The Ethereum blockchain recorded its first 30 days of negative supply growth following its Merge to Proof-of-Stake.

According to data from the dashboard, the ETH burn rate has been greater than its issuance rate over the last month. While the issuance rate stands at 1,200,000 ETH per year, the burn rate is around 610,000 ETH per year.

The total supply has risen by 3,163 ETH since the Merge took place, earning the blockchain deflationary status for the first time in history. If the Proof-of-Work consensus was still in place, the supply of ETH would have risen by 427,568 ETH over the same period. 

The amount of new ETH issued is taking place at a third of the rate that new Bitcoin is created. Aside from the Merge, an equally important factor influencing the change in ETH’s supply schedule, is the burn mechanism that was introduced with EIP-1559 in August 2021. 

This network upgrade brought about the burning of the base fee in every transaction on the Ethereum blockchain. The base fee is contingent on the level of network congestion and must remain above 15 gwei in order for ETH to be deflationary. At the time of writing, the average base fee was well above this threshold at 74 gwei.

The largest ETH burners were Uniswap, OpenSea and XEN Crypto that have each accounted for more than 3000 ETH burned in the last month alone.

Projections from estimate that ETH will hit its peak supply on Oct. 27, after which it will see a gradual reduction. However, a significant reduction in total supply may still be a long way off, if current market conditions continue to prevail. A long-term projection graph shows that ETH’s supply will only fall below 100 million in the year 2037.