Is Inflation Starting Again For Ethereum (Eth)

Since mid-April, Ethereum's (ETH) supply has been gradually increasing due to the London upgrade reducing competition for block space on the main network.

The new supply of Ethereum is experiencing its longest inflationary period since the Merge in 2022, with the March London upgrade to the blockchain appearing to be responsible for this trend.

According to Ultrasound.money, Ethereum supply has been gradually increasing, adding over 112,000 ETH to the total supply since April 14th.

Much of the inflationary activity can be attributed to the London upgrade implemented on March 13th. This upgrade introduced nine Ethereum Improvement Proposals (EIPs), including EIP-4844, which is seen as a primary driver of inflation.

EIP-4844 introduced "blobs" that allow transaction data to be separated and temporarily stored, reducing fees for block data on Ethereum layer 2 networks.

Additionally, the London upgrade introduced proto-danksharding on the Ethereum mainnet, enhancing data efficiency for block space.

These developments led to significant reductions in transaction costs on Ethereum layer 2 networks like Arbitrum and Optimism, contributing to a substantial decrease in total ETH burned on the main network.

While Ethereum supply has been inflationary in recent months, the total supply has still decreased significantly since The Merge.

Since September 2022, over 1.5 billion ETH has been burned, with 1.36 billion ETH added. This has resulted in a decrease of 345,000 ETH in total supply.

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