According to a report by “The Block,” analysts from blockchain data analytics company CryptoQuant state that the Dencun upgrade on the Ethereum blockchain has caused Ethereum (ETH) to experience inflation again, potentially stifling its characteristics as “ultra-sound” money.
In a report released on Wednesday (8th), CryptoQuant stated that due to the decrease in transaction fees on the Ethereum network following the Dencun upgrade completed on March 13th, the burn rate of ETH has dropped to one of the lowest levels since the merge upgrade. The report also points out that the supply of ETH is growing daily at the fastest rate since the network merge.
Source: CryptoQuant
Analysts from CryptoQuant state that, based on the current network activity, Ethereum will not experience deflation again, and the narrative of Ethereum as “ultra-sound” money may have disappeared or requires higher network activity to revive.
Source: ultra sound money
According to the introduction on the Ethereum data website ultra sound money, “ultra-sound money” is a meme in Ethereum that primarily focuses on the possibility of a decrease in ETH supply. This meme originated from Ethereum co-founder Vitalik Buterin, who jokingly mentioned the term “supersonic money” when discussing currencies with negative growth in circulation in 2020. Later, Ethereum researcher Justin Drake extended it to “ultra-sound money” when describing the supply changes of Bitcoin and Ethereum.
