The Ethereum blockchain has entered a notable phase of inflation, marking its longest since the Merge in 2022, largely attributable to the Dencun upgrade in March. According to data from ultrasound.money, over 112,000 new Ether (ETH) have been minted since April 14, contributing significantly to the total supply.
The Dencun upgrade, implemented on March 13, ushered in nine Ethereum Improvement Proposals (EIPs), prominently featuring EIP-4844. This particular proposal introduced “blobs,” a mechanism designed to segregate and temporarily store transaction data, thereby reducing block data fees on Ethereum’s layer-2 networks.
Moreover, Dencun introduced proto-danksharding, enhancing data availability efficiency within the Ethereum mainnet’s block space. This development notably lowered transaction execution costs on layer-2 networks like Arbitrum and Optimism, albeit leading to a substantial decrease in ETH burned on the mainnet.
Despite the recent inflationary trend in ETH supply, the overall supply has seen a significant reduction since the Merge. Notably, over 1.5 billion ETH has been burned since September 2022, compared to the addition of 1.36 billion ETH, resulting in a net decrease of 345,000 ETH—equivalent to approximately $1.1 billion at current market prices—since Ethereum transitioned to a proof-of-stake consensus mechanism.
This progression underscores Ethereum’s dynamic evolution amid ongoing upgrades and adjustments, influencing both its supply dynamics and broader blockchain ecosystem.