- Ethereum burned about $1.2B in ETH in February 2026, exceeding the network’s 0.8% annual inflation rate.
- Median Ethereum gas fees dropped about 90% to $0.20 after the Fusaka upgrade to support cheaper transactions.
- Ethereum staking holds around 19M ETH, about 66% of supply, with validator yields near 4–5%.
Ethereum has faced renewed scrutiny after a report claimed its tokenomics weakened after the December 2025 Fusaka upgrade.
The report also disclosed short positions in Ether and ETH-linked securities. However, several network metrics and on-chain data challenge the bearish narrative and show that Ethereum continues to burn more ETH than it creates.
Gas fee decline tied to Fusaka upgrade design
Median Ethereum gas prices fell sharply after the Fusaka upgrade. Data shows fees dropped about 90 percent, from nearly $2 to around $0.20. Developers designed the upgrade to reduce transaction costs and support wider network use. Lower fees also encourage more activity on Ethereum layer-2 networks.
Despite cheaper gas, ETH burning remains active. Network data shows about $1.2 billion worth of ETH burned during February 2026.
We need more clowns like Culper. Short $ETH if you want, but nobody cares.🤡
1. Fee collapse was expected, not catastrophic
The report highlights a ~90 % drop in median gas price (from ≈ $2 to $0.20). That was the point of Fusaka: cheaper on‑chain fees encourage broader… https://t.co/pI0YNRuXEq
— Ethereum Daily (@ETH_Daily) March 6, 2026
The burn rate still exceeds the network’s annual inflation rate of about 0.8 percent. As a result, Ethereum continues to remove more ETH from supply than it issues. This structure remains part of Ethereum’s token system introduced under EIP-1559. The mechanism burns a portion of transaction fees with every block.
Transaction data challenges dust attack claims
The report claimed address poisoning and dust attacks now account for 22 percent of Ethereum transactions. It also stated that most new wallets were created for spam activity.
Blockchain data presents a different picture after adjusting for layer-2 batch transactions. When those are removed, dust-only transactions represent about four percent of activity.
Layer-2 rollups generate a large share of transactions recorded on Ethereum. Networks such as Optimism, Arbitrum, Base, and zk-EVMs submit bundled transaction data to the main chain.
Active address growth also reflects broader usage. Non-spam wallet creation rose about 12 percent year over year during the first quarter of 2026. At the same time, total active addresses increased about 117 percent year over year. Much of that growth comes from users interacting through layer-2 networks.
Validator rewards and staking levels remain stable
Ethereum’s validator system continues to show stable participation. Block rewards remain close to two ETH per block. Validator returns also include transaction tips and MEV revenue. Combined yields have stayed near four to five percent during March 2026.
That level is slightly higher than the yield on the 10-year U.S. Treasury, which trades around 4.2 percent. Analysts monitor this comparison when evaluating staking demand. Staked ETH totals around 19 million coins across the network. This amount represents about 66 percent of circulating supply.
Security models often estimate that 30 to 40 percent staking is enough for network protection. Ethereum remains well above that range. The withdrawal queue has also remained stable. Around 3.2 million ETH have been waiting in the queue for several months.
BitMine holdings and ETH market debate continue
BitMine, which trades under the ticker BMNR, remains part of the debate around Ethereum exposure. The company holds roughly 4.47 million ETH.
NEW: We are short Ether $ETH, and ETH-linked securities, incl. $BMNR.
We think ETH tokenomics are impaired following the December 2025 Fusaka upgrade. Vitalik knows it and is selling, while $ETH's most ardent bull, Tom Lee, is throwing good money after bad.$ETH is going lower. pic.twitter.com/WQnQVJWkED— Culper (@CulperResearch) March 5, 2026
The value of those holdings is close to $9 billion based on recent market prices. Corporate filings show the company’s balance increased slightly during early 2026.BitMine also generates revenue from staking operations. Annual staking income is estimated near $350 million.
The company reports more than $3 billion in cash equivalents. Supporters say the balance sheet shows stability rather than distress. At the same time, some market participants continue to take short positions in Ether and related securities.
These traders argue that Ethereum token economics weakened after the Fusaka upgrade. Others point to network burn rates, staking levels, and user growth as indicators that Ethereum activity remains strong.
