Since the London update went live on August 5, around 1.2 million ETH have already been burned on the Ethereum network.
ETHs burned on Ethereum
In fact, the new update provides that a portion of the fees paid in ETH for each transaction to be recorded on the Ethereum blockchain will be burned, thus removing a small portion of ETH from circulation forever.
Since this now happens for every mined block, the number of ETH being burned in this way continues to increase.
However, it must be said that the ETH burned in this period is less than those created to be given as prizes to miners, so in total, the number of ETH in circulation has increased anyway.
However, if from January to July the number of ETH in circulation had increased by about 3 million units, from August until now it has increased by less than 1 million units.
It means that in 2020 the supply of ETH increased by 4.6%, while in 2021, it only increased by 3.5%.
At such a pace throughout 2022, the ETH supply could increase by less than 2%.
The comparison with Bitcoin
Note that this is in some ways similar to Bitcoin.
In fact, at the current rate in 2022, the BTC supply is expected to increase by about 1.7%, so next year the inflation of the ETH supply will become comparable to that of BTC, if perhaps still slightly higher.
In 2024, however, with the fourth halving, BTC supply inflation will drop to 0.8%.
However, one must take into account that when Ethereum moves from Proof-of-Work to Proof-of-Stake, there will no longer be a need to remunerate miners, so the premium for those who validate a block may be reduced. That would also reduce the creation of new ETH, dropping ETH money supply inflation well below 2%.
The London Update
However, the London update likely had a downside, namely higher fees.
Although the annual peak of the average gas occurred in mid-May when an average of $70 was paid for every single transaction, in July, this average was back below $4.
Instead, starting in August, there was a substantial and lasting increase in fees, with the average reaching almost $63 in mid-September and never returning below $15, except for one day.
Instead, mainly thanks to the increasing use of Lightning Network, the fees per transaction on the Bitcoin network have been reduced during 2021, from $8 to $2. In particular, after a peak at $63 in the second half of April, a rapid decline was triggered that brought the average below $10 in late May and then below $5 in July. Since then, it has never risen above this threshold, often remaining below $4.