Ethereum's Burning Mechanism

​Ethereum differs from Bitcoin in that it does not have a fixed supply cap. Since its launch in 2015, approximately 72 million Ether (ETH) have been generated through initial coin offerings (ICOs). Initially, the reward for each block was 5 ETH, which has gradually decreased through multiple upgrades. After the 'Merge' upgrade in 2022, Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS), further reducing the new issuance.

​Additionally, the implementation of the EIP-1559 proposal introduced a burning mechanism, where a portion of ETH is destroyed with each transaction, potentially leading to deflation when transaction demand is high. As of November 2024, the total supply is approximately 120 million coins. With the reduction in rewards and the impact of the burning mechanism, the supply growth of Ethereum has significantly slowed. $ETH