Analyst: ETH Inflation Stemming from the Dencun Upgrade, Blob Transaction Mechanism Weakening Burn Efficiency

BlockBeats News, February 5th, according to The Block, the ETH supply has reached 120,521,523 ETH, an increase of about 383 ETH compared to the merge in September 2022. Presto Research analyst Jaehyun Ha explained that this inflation is mainly due to the Dencun upgrade implemented in March 2024. The upgrade introduced a blob transaction mechanism using a separate fee unit, reducing the original ETH burn effect, which may impact Ethereum's deflationary properties as a "sound money".

DeSpread Research researcher Byoungjoon Kim pointed out that the recent meme coin craze has led to a large number of users and liquidity shifting to the Solana network. Coupled with the emergence of numerous Layer 2 solutions after the Dencun upgrade, this has also had an impact on the Ethereum ecosystem.

In previous news, the current circulation of ETH has exceeded the level before the Ethereum PoS merge.