Is Ethereum deflationary?

Ethereum is not consistently deflationary. Whether ETH supply shrinks or grows depends on a daily balance between two forces: new ETH paid to validators and ETH destroyed through fee burns. When the network is busy, the burn can outpace issuance. When it is quiet, supply grows. The EIP-1559 proposal that created the burn said plainly that its authors could not know in advance which way it would go.

Is Ethereum deflationary or inflationary?

It can be either. ethereum.org explains that after the Merge, the network stopped paying miners and now pays only stakers, which cut new issuance by about 88%. It estimated issuance at around 1,700 ETH a day when about 14 million ETH was staked. That figure rises as more ETH is staked, and Leverage Shares put staked ETH at over 36 million in early 2026.

ethereum.org says that when the average gas price over a day is about 16 gwei, the burn roughly cancels that day's issuance at the older staking level. Above that, supply falls. Below it, supply rises. Why ETH has no fixed cap at all is covered in does Ethereum have a max supply.

How does the Ethereum supply burn work?

Since August 2021, each transaction pays a base fee set by the protocol, and that fee is destroyed rather than paid to anyone. The proposal says the burn offsets issuance and also stops block producers from pushing fees up, since they never receive the base fee. They keep only the tip. The details are in what is EIP-1559.

The burn only applies to fees on Ethereum's main chain. That link to main-chain demand is why the burn swings so much.

Was ETH ever deflationary?

Yes, for a while. Leverage Shares, using Etherscan data, says total supply fell over 2023. Blockworks reported in 2024 that since the Merge, about 1.71 million ETH had been burned against 1.36 million issued, a net cut of about 346,000 ETH at that point.

The phrase "ultrasound money" grew out of that period. It described the idea that ETH could become scarcer over time, not just capped. Blockworks noted that in practice supply was proving more elastic than that.

Is Ethereum still deflationary?

Not on recent data. The Dencun upgrade in March 2024 gave layer 2 networks a cheaper place to post data, called blobs, explained in what are Ethereum blobs. Activity moved off the main chain, fewer base fees were burned, and Blockworks reported ETH's longest run of net supply growth since the Merge. Leverage Shares, citing Etherscan, put supply growth in 2025 at 0.18% and said the 30-day average daily supply change had drifted slightly positive, with about 120.7 million ETH in circulation as of April 2026.

That can change if main-chain demand rises, and future upgrades could alter the balance. For the general idea of shrinking supply, see what is a deflationary cryptocurrency. Supply rules on their own say nothing certain about future value.