Ethereum Can Shrink Its Own Supply. Here's How Issuance and Fee Burning Decide Whether ETH Is Inflationary
5 min read
Loading...
5 min read
Bitcoin has a hard cap of 21 million coins. Ethereum has no cap. So can Ethereum's supply go down? Yes. And sometimes it does.
Whether ETH is inflationary (the supply grows) or deflationary (the supply shrinks) comes down to two daily numbers: how much new ETH is created, and how much is destroyed. This post explains both in plain words and shows how the answer can flip.
Think of a bathtub. A tap adds water. A drain removes it. The water level is the supply of ETH.
Before September 2022, miners ran Ethereum and were paid in new ETH. Then came an upgrade called the Merge, which switched the network to staking.
According to ethereum.org, miners were issued about 13,000 ETH a day before the Merge. Stakers get about 1,700 ETH a day, which cut new issuance by roughly 88% (we saw this figure in a search summary of the ethereum.org page, which we could not open directly).
Issuance is not fixed. It rises a little when more ETH is staked. One 2026 summary puts it nearer 2,600 ETH a day. Another says about 254,000 ETH was issued over the 90 days to 27 July 2026, which is about 2,800 ETH a day. Sources differ, so treat any single number as a rough range of 1,700 to 2,800.
Since August 2021, every Ethereum transaction has paid a base fee that is burned. Busy network, high fees, big burn. Quiet network, low fees, small burn.
Burn is the part that swings. After the Dencun upgrade in March 2024, many apps moved to cheaper "layer 2" networks. A layer 2 is a side network that does the work cheaply and posts a small summary back to Ethereum. That means far less fee money lands on Ethereum itself, so far less ETH is burned.
One 2026 summary reports an average burn of about 58 ETH a day over the 90 days to July 2026, against about 5,200 ETH burned in total in that window. Compare that to the thousands of ETH a day the network burned in the 2021 to 2022 boom, and you can see how much the drain has narrowed.
Here is a small table. The issuance and burn numbers are illustrative, picked to show how the sign flips. They are not a forecast.
| Day type | Issuance (ETH) | Burn (ETH) | Net (ETH) | Supply |
|---|---|---|---|---|
| Quiet day | 2,800 | 58 | +2,742 | Grows |
| Break-even day | 2,800 | 2,800 | 0 | Flat |
| Very busy day | 2,800 | 5,000 | −2,200 | Shrinks |
The lesson: for supply to shrink, burn must climb above issuance. That needs a lot of paid activity on Ethereum itself.
Using the 90-day figures above, we can do the sum ourselves:
Spread over a year, that is about 1 million new ETH. Against a supply of roughly 121 million ETH (a figure reported in 2026 summaries), that is about 0.8% a year.
This does not match some articles. A few say the net rate is about 0.2% a year. That number lines up with the 90-day window, not a full year, so we do not use it as an annual rate. Our figures come from search summaries of dashboards such as ultrasound.money, which we could not open, so check the live dashboard for today's reading. We retrieved these on 5 October 2026.
Supply is one piece of the picture. It does not decide the price. Demand, staking, market mood and the wider economy all matter too.
Still, it is a useful thing to track. A shrinking supply and a growing supply are two different stories, and the ETH story changed after 2024. Now you know which two numbers to watch.
Open the ETH page on NetWort to see its price history and risk numbers. Then compare how it has moved against the rest of your portfolio.