According to BlockBeats, the Dencun upgrade has led to an inflation in Ethereum, which could potentially disrupt its characteristics as an 'ultra-sound' currency. Analysts from CryptoQuant have stated that the transaction fees on the Ethereum network have decreased due to the Dencun upgrade, leading to a reduction in the amount of Ethereum being burned. This has resulted in one of the lowest levels of Ethereum destruction since the Merge.
The Merge refers to the process where Ethereum transitioned from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS) consensus mechanism. The report further added that the supply of Ethereum is growing at the fastest rate since the Ethereum network Merge.
Before the Dencun upgrade, higher network activity on Ethereum meant higher destruction fees, leading to a lesser supply of Ethereum. However, post the Dencun upgrade, the total destruction fees have become independent of the network activity, as stated by the CryptoQuant analysts.
