Annual ETH issuance has dropped by 82% since the network switched to PoS

The number of validators increased by 58% after the Shapella upgrade

25.12.2023 - 11:19

3 min

What’s new? Since the Ethereum blockchain switched from the Proof of Work (PoW) consensus algorithm to Proof of Stake (PoS) as a result of The Merge upgrade on September 15 last year, the annual issuance of native coins ETH has dropped by 82%. More than 1,2 million ETH collected as transaction fees were burned during that period, that’s about 95% of total fees or about $2,7 billion at current prices, P2P org analysts said in a new report.

P2P’s report

What else is known? ETH supply has declined by 0,215% since The Merge, making it a deflationary asset with real returns, analysts said. In addition, since the Shapella hard fork on April 13 this year, which allowed ETH to be unstaked, the number of active validators has increased by 58% and users have blocked new coins with a total value of $23 billion. The annualized staking rate was at 4,1% during the last quarter.

These changes could indicate market confidence in the future of the protocol, as well as increased demand for staking as an investment tool, according to P2P org. Although demand for ETH staking has recently decreased significantly, the number of validators on the network is expected to remain above the 1 million mark by the end of this year and reach 1,4 million next year at current demand levels.

In October, the ETH staking blockchain queue dried up for the first time since May. According to ValidatorQueue, it is also empty as of December 25.

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Earlier, the former head of the BitMEX exchange Arthur Hayes predicted the growth of the ETH rate to $5000, while trader Peter Brandt, on the contrary, allowed the possibility of the asset to fall to $650.

At the time of writing, ETH is trading on Binance at $2275, having lost 0,5% over the day. Weekly growth amounted to 5,4%, and the asset has added 90,4% since the beginning of the year.

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