🌋 Has ETH Lost Its "Ultrasound Money" Status?
posted 10 May 2024
The term "ultrasound money" refers to a currency that resists inflation and maintains its long-term purchasing power.
Ethereum claimed this title when it adopted the PoS algorithm in September 2022, turning ETH into a deflationary asset due to bustling blockchain activity.
However, things took a turn after the Dencun upgrade, as CryptoQuant analysts point out. The upgrade brought down transaction fees on L2 networks, leading to a drop in the amount of ETH burned.
Ethereum Total Supply and Fees Burned Source: CryptoQuant.com
For Ethereum to restore its "ultrasound money" status, network activity needs a boost. Until then, ETH's supply is slowly creeping up, though not dramatically.
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