Ethereum’s Transition to Proof-of-Stake Yields Deflationary Results

According to statistics 158 days after the merger, after switching from Proof-of-Work (PoW) to Proof-of-Stake (PoS), Ethereum’s annual emission rate dropped to minus 0.057%. The metrics show that more Ethereum tokens have been removed than issued, and if the chain were still under PoW consensus, 1,823,678 Ether would have been minted to date.

Negative Ethereum annual supply and unlocked Ethereum in March could tip the balance

Statistics from the analytics website show that the Ethereum network is in a state of deflation these days. According to the metrics after the implementation of EIP-1559 during the London hard fork, more than 1.023 million ethers are removed from circulation annually. Since the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), known as The Merge, the current annual issuance rate is minus 0.057% or -29,797 Ether.

Ethereum transition to Proof-of-Stake yielded deflationary results
Data from the analytics website shows that Ethereum issuance rate is currently -0.057% per annum as of February 20, 2023.

The data show that more ethereum (ETH) currently withdrawn from circulation than issued. If Ethereum were still using PoW, the issuance rate would increase by about 3.49% per year. As of 10:30 AM ET on February 20, 2023, the data shows that 1,823,678 Ethereum tokens would have been added to the supply of coins in circulation in accordance with the PoW consensus. As of 10:55 AM ET on the same day, approximately 120,491,331 ethereum (ETH) tokens are in circulation.

In the same time, 16,763,815 ether locked in the Beacon network contract, and when the Shanghai Refresh happens in March, many of these coins could be released from their locked state. The blocked Ethereum represents $28.61 billion of the second largest cryptocurrency’s market value of $205.77 billion, or 13.91% of the circulating supply and market value. According to ultrasound statistics. money, the current annual Ethereum issuance reward is 4.1%, and the burn rate for non-stakers is 1.8% per year.

What do you think the future holds for Ethereum’s issuance rate and circulating supply as the network continues to move to Proof-of-Stake and implement upgrades such as the upcoming Shanghai update? Share your thoughts in the comments section below.

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