Ethereum’s inflation rate has risen to 0.74%, calling into question the “ultrasound money” narrative. According to Binance’s October 2024 Market Insights report, ETH issuance is at its highest level in two years.

- Decreased on-chain activity and low burn rates have changed the economics of the asset.

- Layer-2 solutions like Arbitrum and Optimism have reduced gas fees by reducing transactions on the Ethereum main chain.

- EIP 1559 burns a portion of transaction fees, but the reduced main chain transactions reduced the amount of ETH burned.

- A Binance spokesperson noted that the Dencun upgrade increased the adoption of low-fee L2 solutions.

- ETH issuance rate has moved away from Ethereum’s deflation target by exceeding burns.