I was listening to a podcast with Vitalik Buterin where he discusses Ethereum 2.0—I wanted to highlight a great explanation by Vitalik about ETH’s supply moving forward. It’s a long podcast/discussion, but I suggest jumping to 34:30 where he discusses the effects of moving to proof of stake (PoS) on ETH’s issuance.

Vitalik explains fewer ETH will be issued under PoS than proof of work (PoW). (For the full discussion on PoW vs PoS see 27:55). *although some of the podcast can get deep in the weeds, I think he explains this very well.

As we know miners receive a fair chunk of the ETH supply, but Vitalik highlights due to the less resource-intensive nature of PoS, less ETH will be needed to be awarded as the costs to participate aren’t as high. In his estimation, about 4% of the total supply is issued each year to miners, which is about 4.7M.

You can see this via the below ETH issuance chart, ~13K ETH issued a day * 365 is right around that figure. With a switch to PoS, Vitalik’s estimates the amount of ETH issued would decline significantly to around 500K–1M, anywhere from a 75-90% decrease in overall issuance compared to current figures. Although I’d to point out these are just estimations at this point, however even at his highest estimation with everyone participating this shouldn’t go higher than 2M, which is still a 50% reduction.

  • It’s also worth noting the further potential for a reducing ETH supply due to the EIP 1559 fee burn, which is expected to be passed in July.
glassnode studio ethereum issuance 1