Ethereum defies bearish brief as $1.2B daily burn dampens network inflation

TLDR

Ethereum's daily ETH burn reached $1.2B in February 2026, still outpacing the 0.8% annual inflation rate.

The benchmark APR is pegged at 4–5% in March 2026, slightly higher than the 10-year US Treasury yield of 4.2%.

After removing L2 batch submissions, spam transactions are only 4% of real network activity.

Active Ethereum addresses increased by 117% year-on-year, led by real users on Arbitrum, Base and zk-EVMs.

In the year By early 2026, Ethereum metrics will challenge claims of latency as network burnout continues to outpace supply. A brief report from Culper Research raised concerns about payment congestion, spam activity and verifier durability.

But data on the chain in February and March 2026 presents the opposite picture. Daily ETH burning remained at 1.2 billion dollars in February, exceeding the 0.8% annual inflation rate. The network continues to spend more ETH than it generates while maintaining supply flexibility.

Burn rate and pay data contradicts the narrative.

Culper's research indicates a 90% drop in average gas prices as a sign of network disruption. Following the Fusaka update, fees dropped from $2 to roughly $0.20.

That failure, however, was built into the reform's design from the start. The goal was to reduce costs and redirect activity toward Layer 2 solutions. The fall was expected, not terrifying.

Despite low gas prices, total daily ETH burn has been pegged at $1.2 billion through February 2026. That figure is still higher than the net 0.8% annual inflation rate.

As a result, Ethereum has destroyed more ETH than it has created, but in practice it remains defunct. The Tokinomics debate over ETH loses ground when data is burned.

Ethereum Daily, a crypto commentary account on X, live streamed the report. The report says: “We need more singers like Culper. Short $ETH if you want, but nobody cares.”

TIn Culper's report he systematically described each claim. The response resonated widely across crypto communities online.

Fusaka's upgrade fee reduction is also attracting more participants to the ecosystem. Low transaction costs make Ethereum more accessible to everyday users.

That accessibility supports adoption in the retail and institutional segments. Over time, its wider use increases the overall burn rate, even at lower rates per unit.

Reliable product and user growth support network stability

Confirming economics will continue to compete into Q1 2026. Block rewards last approximately 2 ETH per block.

The total guaranteed APR, including MEV awards, was between 4% and 5% in March 2026. That return is slightly higher than the 10-year U.S. Treasury yield of 4.2%.

Staked ETH is currently around 19 million, which represents 66% of the total supply. That level is well above the 30-40% threshold considered adequate for network security.

It has stood at around 3.2 million ETH for six consecutive months. Culper's claimed growing backlog doesn't match that data.

On the activity side, Culper points out that dust attacks account for 22 percent of all transactions. After removing L2 batch deliveries, spam transactions represent only about 4% of real network activity.

Non-spam wallet creation grew approximately 12% year-over-year in Q1 2026. Active addresses also increased 117% year-on-year, driven by users on Optimism, Arbitrum, Base and zk-EVMs.

BitMine (BMNR) has been investigated for ETH holdings in the report. The company holds 4.47 million ETH, worth about $9 billion.

Stock jobs generate about $350 million a year in fees. With more than $3 billion in cash on hand, the company shows no signs of financial stress.