The supply of Ethereum (ETH) has continuously increased since mid-April, and it appears the Dencun upgrade in March may have been the cause.
Ethereum data dashboard ultrasound.money indicates that the supply of Ether has progressively increased, with an increase of over 112,000 ETH to the overall supply since April 14.
Implementing the Dencun enhancement on March 13 is responsible for a significant portion of this inflationary activity. This upgrade introduced nine Ethereum improvement proposals (EIPs), including EIP-4844, the primary cause of the escalation.
EIP-4844 introduced “blobs,” a mechanism that enables the temporary storage of transaction data separate from block data on Ethereum layer-2 networks, thereby reducing the fees paid for block data.
Furthermore, Dencun implemented proto-dank sharding, achieving more effective data availability for block space on the Ethereum mainnet.
Although this resulted in a substantial decrease in the cost of executing transactions on Ethereum layer-2 networks, including Optimism and Abritrum, the total quantity of ETH burned on the mainnet has decreased substantially.
The total supply of ETH has still decreased substantially since the Merge, although the ETH supply has flipped inflationary in recent months.
Since September 2022, over 1.5 billion ETH have been destroyed, while 1.36 billion ETH have been added, resulting in a total supply reduction of 345,000 ETH. This reduction is equivalent to just over $1.1 billion at current prices as Ethereum transitioned to a proof-of-stake consensus mechanism.
