Ethereum Now Deflationary for 2 Months Straight

Decentralized exchange Uniswap and NFT marketplace Blur top the ETH burned leaderboard in the past 30 days

article-image

Furkan Cubuk/Shutterstock modified by Blockworks

share

Ethereum has been deflationary for two months straight due to a surge in on-chain activity on protocols such as Uniswap and Blur.

The network pushed an upgrade (EIP-1559) in August 2021 that meant transaction fees would be burned instead of directed to the network’s miners — a precursor to Ethereum’s switch to proof-of-stake last September.

EIP-1559 at times inspired Ethereum to produce deflationary blocks (more ETH burned than distributed). But the asset has now been solidly deflationary every day since late January, per network tracker ultrasound.money.

Prior to that, Ethereum had briefly entered deflationary status in November 2022, about two months after Ethereum’s Merge cut issuance by more than 90%, before slipping back to inflationary by December.

Ultrasound.money only maps Ethereum’s deflationary status since the Merge — making its recent streak the longest on record for this particular tracker.

Research analysts at Compass Point Research and Trading said in a research report earlier this month that the increase in burned ETH has largely been driven by increased Uniswap usage in response to centralized exchange uncertainty, as well as continued usage of the Blur NFT marketplace.

Uniswap tops the ETH burned leaderboard in the past 30 days, with roughly 8,766 ETH ($16 million) burned in that span. NFT marketplace and aggregator Blur has burned about 6,535 ETH ($11.9 million) over the last month. 

“The amount of ETH burned has seen a steady climb over the past two months due to an increase in on-chain activity, with the largest surge occurring on March 10 as fear surrounding USDC’s backing caused a depeg,” Blockworks Research Analyst Sam Martin said. 

“On-chain users scrambled to dump USDC for USDT, which led to the largest daily burn since the Merge’s implementation.”

Read More: Blur Still Sees Record NFT Volumes Even After Crypto Airdrop

The depegging of USDC followed the collapse of Silicon Valley Bank (SVB). It plunged to as low as $0.87 before ultimately returning to its $1 peg.  

The failures of financial institutions in recent weeks, including Silvergate, SVB and Signature Bank, have prompted crypto industry participants to advocate for decentralized financial infrastructure as a more secure and reliable alternative.  

Compass Point’s March 9 report predicted that the introduction of layer-2 blockchains can take market share away from so-called “ETH killers” and bring users back to the Ethereum network.

“We continue to believe that L2 scaling and liquid staking growth have the potential to be significant catalysts for Ethereum this year, and help drive on-boarding of users, adoption and overall demand and activity of the network,” analysts wrote.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

The startup says it aims to rival Stripe and Worldpay by using stablecoins to speed merchant settlements from days to seconds

by Blockworks /
article-image

“S&P 500” for crypto comes as segment gains “established role in global markets,” S&P exec says

article-image

The S&P Digital Markets 50 Index combines 15 cryptocurrencies with 35 crypto-linked companies, offering investors hybrid exposure

by Blockworks /
article-image

Gnosis is betting that openness — not ownership — will define the future of onchain money

article-image

Crypto’s quest to imbue shareholder protections for tokens

article-image

Grass previously raised a seed and Series A rounds and plans to utilize the token purchase to execute on its roadmap