The trend for Ethereum supply is to go below pre-Merge levels

On-chain data indicates that the quantity of Ethereum’s native asset ether (ETH) looks to be trending toward pre-Merge levels, as more coins have been burnt than generated during the last several weeks.

At the moment of The Merge on September 15, when Ethereum upgraded from proof-of-work to proof-of-stake consensus, there were 120,520,000 ETH in circulation. After The Merge, the supply increased to 120,534,000 on October 8; however, it has subsequently decreased to 120,522,000 and is presently just a few thousand coins over the quantity reported at The Merge.

In recent weeks, more coins have been destroyed for transaction fees that have been generated as incentives for validators, resulting in this deflationary trend.

As a result of the removal of miner subsidies in the previous proof-of-work blockchain, The Merge has resulted in a 90% decrease in new token supply issuance. Combined with the EIP-1559 feature on Ethereum, in which a part of transaction costs, or gas fees, are “burned,” it is projected that more ether is destroyed than added to the supply anytime transaction fees exceed 16 gwei, which is the current trend.

In reality, according to statistics from, the supply is just 1,700 ETH away from reaching pre-Merge levels and is steadily declining.

In the next few days, if this pattern continues and fee burns stay bigger than new issuance, supply growth might fall below the level prior to The Merge, according to DeFi analyst Mika Honkasalo. “The post-merge total supply shift is set to become negative during the next five to seven days,” tweeted Honkasalo.

While typical transaction fees remained low for some time following The Merge, they have surged after October 8 with a surge in Ethereum activity. The increasing activity is due to the launch of XEN, a freely claimable token. This cryptocurrency is available to everyone who pays the Ethereum transaction fees, and it has essentially infected the blockchain for the last several weeks.

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