Ethereum's Becoming Inflationary Again
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According to CryptoQuant, Ethereum has turned inflationary again due to the Dencun upgrade (March 13) that promised to cut fees by over 90% across L2s.
Currently, Ethereum fees are up to 4 times lower than prior to the upgrade, but the upgrade's mechanics apparently worked too well.
Dencun has also cut the Ethereum issuance rate by 90%.
Such low fees are making the circulating Ethereum tokens burn (based on the schedule) at the lowest rate since the 2022 Merge. This is making Ethereum inflationary again.
CryptoQuant analysts said in their weekly report that Ethereum may not be deflationary again, and that it's "ultrasound money" status has probably died, at least for now.
Until Dencun, burned Ethereum transaction fees were positively correlated with network activity.
The current inflation rate of Ethereum is 0.57% / year, according to ultrasound.money
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