Data from cryptocurrency intelligence firm OKLink indicates that ether (ETH) supply on centralized exchanges is at a 3-year low.
Ether’s Scarce Supply Among CEXs
Ether (ETH), the cryptocurrency powering the vast majority of the rapidly developing digital assets space has hit a 3-year low supply at all centralized exchanges, data from OKLink shows.
Notably, a mere 9.4% of ETH is currently held in centralized crypto exchanges which happens to be the lowest figure since 2018.
According to data, out of the 117 million ETH currently in circulation, only 11 million were held on crypto wallet addresses related to CEXs. For the uninitiated, ETH is the world’s second-largest cryptocurrency by reported market cap only following bitcoin (BTC).
The current 11 million ETH held in CEXs across the world is the lowest since 9 million out of the total of 97 million ether held in CEX addresses in February 2018.
Speaking to Cryptox, Eddie Wang, senior researcher at OKLink attributed the lowering ETH supply across centralized exchanges to the rise of decentralized finance (DeFi).
Wang pointed out the significance of Wrapped Ether (WETH) in concentrating ETH supply as it is the top address in the Ether Rich List. In addition, the declining ETH supply across CEXs is due to the rising amount of deposits and liquidity pools hosted by popular DeFi protocols that suck away the ether liquidity from centralized exchanges.
For the uninitiated, Wrapped Ether essentially ‘wraps’ ether into an ERC-20 token that is relatively easier and cheaper to swap and transfer around. Of the total ether supply, WETH represents a considerable 5.7% supply.
Ethereum 2.0 Adding Fuel to Fire
Wang added the anticipation toward Ethereum’s highly-anticipated ETH2.0 upgrade might be adding to ether’s supply-side crisis among centralized exchanges.
According to data from Dune Analytics, close to 6.5 million ether is locked into ETH2.0 deposit contract address.
In related news, BTCManager reported that approximately 23% of the ETH supply is currently locked in smart contracts across the blockchain and cryptocurrency industry.
Most recently, the Ethereum network successfully underwent the London hard fork that witnessed the implementation of the highly contentious EIP-1599 upgrade which aims to make ETH a deflationary asset over the long term.
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