Ethereum’s Supply Jumps to 2-Year High

Ethereum’s overall supply has recently surged to its highest point since the major Merge update in September 2022.

This increase, observed by Ultrasound.money, shows that the circulating supply of Ethereum now stands at 120,521,523 ETH—slightly surpassing the previous post-Merge levels by about 383 ETH.

This marks a reversal from Ethereum’s deflationary trajectory following its shift to the proof-of-stake (PoS) consensus.

The primary factor behind this supply growth is the Dencun upgrade, launched in March 2024, which introduced changes to Ethereum’s fee-burn mechanism. According to Justin Bram, CEO of Astaria, the upgrade has generated significant attention and debate within the crypto space.

The Dencun update introduced support for blob transactions, specifically designed to process large data loads for Layer 2 (L2) solutions. These transactions now use a new fee structure, “blob gas,” which is separate from the typical gas fees.

Before Dencun, a large portion of transaction fees on Ethereum was burned, contributing to a reduction in its overall supply. However, with the shift to blob gas, much of the transaction activity moved to blob transactions, which has led to fewer fees being burned. This alteration has reduced the deflationary effect that Ethereum once experienced, resulting in a mild inflationary pressure despite consistent network activity.