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Ether supply hits historic low after the merge

As Ethereum prepares for the Shanghai hard fork, ETH supply is at a historic low.

By Luc Vesters
• 2 min read
Ether supply hits historic low after the merge

As Ethereum prepares for the Shanghai hard fork, ETH supply stands at a historic low.

The total circulating supply of Ethereum has dipped to a floor of about 120.5 million ether, according to data from ultrasound.money. The transition to Proof-of-Stake (PoS) on Ethereum is driving a substantial reduction in supply. Before the merge, the network paid out thousands of ETH daily to miners as block rewards for processing transactions and securing the network.

The amount of ether paid out to validators under PoS is significantly lower. As transaction density increases, the average ether burn grows and the supply tightens. Gas fees, or the transaction costs on the Ethereum blockchain, have risen steadily since early 2023. They were roughly at Q3 2021 levels, when the ETH price was at a high.

Meanwhile, the Ethereum network is preparing for the Shanghai hard fork. An initial testnet has already been launched. Some developers have voiced concerns that the update could be delayed. Shanghai is designed to let users withdraw their still-locked staking rewards. About 16.4 million ethers are currently staked on the Beacon Chain.

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