Ethereum network has become inflationary at current rate of network activity
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Historically, the total amount of fees burned has been positively correlated with higher network activity or the total number of transactions. Before the Dencun upgrade, higher network activity resulted in higher fees burned and, thus, a lower ETH supply. However, the narrative changed after the Dencun upgrade as the overall amount of fees burnt decoupled from network activity.
As a result, the total amount of fees burned fell to its lowest point since the Merge Upgrade in September 2022, and the new supply of ETH turned positive again, increasing at the fastest daily rate since the Merge upgrade. Given that the new supply of ETH is now increasing at the quickest daily pace since the Merge, as fees burned have decreased, and at the present rate of network activity, the Ethereum network has become inflationary.Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.
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