Nearly three years after Ethereum’s “London” hard fork introduced the EIP-1559 fee-burning mechanism, the network has yet to achieve sustained deflation. As of April 13, 2025, Ethereum’s total supply has grown by 0.805% annually since August 2021, with a net addition of 3,477,830 ETH into circulation.
During this period, the Ethereum protocol successfully burned over 4.58 million ETH in transaction fees, thanks to EIP-1559. However, this burn rate has not been sufficient to offset the issuance of new coins under Ethereum’s proof-of-stake model.
Interestingly, Bitcoin—despite having a hard supply cap—has shown an even higher average annual inflation of 1.517% over the same time span. But Bitcoin’s limited supply model continues to contrast sharply with Ethereum’s flexible monetary framework, which has no maximum cap.
The deflationary hopes tied to EIP-1559 were further diminished following the implementation of the Dencun upgrade in 2024. While the total supply of Ethereum currently sits at 120.69 million ETH, the annual net issuance has slowed to 0.51%. Still, this trend contradicts expectations of long-term deflationary dynamics and casts doubt on Ethereum’s “ultrasound money” narrative—at least for now.
Proponents of Ethereum remain optimistic that future network upgrades or demand surges could eventually flip ETH into a deflationary asset. However, current on-chain data highlights the ongoing struggle to balance issuance, burn rates, and network efficiency.
For now, Ethereum’s path to becoming a truly deflationary asset is still a work in progress.
