Ethereum’s Economic Model
Go Private Market Guide
March 26, 2025
GoGPT Summarizes Articles
Ethereum’s monetary policy differs from Bitcoin’s fixed 21-million supply cap. Instead, Ethereum has a dynamic issuance model:
-
Pre-Merge: Miners minted approximately 2 ETH per block.
-
Post-Merge: Validators earn significantly less, reducing ETH issuance.
-
EIP-1559 (2021 Upgrade): A portion of every transaction fee is burned, reducing ETH supply over time.
Ethereum functions as both a store of value and a utility token. Its price fluctuates based on network demand—higher activity in DeFi and NFT markets increases gas fees, driving ETH demand. For instance, during the 2021 NFT boom, gas fees surged to over 200 gwei (a fraction of ETH), illustrating real-time economic dynamics.