In this lesson
- find out how new ETH is created and how it is destroyed
- understand why ETH's supply shrank for a while and then grew again
- learn to check the "ultrasound money" slogan against the data
Bitcoin has a simple story: there will never be more than 21 million. Ethereum has no cap – and yet in 2022 people started talking about "ultrasound money", scarcer than digital gold. The megaphone announced one thing; the data later showed another.
What adds to the supply and what takes away#
- Added: validators receive newly created ETH for their work. Today it is roughly 1.08 million ETH a year (about 2,960 a day).
- Removed: the base fee of every transaction is burned. How much gets burned depends on how much the network is used.
When more is burned than added, the supply falls. When less, it grows.
"Ultrasound money"#
After The Merge the creation of new ETH dropped by roughly 90% (validators cost less than miners). The network was busy, fees were high and a lot was burned. The supply began to fall – and Ethereum's supporters came up with the slogan ultrasound money: money that becomes scarcer.
What the data shows#
| Date | ETH supply |
|---|---|
| 15 Sep 2022 (The Merge) | 120.52 million |
| 5 Apr 2024 (the lowest point) | 120.06 million |
| 1 Jan 2025 | 120.47 million |
| 1 Jan 2026 | 121.34 million |
| 11 Oct 2026 | 122.12 million |
Source: ultrasound.money, downloaded 11 October 2026.
The supply really did fall – from the end of 2022 to spring 2024. Then came the Dencun upgrade, layer 2 networks started storing data cheaply and little is burned on the main network. Since April 2024 the supply has grown every month, in October 2026 at about +0.86% a year. Since The Merge 1.6 million ETH have been added in total.
For comparison: had Ethereum stayed on mining, the supply would grow by roughly 4% a year. So the burn still works – it just is not enough.
What ETH is used for#
- It pays the fees on Ethereum and on most layer 2 networks.
- A deposit in staking – anyone who wants to validate has to lock up ETH.
- Collateral in DeFi – people borrow against ETH.
All of this creates demand. Whether it will be big enough to hold the price up, nobody knows.
A story is not an investment thesis
Slogans like "ultrasound money" sound convincing until the conditions change. ETH's supply follows how the network is used – and that turned around within two years. Before you believe something, look at the current data.
Common myths#
- "ETH is deflationary." It was – for about a year and a half. Since April 2024 the supply has grown.
- "The burn guarantees a rising price." The burn only reduces supply. Demand sets the price too.
- "ETH has a cap like Bitcoin." It does not. Creation and burning set the supply, not a fixed number.
Summary
- Validators receive new ETH (~1.08 million a year); base fees are burned.
- From the end of 2022 to spring 2024 the supply fell – hence "ultrasound money".
- Since the Dencun upgrade the supply has grown again, in October 2026 by about 0.86% a year.
- ETH pays fees and serves as collateral; that promises nothing about its future price.