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In 2022, the Ethereum network withdrew 1.8 million coins from circulation.

Published: 2023-01-16

In 2022, the Ethereum network burned about 1.8 million coins. At the same time, in the second quarter, the pace of the process significantly decreased against the backdrop of falling quotes of the second-largest cryptocurrency in terms of capitalization.

Since the activation of EIP-1559, the Ethereum network has withdrawn nearly 2.8 million ETH from circulation.

The largest number of coins (~254,000 ETH) was withdrawn from circulation as part of transactions between users. OpenSea NFT marketplace and Uniswap v2 protocol took second and third place with 230,000 ETH and 145,000 ETH, respectively.

In autumn, the developers switched the blockchain to the Proof-of-Stake consensus algorithm. In the period from September 2022 to January 2023, the issue of the asset increased by 3146 ETH. If the network continued to use the Proof-of-Work mechanism, the figure could exceed 1.38 million ETH.

At the end of the year, the share of cryptocurrencies blocked in smart contracts of decentralized applications reached 25.62% - during the reporting period, the value decreased by almost 4%. Over 12 months, the total amount of Ethereum held on centralized platform accounts decreased by 14.5% to ~19.3 million ETH.

Such dynamics is observed not only because of the protracted market correction, but also because of the "black swans" that have undermined investor confidence. In the first case, this was influenced by the collapse of the Terra ecosystem, in the second, by the collapse of the FTX cryptocurrency exchange.

During 2022, the number of validators on the Ethereum network grew by 79%, reaching 495,252 in December. The volume of assets in staking exceeded 15.85 million ETH - in 12 months, the inflow of assets amounted to ~ 7 million coins.

The Ethereum team plans to activate the Shanghai hard fork tentatively in March 2023. The update includes EIP-4895, which will allow you to withdraw ETH from the Beacon Chain staking contract.