Ethereum burn rate hits all-time low
March 24, 2025
The Ethereum network has recorded its lowest-ever daily burn rate since the introduction of the EIP-1559 mechanism. On March 22, only 53.07 ETH—around $106,000—was burned. For comparison, during high network load, tens of thousands of ETH were being burned daily.
How Ethereum Became Deflationary
The burn mechanism was introduced in 2021 with the London hard fork. The implementation of EIP-1559 fundamentally changed Ethereum’s economics: part of every transaction fee was permanently removed from circulation, reducing the total ETH supply. During periods of high network activity, this turned ETH into a deflationary asset—more coins were burned than issued.
What Changed With Dencun
In spring 2024, Ethereum developers deployed the Dencun upgrade on the mainnet. One of its main features was EIP-4844, which introduced Proto-Danksharding—a scaling technology that simplified and lowered the cost of storing large volumes of data.
This was a huge benefit for rollup-based L2 networks: transaction fees dropped dramatically, and so did the ETH burn rate. As a result, from early April 2025, the market supply of ETH began rising again. According to analysts, the amount of ETH in circulation has now returned to levels seen before The Merge with Beacon Chain in September 2022.
Is Ethereum Inflationary Again?
Over the past 30 days, Ethereum’s annualized inflation rate has reached 0.73%. This is not only due to lower fees, but also a drop in user activity. The number of active addresses has fallen to its lowest since fall 2024, and daily transaction volumes and transferred value have declined as well.
And it may get worse. Some experts warn that the upcoming Pectra upgrade—which will increase the target and max limits for BLOB objects—could push inflation even higher. The upgrade is expected no earlier than the end of April.
Price Forecasts Head Lower
Amid slower burning and rising ETH supply, analysts have revised their ETH price forecast for 2025 down from $10,000 to $4,000. One key reason: the growing popularity of L2 solutions like Base, which shift activity away from the mainnet and reduce congestion.