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How Does EIP-1559 Impact Ethereum’s Supply and Inflation Rate?

Burning the base fee can make Ether supply net deflationary if the burned amount exceeds the new Ether issued as staking rewards.
Greeks.live05.12.25

How Does EIP-1559 Impact Ethereum’s Supply and Inflation Rate?

By burning the base fee, EIP-1559 introduces a significant deflationary mechanism. The net change in supply depends on the amount burned versus the amount issued as staking rewards.

In periods of high network activity, the burning can exceed issuance, leading to a net reduction in the total supply of Ether, making it deflationary.

Does Burning Guarantee a Net Deflationary State for Ethereum?
What Is the Purpose of ‘Burning’ a Portion of the Gas Fee (EIP-1559)?
What Is the Current Annual Issuance Rate for Staked Ethereum?
What Is the Relationship between Transaction Volume and the Deflationary Effect?
How Does the “Burning” of the Base Fee in EIP-1559 Create Deflationary Pressure on ETH?
How Does EIP-1559 Relate to the Ethereum Fee Market?
What Is EIP-1559 and How Did It Change the Gas Fee Mechanism on Ethereum?
How Does the Transition to Proof-of-Stake Affect Ether’s Issuance Rate?

Glossar

Inflation

Purchasing ⎊ General economic inflation erodes the real value of fiat collateral used to back traditional financial derivatives, creating an incentive for utilizing crypto assets as an inflation hedge.

Eip-1559

Upgrade ⎊ EIP-1559, or Ethereum Improvement Proposal 1559, represents a significant upgrade to the Ethereum network's transaction fee mechanism.

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