Conor Grogan: User operational errors have resulted in over $3.4 billion in ETH permanently lost
According to the latest analysis report by Conor Grogan, Director of Product at Coinbase, the Ethereum ecosystem has permanently lost over 910,000 ETH (approximately $3.4 billion) due to operational errors and contract mistakes, accounting for 0.76% of the circulating supply. This statistic only includes verifiable on-chain losses, and the actual losses may be greater, as cases such as lost private keys and long-idle wallets have not been accounted for.
Among the numerous loss incidents, the most notable is the 306,276 ETH that was permanently frozen due to the Parity multi-signature wallet vulnerability in 2017; another case involved the untimely death of the CEO of the now-defunct Canadian exchange QuadrigaCX, leading to a loss of over 60,000 ETH;
as well as the 11,500 ETH destroyed due to a minting error in the 2022 Akutars NFT project. Additionally, user errors have led to over 25,000 ETH being directly sent to burn addresses, which also permanently removed these assets from market circulation.
Grogan particularly emphasized that the $3.4 billion loss estimate is extremely conservative; if we include the 5.3 million ETH (valued at approximately $23.4 billion) destroyed after the EIP-1559 upgrade, the total loss in Ethereum has reached 6.2 million ETH, accounting for 5% of the total supply.
These losses expose the systemic risks in cryptocurrency regarding private key management and contract security. Additionally, a report from CertiK indicates that in the first half of 2025, the cryptocurrency sector lost $2.47 billion due to security incidents, with Ethereum accounting for the largest share (175 incidents, $1.63 billion stolen). The main attack methods were wallet intrusions (34 incidents / $1.7 billion) and phishing (132 incidents / $410 million).
Despite the heavy losses, Ethereum's supply tightening has become a price support factor. After the Merge, the issuance of ETH significantly decreased, along with the ongoing destruction mechanism of EIP-1559, resulting in a slight drop in circulating supply from 120.5 million in 2022 to the current 120.7 million. This deflationary characteristic, combined with continuous inflow of institutional funds, has driven ETH prices up by 57.6% recently, briefly surpassing $3,800.
In the report, Grogan warned that the $3.4 billion is just the tip of the iceberg, and the industry needs a more robust error prevention mechanism. With the implementation of the GENIUS Act and the improvement of regulatory frameworks, the Ethereum ecosystem may enter a safer development phase, but how to balance technological innovation with user protection remains a long-term challenge for the industry.
