Ethereum’s transition from proof-of-work to proof-of-stake has materially changed the network’s supply dynamics. Months before The Merge, simulations suggested that ETH issuance would fall sharply once the chain adopted the new validation model. The latest post-Merge statistics indicate that this projection has largely played out, with Ethereum now issuing far fewer coins than it would have under the previous proof-of-work regime.
A sharp drop in issuance after the Paris upgrade
The key change came on September 15, when the Paris upgrade triggered The Merge and replaced mining-based issuance with staking-based issuance. According to data cited from ultrasound.money, Ethereum had issued only about 3,076 ETH since the Merge at the time referenced in the source material. Under the old proof-of-work system, miners would have produced roughly 53,694 ETH over the same period.
That gap implies a reduction of more than 94% in ETH issuance compared with what Ethereum would have generated had it remained a PoW network. In practical terms, the network’s new monetary profile is defined by much lower supply expansion. For market participants who focus on issuance as a core component of long-term asset valuation, this change is one of the most significant outcomes of Ethereum’s consensus overhaul.
EIP-1559 laid the groundwork before the Merge
Ethereum’s supply story did not begin with the Merge alone. The earlier introduction of EIP-1559 in the London upgrade on August 5, 2021 had already altered the protocol’s monetary behavior by burning the base fee attached to transactions. Since that upgrade, the network has destroyed approximately 2,627,061 ETH, which the source valued at about $8.56 billion at the time of writing.
EIP-1559 changed Ethereum from a system where all issuance added to supply into one where part of network activity directly removes ETH from circulation. The more users transact and pay base fees, the more ETH is burned. This mechanism gave Ethereum a path toward lower net supply growth even before proof-of-stake was activated.
After the Merge, that burn mechanism remained in place while gross issuance dropped dramatically. The result is a much tighter supply environment. This combination is central to the argument from ETH advocates who describe the asset as “ultra sound money”—a phrase meant to signal a level of scarcity that supporters believe compares favorably with traditional notions of hard money.
Annual issuance and burn rates point to a much lower supply trajectory
The post-Merge statistics in the source indicate that, at current rates, Ethereum is on track to burn roughly 297,000 ETH per year. At the same time, annual issuance has dropped from around 3.78% before the Merge to about 0.22% to 0.25% afterward.
Measured in absolute terms, the difference is substantial. Before the transition, miners would have added roughly 4,931,000 ETH per year. Under proof-of-stake, annual new issuance falls to approximately 603,000 ETH. This is not a marginal adjustment; it is a structural reset of Ethereum’s monetary issuance model.
Because issuance is now so much lower, the burn introduced by EIP-1559 has greater relative impact. In a high-issuance system, fee burns may only slow inflation. In a low-issuance system, the same burn can push net supply growth toward zero or below zero, depending on transaction demand and fee conditions.
What the supply could look like a year later
At the time referenced by the article, Ethereum’s circulating supply stood at about 120,583,249 ETH, with an aggregate market value of roughly $158.57 billion. The source also offered a forward-looking comparison to illustrate the long-term significance of the new rules.
If Ethereum had never completed the Merge, and if one ignored the burn effect from EIP-1559, total supply by September 19, 2023 would have been around 125,514,249 ETH. Under the actual post-Merge framework, including the burn mechanism and lower PoS issuance, projected supply for the same date was estimated at about 120,889,249 ETH.
That difference amounts to roughly 4,625,000 fewer ETH than under the previous proof-of-work consensus rules. For investors and analysts, such a divergence is significant because it illustrates how consensus design and fee mechanics can alter the long-term monetary base of a blockchain network.
Why this matters to Ethereum’s market narrative
Scarcity has always been central to crypto asset valuation debates. Bitcoin’s halving schedule is often cited as the benchmark for predictable supply tightening. Ethereum’s case is different: rather than relying on periodic issuance cuts, it combines a permanently lower issuance regime under proof-of-stake with an activity-dependent burn mechanism under EIP-1559.
This design means Ethereum’s net supply is more sensitive to on-chain usage. When activity is strong and fees rise, more ETH is burned. When activity is weaker, burns may slow, but the reduced issuance floor still keeps overall supply growth much lower than under proof-of-work. Supporters argue this makes Ethereum’s monetary design uniquely dynamic while still preserving scarcity.
At the same time, the strength of the deflationary narrative depends on real network conditions. Burn levels are not fixed; they fluctuate with demand for block space. If transaction activity drops, burn rates can decline, reducing or even eliminating net deflation for a period. So while the Merge and EIP-1559 together have clearly tightened ETH supply, the degree of future deflation will continue to be shaped by user activity on the network.
A redefined issuance model
The data highlighted in the source leaves little doubt that Ethereum’s post-Merge issuance has changed dramatically. A supply reduction of more than 94% relative to the old proof-of-work path, combined with ongoing base-fee burns, has reshaped how the market evaluates ETH as an asset.
Whether one accepts the “ultra sound money” label or not, the underlying facts are notable: Ethereum now issues far less ETH than before, burns part of its fee revenue by design, and appears set on a significantly lower long-term supply trajectory than it would have followed under mining. That makes the Merge not just a technical milestone, but a foundational shift in Ethereum’s monetary policy.