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 <p class="paragraph">Ethereum’s (ETH) circulating supply has increased by over 37,000 ETH in the last 30 days following the Dencun <a rel="noopener noreferrer nofollow" title="upgrade" href="https://thebittimes.com/tag/upgrade.html">upgrade</a>. This resulted in a 0.38% monthly <a rel="noopener noreferrer nofollow" title="inflation" href="https://thebittimes.com/tag/inflation.html">inflation</a> for the leading Web3 network, which has been deflationary since January 2023.</p>
 <p class="paragraph">The Ethereum network activated the Dencun <a rel="noopener noreferrer nofollow" title="upgrade" href="https://thebittimes.com/tag/upgrade.html">upgrade</a> on March 13, 2024, with the EIP-4844. Dencun significantly reduces transaction costs on Ethereum’s Layer-2 through “proto-danksharding.”</p>
 <p class="paragraph">Notably, this enhancement makes Ethereum more efficient and cost-effective for users, marking a major step forward in ETH’s adoption. Conversely, it also diminishes the burned amount of the supply from the gas fees, which had made Ethereum deflationary.</p>
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 <p class="paragraph">In particular, the <em>UltraSoundMoney</em> platform shows 37,789.04 ETH added to its circulating supply in the last 30 days. This results from 75,013.39 ETH issued as staking rewards versus 37,224.25 ETH burned.</p>
 <figure class="wp-block-image size-large"><img decoding="async" width="1024" height="332" src="https://cdn.thebittimes.com/images/2024/05/10/f0ec66a9bfe9fd6aac52dfdb15ea625b.webp" alt class="wp-image-175145" srcset="https://cdn.thebittimes.com/images/2024/05/10/f0ec66a9bfe9fd6aac52dfdb15ea625b.webp 1024w, https://cdn.thebittimes.com/images/2024/05/10/f0ec66a9bfe9fd6aac52dfdb15ea625b.webp 300w, https://cdn.thebittimes.com/images/2024/05/10/f0ec66a9bfe9fd6aac52dfdb15ea625b.webp 768w, https://cdn.thebittimes.com/images/2024/05/10/f0ec66a9bfe9fd6aac52dfdb15ea625b.webp 1536w, https://cdn.thebittimes.com/images/2024/05/10/f0ec66a9bfe9fd6aac52dfdb15ea625b.webp 2048w" sizes="(max-width: 1024px) 100vw, 1024px">
  <figcaption class="wp-element-caption">
   ETH supply change, 30 days. Source: <em>UltraSoundMoney</em>
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 </figure>
 <h2 class="wp-block-heading" id="h-ethereum-ultra-sound-money-nbsp">Ethereum: Ultra sound money&nbsp;</h2>
 <p class="paragraph">The “ultra sound money” meme surged after “The Merge” <a rel="noopener noreferrer nofollow" title="upgrade" href="https://thebittimes.com/tag/upgrade.html">upgrade</a>, summed with the fee-burn mechanism the EIP-1559 implemented in 2021.</p>
 <p class="paragraph">Essentially, investors expected ETH’s circulating supply to be deflationary if the amount burned in fees surpassed the issued amount. The expectations were fulfilled in the past two years as this mechanism removed over 417,000 ETH from circulation since the Merge, for a 0.21% yearly supply deflation.</p>
 <figure class="wp-block-image size-large"><img decoding="async" width="1024" height="333" src="https://cdn.thebittimes.com/images/2024/05/10/8efcc6d587059c8f47c7419a7a76e647.webp" alt class="wp-image-175146" srcset="https://cdn.thebittimes.com/images/2024/05/10/8efcc6d587059c8f47c7419a7a76e647.webp 1024w, https://cdn.thebittimes.com/images/2024/05/10/8efcc6d587059c8f47c7419a7a76e647.webp 300w, https://cdn.thebittimes.com/images/2024/05/10/8efcc6d587059c8f47c7419a7a76e647.webp 768w, https://cdn.thebittimes.com/images/2024/05/10/8efcc6d587059c8f47c7419a7a76e647.webp 1536w, https://cdn.thebittimes.com/images/2024/05/10/8efcc6d587059c8f47c7419a7a76e647.webp 2048w" sizes="(max-width: 1024px) 100vw, 1024px">
  <figcaption class="wp-element-caption">
   ETH supply change, 603 days. Source: <em>UltraSoundMoney</em>
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 </figure>
 <h2 class="wp-block-heading" id="dencun-upgrade-is-this-the-death-of-ultra-sound-money">Dencun upgrade: Is this the death of “Ultra Sound Money”?</h2>
 <p class="paragraph">On that note, <em>CryptoQuant</em> analyzed the effects of the Dencun <a rel="noopener noreferrer nofollow" title="upgrade" href="https://thebittimes.com/tag/upgrade.html">upgrade</a> on Ethereum’s “ultra sound money” attribute. According to the analyst, median transaction fees were positively correlated with network activity before the Dencun <a rel="noopener noreferrer nofollow" title="upgrade" href="https://thebittimes.com/tag/upgrade.html">upgrade</a>.</p>
 <p class="paragraph">However, the median transaction fees have gradually diminished since the EIP-4844 implementation.</p>
 <figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="567" src="https://cdn.thebittimes.com/images/2024/05/10/19b942c6e1edace88736cde9f7288943.webp" alt class="wp-image-175147" srcset="https://cdn.thebittimes.com/images/2024/05/10/19b942c6e1edace88736cde9f7288943.webp 1024w, https://cdn.thebittimes.com/images/2024/05/10/19b942c6e1edace88736cde9f7288943.webp 300w, https://cdn.thebittimes.com/images/2024/05/10/19b942c6e1edace88736cde9f7288943.webp 768w, https://cdn.thebittimes.com/images/2024/05/10/19b942c6e1edace88736cde9f7288943.webp 1448w" sizes="(max-width: 1024px) 100vw, 1024px">
  <figcaption class="wp-element-caption">
   Ethereum: Total Transactions and Median Transaction Fee. Source: <em>CryptoQuant</em>
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  <p class="paragraph">“Dencun upgrade has decoupled #Ethereum’s transaction fees from network activity, reducing the burn rate even with high activity. This leads to lower user fees but challenges the deflationary mechanism set by The Merge, requiring significantly increased network activity to maintain deflation.”</p> <cite>– <em>CryptoQuant</em></cite>
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  <p class="paragraph">Nevertheless, it is still soon for the market to determine if Ethereum will again become an inflationary cryptocurrency. Investors are closely watching further developments and ETH’s economic data. On the other hand, lower fees per transaction could increase the demand for the network, increasing its overall value.</p>
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/ethereum-dencun-upgrade-turns-eth-inflationary-again-tbt87983.html">https://thebittimes.com/ethereum-dencun-upgrade-turns-eth-inflationary-again-tbt87983.html</a></p>

Ethereum Dencun upgrade turns ETH inflationary again

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