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    Ethereum Issuance Rate Drops after The Merge

    Months before The Merge process finished, a simulation showed that the network's issuance rate would drop as the ruleset changed. Statistics show that the simulation's predictions have come true as the network's issuance rate has slowed significantly since September 15.

    As of August 5, 2021, Ethereum has changed from inflation to deflation by introducing the EIP -1559 upgrade. Since the August 5 upgrade, the network has eliminated 2,627,061 ETH worth $8.56 billion. However, since The Merge, Ethereum has been much more deflationary as the change redefined the issuance rate.

    Supply growth and issuance statistics if Ethereum were still a PoW chain (Source: Ultrasound.money)

    For example, metrics from the ultrasound.money shows that 3,076 ETH has been issued since The Merge on September 15th. If Proof-of-Work (PoW) miners were still mining Ether, there would have been 53,694 Ether. The current data shows that after the merger, Ethereum’s issuance rate dropped by more than 94%. These new characteristics are considered beneficial as they make Ether more scarce.

    Less Than 4.6 Million Ethereum Next Year Thanks to EIP-1559 and The Merge

    Currently, post-merger data indicates that 297,000 ETH will be burned annually at current rates, and issuance has decreased from 3.78% per year to 0.22% to 0.25% per year. Before The Merge, miners have been generating 4,931,000 ETH per year but since the transition to PoS, the annual issuance has dropped to 603,000 ETH per year.

    Emissions have decreased significantly since the transition (Source: Ultrasound.money)

    At the time of this writing,

    The issuance of ETH if PoW persisted (Source: Ultrasound.money)

    This means that if Ethereum never merged, on September 19, 2023, the total supply will be around 125,514,249, not counting the burn rate of EIP-1559. With the burn rate and post-merger rules, the total supply of ETH on September 19, 2023 is estimated to be 120,889,249 or lower than 4,625,000 ETH compared to the previous PoW consensus rules.

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