Is Ethereum Still Ultrasound Money? New Data Says Otherwise
As of April 14, 2025, Ethereum has burned a total of 4.5 million ETH since the EIP-1559 upgrade in August 2021, with the intention to reduce supply growth and promote deflation.
However, the total supply rose to 120.69 million ETH, up 0.62 million ETH from April 2024. This is equal to a net annual growth rate of 0.51% over the past year, with an average of 0.805% since the London Hard Fork.
Ethereum supply chart (Source: ycharts)
Far from the “ultrasound money” narrative, the Ethereum supply continues to grow, with transaction fee burns falling short of offsetting new ETH generated, reducing the hopes of scarcity.
Staking Rewards Sustain Ethereum Supply Increase Despite Burn
Ethereum’s proof-of-stake system, introduced in September 2022, drives inflation through validator rewards.
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Up to 31.2 million ETH—26% of the total supply—is staked by over 1 million validators, yielding 2–4% annual returns, or 0.624 million to 1.248 million ETH, according to BuiltIn data.
In 2025, issuance is estimated at 1.02 million ETH, while burns total around 0.4 million ETH, down from 465,657 ETH in 2024.
Meanwhile, large staking activity secures the network but ensures new ETH surpasses burns, maintaining net supply increases at 0.62 million ETH over the past year.
Why is the EIP-7514 Upgrade Yet to Curb Supply Rise?
Higher transaction volumes are required to drive fee burns up, but 2025 data shows a declining activity, partly due to Layer 2 solutions like Optimism and Arbitrum redirecting fees from Ethereum’s base layer following the Dencun upgrade.
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While Layer 2 transaction volumes are growing, with estimates pointing to millions of weekly transactions. Proposals such as EIP-7514 are still under consideration, with the aim to limit staking growth, but no changes have been made yet.
An analyst projects increased burns by late 2025 if DeFi and Layer 2 activity surge, yet the current trend—0.62 million ETH added in a year—shows inflation continues, suppressing deflation hopes for the near future.
