Ethereum won plaudits and the spotlight two weeks ago for smoothly pushing through its much-hyped Merge, a historic shift to a different “proof-of-stake” blockchain system designed to drastically reduce energy consumption – roughly 99% by some estimates.

Now, the second-biggest blockchain appears to be proving itself on another promise of the Merge: greater inflation-resistance, a characteristic that’s usually more closely associated with Ethereum’s bigger and better-known rival, Bitcoin.

In the days since the Merge, the annualized net issuance rate of Ethereum’s native cryptocurrency, ether (ETH), has fallen to a range of 0% to 0.7%, estimates Lucas Outumuro, head of research at crypto data and analysis firm IntoTheBlock. That compares with about 3.5% prior to the Merge. The net issuance rate, also referred to as the inflation rate, is essentially the new supply divided by the existing supply.

The website Ultra Sound Money puts the annualized inflation rate at 0.19%, based on data showing that some 8,100 ETH have been added to ether’s total supply since the Merge.

In a world where central banks worldwide are struggling to contain inflation – in the face of trillions of dollars of money-printing and severe supply-chain bottlenecks – Ethereum’s reduced issuance rate might help to bolster its appeal among investor in crypto and traditional markets alike.

For comparison, Bitcoin’s net issuance rate is currently about 1.75%, according to Woobull.com. The Federal Reserve has doubled the size of its balance sheet since March 2020 to about $8.9 trillion.

“The level of new tokens coming onto the network has substantially reduced.” Simon Peters, a market analyst at the trading firm eToro, wrote in a note Monday.

The decline in Ethereum’s inflation rate comes from two factors: a reduction of new issuance as a result of the change in the underlying blockchain system, and a separate mechanism known as “EIP 1559” where fees paid for transactions on the network are “burned,” or eliminated from circulation.

Before the Merge, the issuance of ether’s proof-of-work (PoW) mining rewards was around 13,000 ETH per day, according to the Ethereum Foundation.

After the Merge, mining rewards disappeared, and staking rewards would theoretically amount to around 1,600 ETH per day – for a 90% drop in new issuance.

Typically, the amount ETH burned depends on the base fee adjusted by the crowdedness of the data blocks on a given day. When there are more transactions, there is a higher base fee.

For ETH to flip to actually becoming deflationary at the current pre-burn issuance rate, the base transaction fee would have to be at least 15 Gwei, according to Daniel Kostecki, senior market analyst at the investment company Conotoxia. The transaction fee was around 10 Gwei as of press time, according to Ultra Sound Money.