Ethereum's Dencun upgrade is making ETH inflationary again: CryptoQuant

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New supply of ether is growing at its fastest daily rate since the Merge as fees burned have plummeted after the Dencun upgrade.

The Dencun upgrade has made ether inflationary again, potentially killing its characteristic as “ultra-sound” money, analysts at data firm CryptoQuant said.

"Before the Dencun upgrade, the higher network activity on Ethereum meant higher fees burned and hence less ether supply. However, after the Dencun upgrade, the total amount of fees burned has decoupled from the network activity," CryptoQuant analysts said. Ethereum's Dencun upgrade is making ether inflationary again, according to a new report. Image: CryptoQuant.Ethereum's Dencun upgrade was implemented on March 13, 2024. The upgrade enables storing additional data in "blobs" on the Ethereum network, thereby enhancing efficiency and reducing the costs associated with Layer 2 transactions.

 

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