What is the Supply Limit of Ethereum?
Ethereum, as a blockchain platform, does not have a strict supply limit like Bitcoin, which is capped at 21 million coins. Instead, Ethereum operates on a different monetary policy. As of August 2021, Ethereum transitioned to Ethereum 2.0 and the Proof-of-Stake (PoS) consensus mechanism, which significantly alters how new Ether (ETH) is issued and impacts its total supply.
With the introduction of the EIP-1559 upgrade implemented in August 2021, Ethereum's fee market changed. This upgrade introduced a base fee that is burned (destroyed) for each transaction, which means it effectively reduces the supply of ETH over time. Consequently, while there isn't a fixed supply cap, the burning mechanism can create deflationary pressures, especially during periods of high network activity.
On average, Ethereum's issuance is around 2 ETH per block, but this can vary based on network conditions and the amount of ETH burned. Overall, the supply of Ethereum is dynamic and responsive to demand, which can lead to variations in ETH's scarcity and value over time.
In conclusion, there is no finite supply limit for Ethereum like Bitcoin, but mechanisms introduced in recent upgrades aim to balance issuance and create potential deflationary effects.