Ethereum supply dynamics at a glance: ETH staked, gas usage, exchange balances

This article will discuss Ethereum supply dynamics, including ETH staking, gas usage, exchange balances, ETH in smart contracts, re-staking and liquidity re-staking, and Eigenlayer.

(1) ETH staking

Starting with total ETH staked, it’s a massive uptrend and right at the ATH level.

This is against the largest pledge ever from Celsius/Figment, around 573,000 ETH.

On the other hand, a lot of new ETH is being staked, a large portion of which is driven by Eigenlayer (more on this later).

(2) Use of Gas

ETH has been deflationary for the past 30 days and for the past 493 days (since the merger).

Gas consumption is mainly driven by Uniswap, ETH transfers, Tether/USDC, L2s, Metam4sk and OpenSea/Blur.

Further insight into L2:

Their share of total gas consumption is trending upwards. Dencun’s EIP-4844 will change things a bit, but here are the numbers for the above timeframe:

The issuance offsets in the 30-day and 493-day timeframes are 1.08x/1.13x, mainly in the bear/recovery phases.

(3) Exchange balance

Next, let’s look at exchange balances. We can see that over the past year, the amount of Ethereum on exchanges has dropped from 19.6 million to a low of 14.9 million.

(4) ETH in smart contracts

The trend continues upwards and is now almost at an all-time high (sorry, no chart).

(5) Re-pledge

@eigenlayer holds ~745,000 ETH (note the Llama graphic is a bit old). This number has been growing steadily despite major LSTs reaching their caps driven by protocols EtherFi, Kelp, and Renzo.

The protocols have added around 220,000 staked ETH since early December and continue to grow steadily ahead of the launch of @eigen_da, a Celestia competitor.

The regular LST cap increase is scheduled for January 29th for a period of 5 days.

In addition to the general excitement about Eigenlayer, there was even more excitement when the Polychain-backed restaked rollup Binance Launchpool project @alt_layer announced an airdrop for @CelestiaOrg stakers and @eigenlayer re-stakers.

Altlayer is scheduled to launch its token on the 25th of this week.

This airdrop announcement has certainly sparked speculation about future airdrops to Eigenlayer retryers from other AVS and adjacent projects.

Overall, there are positive trends on both the supply and demand sides. Factors such as DeFi, L2, and Eigenlayer continue to absorb more Ethereum, while the supply side is net tight. At the same time, Celsius finally stopped selling, and the hype of Ethereum spot ETF is also brewing.

In addition to these, I expect several other major Ethereum projects to launch their tokens in the first half of 2024, with @LayerZero_Labs already confirmed and Starkware/zkSync also widely anticipated.