TechFlow news, according to The Block, CryptoQuant analyst said the Dencun upgrade has made Ethereum inflationary again, potentially killing its "ultrasound money" narrative.
A report released by CryptoQuant on Wednesday stated that due to reduced transaction fees on the Ethereum network following the Dencun upgrade, the amount of ETH burned has dropped to one of the lowest levels since The Merge—the event marking Ethereum's transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. The report added that Ethereum's supply is now growing at the fastest rate since The Merge.
CryptoQuant analysts noted, "Prior to the Dencun upgrade, higher Ethereum network activity meant higher fee burn, resulting in lower ETH supply. However, after the Dencun upgrade, the total fee burn has decoupled from network activity."
The report concludes that at current levels of network activity, Ethereum is unlikely to become deflationary again, and the concept of ether as "ultrasound money" may already be dead—or would require significantly higher network activity to revive.
