According to ChainCatcher, Blockworks reported that Ethereum is experiencing the longest inflation period in history. Since mid-April, the circulating supply of ETH has increased for 72 consecutive days, increasing by nearly 50,000 ETH (about 168.7 million US dollars). Although Ethereum holders usually benefit from the net supply destruction brought about by the increase in supply scarcity, the opposite is currently the case - Ethereum is becoming less scarce, and the base fee is at a low point in the past two years.
Despite the increase in the number of transactions on the Ethereum mainnet and the explosive growth of Layer-2 activity, the base fee has dropped by 90% due to the reduction in competition after the Dencun update, which reserved "blobs" of transaction space for the Layer-2 network in each block. The current reward per block is slightly more than 2 ETH (about $6,800), and the fee contribution is less than 2.5%.
Since the merger in September 2022, Ethereum has been in inflation for a long time only in a few cases, the longest being 40 days shortly after the hard fork and 30 days at the end of last year. Since the merger, Ethereum has burned 1.71 million ETH (about $5.8 billion), issued 1.36 million ETH (about $4.46 billion), and reduced 346,000 ETH (about $1.17 billion), with an annual deflation rate of 0.161%. If the proof-of-work mechanism is still used, the supply will increase by 6.76 million ETH (about $22.87 billion), with an annual inflation rate of more than 3%.
