Ethereum’s Merge not only changed the network’s consensus mechanism from an energy-intensive proof-of-work system to a more environmentally friendly proof-of-stake one, but it also had an impact on supply.
The reason for this is quite simple- the Ethereum blockchain has to release a lot less ETH to compensate stakers than it did to reward miners.
The supply of ether has decreased by almost 100k, according to data from the Eth tracking website ultrasound.money. The total supply of ether has dropped during the last 200 days by 103,092 coins, or more than $200 million at the current price.
Furthermore, ultrasound.money stats showed that throughout the same time period, $1.2 billion was taken out of the ether supply.
At the time of this post, the supply of ether stood at 120,416,154 million coins.
One of the factors providing deflationary pressure to the ETH supply is the “Ethereum triple halving”
The phrase was created in reference to the Bitcoin halving, a feature of the Bitcoin protocol that reduces the supply of new BTC coins by half about every four years.
The triple halving of Ethereum, in contrast to the halving of Bitcoin, is not a real occurrence that is part of the Ethereum protocol.
Instead, it’s a word that the Eth community used to explain how new processes added to the protocol are helping reduce the supply of ETH.
The concept of the Ethereum triple halving consists of three main parts:
- Reduced ETH issuance under Proof-of-Stake consensus.
- ETH burning via the EIP-1559 upgrade.
- Ethereum staking lowers the amount of ETH that is effectively in circulation.
Out of the two, the third component of Ethereum’s triple halving has recently lost some of its significance. This is due to the Shapella upgrade’s addition of the option to withdraw staked ETH currencies, which went live on April 12, 2023.
Ethereum Roadmap Post Shapella
Following the launch of the Shapella hard fork on April 12, the ETH roadmap has a number of other significant changes planned.
The first in line is the EIP-4844 Cancun hard fork, which will open the door for “proto-dank sharding,” a technique rollups can use to add less expensive data to blocks.
Next is Distributed Validator Technology [DVT] which aims to enhance the operation of the ETH validator.
The Proposer-Builder Separation [PBS], which aims to maintain the decentralization in how blocks are built, is the last milestone on the ETH roadmap.