With the last upgrade called EIP1559 (London HF), one of the things that the Ethereum changed is the way fees are paid. Before all the fees that users pay were just going to miners. After the EIP1559, there is a so-called base fee that miners get, but everything above that is being burned.
Let’s take a look at the data in the first months.
Here we will be looking at:
- Overall Ethereum Supply
- Ethereum Created Per Day
- Ethereum Created Per Day After The London HF
- Ethereum Burned Per Day After The London HF
- Share Of The ETH Burned From The Total Inflation
For the supply we will be looking for the overall existence of the Ethereum network and then we will take a closer look in the last week, after the EIP, August 5, 2021 till August 12, 2021.
Overall Ethereum Supply
The supply is always an interesting topic in crypto. At the moment of writing this, the Ethereum has a total supply of 117.6M coins.
Ethereum had a presale in 2014, where 60M ETH ware sold to investors and 12M ETH was allocated to a development fund. A total of 72M starting supply. Since then, an additional 47M ETH were mined and added to the supply. The initial supply still represents more than 60% of the current supply. This is one of the reasons Ethereum gets a lot of critics.
Here is the chart for the ETH supply over time.
source
As mentioned more than 47M ETH in total were mined since its inception. We can see that the supply is slowly increasing. In the last year an approximate 5M ETH more was added to the supply. This year we are around 3.6M till now.
With 5M ETH created last year, the ETH inflation was around 4.4% in 2020, if we take the base supply of 114M ETH on Jan 1, 2021.
Ethereum Created Per Day
The chart for the daily inflation looks like this.
We can see that at first the inflation was higher with more than 30k ETH generated per day. It has dropped since then and at this moment around 13.5k ETH daily is added to the supply. This is before the London HF and the start of the burnings that we will look at next.
Ethereum Created And Burned Per Day After The London HF
For the ETH created and burned daily I have used Dune Analytics. It’s a database tool for the Ethereum blockchain.
First the amount of ETH created per day.
I have represented data starting from July 1st, for context. We can see the drop in the daily inflation after the implementation of the London HF.
Next the important thing.
Ethereum Burned Per Day After The London HF
Here are the numbers for the Ethereum burned per day.
As mentioned, I’m using Dune Analytics for the numbers. I have forked a query that was showing the numbers for ETH burned per hour and adjusted it for daily burns link.
From the chart we can see there have been two spikes with more than 13k ETH burned per day. This means on few days there was more ETH burned then created. The daily average for ETH burns in the last two months has been 7.4k.
At these prices that is around 25M USD burned per day.
Share Of The ETH Burned From The Total Inflation
When we plot the burned vs created ETH per day, we get this.
The burns have reduced the effective ETH inflation in the range of 8k to 9k ETH per day, down from the 13.5k.
If we plot all the ETH burned vs created for the period we get this pie 😊.
More than half of the new inflation has been burned in the period!
A total of 55% of the new inflation burned in the last two months.
Overall, the ETH London upgrade has contributed to burning ETH with more than 50% of the new inflation now being burned.
I’m not sure how will the fees’ structure works when ETH transition to ETH 2.0 and proof of stake. This phase with burning ETH probably will change.
For now, the ETH inflation has been reduced in the range of 2% to 3%, almost matching the BTC inflation.
All the best
@dalz