Cryptocurrencies

Ethereum (ETH) Becomes Inflationary Once More Following Dencun Upgrade, Research Shows

The recent Dencun upgrade has altered Ethereum’s economic dynamics, shifting towards an inflationary model by reducing the amount of ETH burned through fees. Despite high activity on the network, transaction fees have significantly decreased post-Dencun upgrade, leading to a decrease in ETH burning and an increase in the total supply of the cryptocurrency.

According to a recent report from CryptoQuant, Ethereum, previously seen as “ultra-safe money,” has seen a shift in its narrative due to the Dencun update. The upgrade has challenged the deflationary trend in Ethereum’s economic model, with less ETH being burned and lower transaction fees even during times of heightened network activity.

The community now faces the challenge of balancing operational efficiency with the vision of Ethereum as “ultra-secure money.” The decrease in fees, while beneficial for users and network accessibility, has transformed the underlying economic structure of Ethereum. To restore Ethereum’s status as “ultra-safe money,” a thorough review of fee policies and increased network activity will be necessary to maintain a balance between efficiency and long-term economic sustainability.

(Source: CryptoChronicle.xyz)

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