Ether Inflates After Gas Fees Plummet

The circulating supply of Ether has inflated to its highest level since March 14 after a sustained run of low gas fees.

According to Ultra Sound Money, 15,230 Ether ($47.8 million) were added to Ethereum’s supply since April 14, with 12,078,565.7 ETH now in circulation.

The sharp increase in Ether’s supply is the result of a persistently low burn rate over the past two weeks amid frequent spates of single-digit transaction fees. Weekly inflation currently equates to 0.425% annually.

Gas fees currently sit at just 8 gwei, up from a meager 5 gwei earlier today. Data from Ycharts shows users paying $1.25 for simple transactions, up from a four-month low of $0.63 on April 21.

The recent inflation comes after a five-month period of steady deflation for Ethereum, with its supply shrinking by 204,350.5 ETH ($641.6 million) from Oct. 30 to an all-time low of 120,063,127 on April 4.

The trend also comes despite on-chain activity within the broader Ethereum ecosystem surging into new monthly all-time highs for both active wallets and transaction volume.

While strong adoption of the Base and Polygon Layer 2 networks was the primary force driving the milestone, Ethereum’s average daily throughput has consistently trended above 13 transactions per second (TPS) in recent weeks — beating out its throughput for most of 2023.

MEV trends high post-merge

The sum of Ether gleaned through Maximal Extractable Value (MEV) also slumped to its lowest level since October this past week, with validators engaging in MEV making off with just 4,387.5 Ether in seven days for an average daily extraction of 626.8 ETH.

MEV describes advanced arbitrage techniques used by validators to extract profits by reordering or sandwiching transactions executed by ordinary web3 users.

The rate of MEV extraction has remained extremely consistent since The Merge in September 2022, with MEVers raking in 846.5 ETH daily on average since the upgrade and 844.8 ETH per day in 2024, according to Flashbots.

The data suggests that MEV extraction has significantly accelerated since The Merge, with MEV practitioners accumulating $2.4 million worth of ETH in the 30 days preceding the upgrade, compared to roughly $2.4 million in the past 10 days.

In total, MEV has extracted 498,580 ETH since The Merge went live.