs on the network above $50.

"A deflationary ETH was not predicted until The Merge due to the current PoW issuance (4.5 percent)," Anthony Sassano, co-founder of EthHub, writes on The Daily Gwei. Although the shift to ETH 2.0 is scheduled for 2022, this is a unique view into the asset's future.

Ethereum's stellar performance from October continues, with the cryptocurrency rising to a new all-time high of $4,638. The second-largest cryptocurrency has a market capitalization of $536 billion, with a 24-hour transaction volume of $18 billion, up 23.08 percent.

The Long Run

When Ethereum 2.0 is released, it will bring more than simply deflationary pressure with it. According to the analytics firm Ultrasound, when the shift is complete, Ethereum's supply may be lowered by 2% every year.

Unlike Bitcoin, which has a supply ceiling of 21,000,000, Ethereum currently has no supply cap and its circulating supply is 118,187,792 ETH. Things are already in high gear in preparation for Ethereum 2.0. The Altair update was successfully deployed, but before that, the dev team's convergence in Greece raised hopes for a smooth transfer.

Ethereum 2.0 will also see a move from Proof-of-Work to Proof-of-Stake, which will drastically cut the network's energy usage. As part of the plethora of features coming to the network, it is commonly predicted that gas prices will be greatly lowered.


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