ETH Supply Trends Down After Two Months Of Inflation

The supply of Ether is again flipping deflationary after users a sharp uptick in demand for Ethereum blockspace.

Data from Ultra Sound Money shows that Ethereum’s burn-rate offset the issuance of new coins by 1,960 ETH ($3.7M) over the past seven days. Uniswap traders led the charge by driving 13.3% of burned ETH, followed by simple token transfers with 6%, and the Tether stablecoin protocol with 5%.

Banana Gun, a Telegram trading bot, also made up a significant share of on-chain activity, pushing 3.5% of burned ETH.

The recent increase in burn-rate comes after Ethereum’s supply turned inflationary for the first time in 2023 during September and October. Ether’s supply grew by 54,000 coins between the start of September and November as on-chain activity receded.

For comparison, the network last quoted users 40 gwei in gas fees for transaction execution, up more than 300% since dropping below 10 gwei in September.

Ethereum’s burn mechanism has removed more than 260,000 ETH from circulation this year so far.