Key Points
- The Ethereum network’s demand surge has led to an increase in burn rate and a drop in circulating supply.
- Despite a decrease in NFT sales transactions, Ethereum’s NFT sales volume has grown in the last month.
The Ethereum network has seen a rise in its burn rate due to increased demand, resulting in a decrease in the coin’s circulating supply.
Data from Ultrasound.money shows that the circulating supply of Ethereum (ETH) has reached a new low since the merge. Over the past month, 86,219 ETH, worth approximately $300 million, has been removed from circulation.
Proof-of-Stake Network Demand and Use
The reduction in Ethereum’s circulating supply indicates an increase in demand and use of the Proof-of-Stake (PoS) network, leading to a higher burn rate.
The Ethereum network recently saw over 116,000 new addresses created daily, marking a year-to-date high and indicating a surge in user activity on the Layer 1 (L1) network.
Following the network’s transition from Proof-of-Work (PoW), known as “The Merge”, the circulating supply of ETH is now at its lowest in 548 days, totaling 120.07 million ETH.
Decentralized Finance Ecosystem and Trading Volume
An analysis of Ethereum’s decentralized finance (DeFi) ecosystem shows a rise in total value locked (TVL) over the past month. According to DefiLlama, Ethereum’s TVL is currently at $51 billion, a 21% increase over the past 30 days.
The leading protocol on the chain, Lido Finance, saw its TVL grow by 27% during the same period.
Ethereum’s decentralized exchange (DEX) trade volumes have also spiked amid the recent altcoin market rally. Data from Artemis shows a 161% increase in daily trading volume across DEXes within Ethereum over the past month.
Despite a 57% decrease in the number of NFT sales transactions, the network’s non-fungible token (NFT) sector has seen growth over the past month. Data from CryptoSlam shows that NFT sales volume reached $617 million, a 17% increase.
With the crypto fear & greed index indicating a marked increase in greedy sentiment, there has been a surge in ETH sell-offs. As a result, ETH’s supply on exchanges has spiked. According to CryptoQuant, ETH’s exchange reserve was at 14.1 million, its highest level in the last month.
An increase in an asset’s exchange reserve like this typically suggests a rise in selling pressure.
