Following Ethereum’s long-awaited Dencun upgrade that went live two months ago, the Ether supply is no longer deflationary.
According to CryptoQuant data, the total Ether supply increased from 120 million on March 12 to 120.1 million on May 7, after the Dencun upgrade was implemented on the mainnet.
While this may seem like a small increase, it marks the first time since September 2022 that the supply has become inflationary, due to the highly anticipated Merge that transitioned Ethereum to its current proof-of-stake consensus model.
However, the loss of its deflationary status is not a major concern for the Ethereum network, as its main strengths lie in its decentralized applications (dApps), according to Ki Young Ju, founder and CEO of Cryptoquant.
In a May 9 post, he stated:
“After the Dencun upgrade, Ether is no longer inflationary due to reduced fees, deviating from its ‘ultrasound money’ status. Ethereum’s value lies in its DApps, so it is more sensible to not compare it to Bitcoin’s narrative of being sound money.”
