Tony Kim
09 Aug 2024 15:24
Ethereum (ETH) will transition to inflation in Q2 2024, adding 75,301 ETH to the network, marking a significant reversal from the deflationary trend that has persisted since late 2022.
According to CoinGecko, Ethereum (ETH) has undergone a significant change in its economic model, switching to inflation in Q2 2024. This is the first time since late 2022 that Ethereum has added more coins to its supply than it has burned.
Burn statistics and emissions
As of August 5, 2024, the Ethereum network has burned a total of 465,657 ETH since the beginning of the year. However, ETH emissions have outpaced this burn, with 540,958 ETH added to the network, for a net addition of 75,301 ETH in 2024.
The implementation of EIP-1559 in June 2021 introduced a mechanism to burn a portion of transaction fees, reducing the total supply of ETH. A total of 4.36 million ETH have been burned since its introduction. However, the trend has recently reversed, and Ethereum has become inflationary again.
Quarterly Analysis
In Q1 2024, Ethereum remained in a deflationary state, with 220,454 ETH being released and 333,555 ETH being burned, resulting in a net loss of 113,100 ETH. However, this changed in Q2, with 228,543 ETH being released and 107,725 ETH being burned, resulting in 120,818 ETH being added to the blockchain.
July 2024 recorded the lowest monthly burn of the year, with only 17,114 ETH burned, a 35% decrease from June. On the other hand, March 2024 recorded the highest monthly burn of the year, with 147,620 ETH, but this is significantly lower than the all-time high of 398,061 ETH set in January 2022, the peak of the last bull market.
Best ETH Burner
Uniswap remains the largest ETH burner, burning a total of 71,915 ETH in 2024. However, the burn rate decreased by 72.4% quarter-on-quarter, from 54,413 ETH in Q1 to 15,031 ETH in Q2. ETH transfers are the second largest contributor, burning 33,538 ETH YTD, a steep 73.4% decrease from Q1 to Q2.
Tether (USDT) was the third largest burner in 2024, burning 23,332 ETH, with a 70.9% decrease in burn rate from Q1 to Q2. The fourth largest contributor was the Telegram trading bot Banana Gun, with 11,060 ETH burned, a 74.3% decrease from Q1 to Q2.
The top 10 ETH burners from January 1, 2024 to August 5, 2024 are:
| class | Protocol/Method | ETH is burned |
|---|---|---|
| 1 | Uniswap | 71,915.2 |
| 2 | ETH transfer | 33,538.0 |
| 3 | tether | 23,332.4 |
| 4 | Banana gun | 11,060.3 |
| 5 | virtuoso | 9,554.2 |
| 6 | Metamask | 9,160.2 |
| 7 | one | 6,783.4 |
| 8 | 1 inch | 6,484.1 |
| 9 | scroll | 6,307.9 |
| 10 | MEV bot | 4,585.4 |
methodology
This study analyzed Ethereum emissions and burns covering the period from January 1, 2024 to August 5, 2024 using data from Dune Analytics and Etherscan. The top 10 methods that burned the most ETH were Uniswap, ETH Transfers, Tether, Maestro, 1inch, MetaMask, Circle USD, MEV Bots, and Scroll.
Visit CoinGecko for the full report.
Image source: Shutterstock