If a public-chain asset once hailed by the market as “ultrasound money” has, for nearly a year, seen 98% of its newly issued coins go unmatched by coins burned through on-chain fees, then the scarcity thesis underpinning its high valuation must face a brutal reassessment.
【The Ultrasound Money Myth Fades: Ethereum Burns Only 2% of New Issuance in 2026, With Net Issuance Exceeding 770,000 ETH】
According to the latest figures from the on-chain ledger ethsupply.fyi, cited by crypto news outlet CryptoSlate, Ethereum’s cumulative gross issuance from the start of 2026 through October 9 reached 796,623 ETH. Meanwhile, just 16,525 ETH was burned through mainnet execution fees and Blob data fees, for a burn rate of only 2.074% of gross issuance.
After accounting for consensus-layer penalties and a small amount of additional burning, Ethereum’s circulating supply has increased by a net 778,413 ETH so far in 2026, expanding total token supply by approximately 0.64% (from around 121.3 million to 122.1 million ETH). These objective figures mark a substantive reversal of the deflationary “Ultrasound Money” narrative championed by bulls since EIP-1559 and the Ethereum Merge. Ethereum has once again entered a sustained period of moderate inflation.
【L2 Boom Drains L1 Value Capture: ETH’s Pricing Predicament as a Cheap Data Layer】
What does this mean for readers? Across several recent upgrades, from Dencun’s introduction of Blob space—which sharply reduced Layer 2 fees—to the subsequent scaling advances in Pectra and Fusaka, Ethereum’s core development roadmap has indeed achieved its goal of making transaction fees on Layer 2 networks such as Arbitrum, Base, and Optimism negligible. But the cost of this scaling has been passed directly on to ETH holders.
Layer 2 networks benefit from extremely fast execution and substantial transaction-fee revenue, while paying Ethereum mainnet only minimal rent for Blob data. Much of the Base Fee that would otherwise have been burned on Ethereum Layer 1 has been siphoned away, leaving average mainnet Gas fees languishing at historic lows of 1 to 3 Gwei for an extended period. According to actuarial models, for Ethereum to return to issuance-revenue equilibrium under the current 60 million Gas Limit—fully offsetting daily issuance of around 2,992 ETH—the average mainnet Base Fee would need to remain at no less than 13.85 Gwei. This means that, before the next-stage Glamsterdam upgrade raises the Gas Limit to 200 million, ETH’s deflation premium will be difficult to revive without an explosive resurgence in native on-chain demand, continuing to weigh on its valuation multiple relative to Bitcoin and other high-performance public blockchains.
【Key Indicators to Watch: The 14 Gwei Base Fee Threshold and the $2,550 Resistance】
Given the profound changes in Ethereum’s supply-and-demand structure, secondary-market investors should keep a close eye on two quantifiable indicators:
First, the relationship between mainnet Gas fees and the net issuance trend. 13.85 Gwei is the theoretical threshold for Ethereum to return to deflation. If on-chain applications of various kinds cannot push the median mainnet Base Fee above 10 Gwei in the fourth quarter, Ethereum’s annualized net inflation rate may remain entrenched in the 0.8% to 1.0% range. Investors should view ETH as an income-generating asset with staking yield but a moderate dilution risk, rather than as an absolutely scarce asset;
Second, the spot-market bull-bear divide at $2,550 and the $2,440 support level. According to the latest Binance spot-market data, ETH is currently trading at around $2,494, up approximately 0.3% over 24 hours, with an intraday range of $2,474 to $2,521 and 24-hour trading volume on Binance exceeding $413 million. Technically, $2,550 is a dense resistance zone where several recent rallies have stalled. If price fails to break through this level on rising volume in the short term, negative feedback from increased supply and a weakening exchange rate could push it down to test the $2,440–$2,460 support zone. A break below $2,440 would raise the risk of a further decline toward $2,380 in search of support.
These are personal views and a compilation of information, not investment advice. DYOR.
$ETH #Ethereum #Tokenomics
【The Ultrasound Money Myth Fades: Ethereum Burns Only 2% of New Issuance in 2026, With Net Issuance Exceeding 770,000 ETH】
According to the latest figures from the on-chain ledger ethsupply.fyi, cited by crypto news outlet CryptoSlate, Ethereum’s cumulative gross issuance from the start of 2026 through October 9 reached 796,623 ETH. Meanwhile, just 16,525 ETH was burned through mainnet execution fees and Blob data fees, for a burn rate of only 2.074% of gross issuance.
After accounting for consensus-layer penalties and a small amount of additional burning, Ethereum’s circulating supply has increased by a net 778,413 ETH so far in 2026, expanding total token supply by approximately 0.64% (from around 121.3 million to 122.1 million ETH). These objective figures mark a substantive reversal of the deflationary “Ultrasound Money” narrative championed by bulls since EIP-1559 and the Ethereum Merge. Ethereum has once again entered a sustained period of moderate inflation.
【L2 Boom Drains L1 Value Capture: ETH’s Pricing Predicament as a Cheap Data Layer】
What does this mean for readers? Across several recent upgrades, from Dencun’s introduction of Blob space—which sharply reduced Layer 2 fees—to the subsequent scaling advances in Pectra and Fusaka, Ethereum’s core development roadmap has indeed achieved its goal of making transaction fees on Layer 2 networks such as Arbitrum, Base, and Optimism negligible. But the cost of this scaling has been passed directly on to ETH holders.
Layer 2 networks benefit from extremely fast execution and substantial transaction-fee revenue, while paying Ethereum mainnet only minimal rent for Blob data. Much of the Base Fee that would otherwise have been burned on Ethereum Layer 1 has been siphoned away, leaving average mainnet Gas fees languishing at historic lows of 1 to 3 Gwei for an extended period. According to actuarial models, for Ethereum to return to issuance-revenue equilibrium under the current 60 million Gas Limit—fully offsetting daily issuance of around 2,992 ETH—the average mainnet Base Fee would need to remain at no less than 13.85 Gwei. This means that, before the next-stage Glamsterdam upgrade raises the Gas Limit to 200 million, ETH’s deflation premium will be difficult to revive without an explosive resurgence in native on-chain demand, continuing to weigh on its valuation multiple relative to Bitcoin and other high-performance public blockchains.
【Key Indicators to Watch: The 14 Gwei Base Fee Threshold and the $2,550 Resistance】
Given the profound changes in Ethereum’s supply-and-demand structure, secondary-market investors should keep a close eye on two quantifiable indicators:
First, the relationship between mainnet Gas fees and the net issuance trend. 13.85 Gwei is the theoretical threshold for Ethereum to return to deflation. If on-chain applications of various kinds cannot push the median mainnet Base Fee above 10 Gwei in the fourth quarter, Ethereum’s annualized net inflation rate may remain entrenched in the 0.8% to 1.0% range. Investors should view ETH as an income-generating asset with staking yield but a moderate dilution risk, rather than as an absolutely scarce asset;
Second, the spot-market bull-bear divide at $2,550 and the $2,440 support level. According to the latest Binance spot-market data, ETH is currently trading at around $2,494, up approximately 0.3% over 24 hours, with an intraday range of $2,474 to $2,521 and 24-hour trading volume on Binance exceeding $413 million. Technically, $2,550 is a dense resistance zone where several recent rallies have stalled. If price fails to break through this level on rising volume in the short term, negative feedback from increased supply and a weakening exchange rate could push it down to test the $2,440–$2,460 support zone. A break below $2,440 would raise the risk of a further decline toward $2,380 in search of support.
These are personal views and a compilation of information, not investment advice. DYOR.
$ETH #Ethereum #Tokenomics