Since Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) in September 2022, the circulating supply of Ethereum has increased by over 950,000 ETH. The total circulating supply is currently around 121.5 million ETH, with an annualized inflation rate (supply growth rate) holding steady at approximately 0.23%. The inflation is due to staking rewards for validators exceeding the transaction fees burned through the EIP-1559 mechanism. The main reasons are the increase in staking volume and the offloading to Layer 2 solutions. Supply change = New staking rewards (issuance) − EIP-1559 base fees (burned). For Ethereum to enter deflation, it seems a strong narrative would be needed to make it happen.