The Ethereum network has seen a reduction of 417,413 ETH in supply since transitioning to a Proof-of-Stake (PoS) consensus mechanism in September 2022, per data from ultrasound.money. In the 540 days since The Merge, 1,509,991 ETH has been burned while the network has issued 1,092,578 new ETH, resulting in a net decrease.
As of press time, the market value of the ETH removed from the supply stands at $1,653,797,635, marking an annual inflation rate of -0.23%.
In contrast, Bitcoin’s supply has grown by 1.716% over the same period. This highlights the divergent monetary policies of the two largest cryptocurrencies, as Bitcoin maintains a predictable issuance schedule. At the same time, the balance between staking rewards and transaction fee burning now determines Ethereum’s supply change.
A Proof-of-Work (PoW) simulation on the ultrasound.money dashboard shows Ethereum’s supply would have increased by over 5.5 million ETH during the same period had the network not shifted to PoS. Under the PoW model, the simulation indicates 7,031,556 ETH would have been issued with the same 1.5 million ETH burn rate, leading to a net increase of 5,521,564 ETH since The Merge. The value of the ETH issued under this simulation would amount to $21,865,393,440, representing a theoretical inflation rate of 3.26%.
The stark difference highlights the deflationary impact of Ethereum’s new consensus design compared to its previous mining-based system. The transition to PoS has significantly reduced new ETH issuance, as validators staking ETH now secure the network instead of PoW miners. This shift, combined with the ongoing burn mechanism introduced in EIP-1559, has put downward pressure on Ethereum’s supply growth.
According to the real-time data, Ethereum’s total circulating supply currently stands at 120,103,624 ETH. Meanwhile, the PoW simulation…
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