The post Massive ETH Supply Surge: How the Dencun Upgrade is Changing the Game appeared first on Coinpedia Fintech News
Ether has experienced a significant increase in supply since mid-April 2024, with over 112,000 ETH added to the market. This notable inflation is largely due to the recent Dencun upgrade, marking a crucial development in Ethereum’s supply dynamics.
Read on to know what this development means for cryptocurrency investors.
Ethereum’s Dencun Upgrade and Its Impact
The Dencun upgrade, implemented on March 13, introduced nine Ethereum improvement Proposals, including the pivotal EIP-4844. This proposal introduced, ‘blobs,’ a mechanism that temporarily stores transaction data separately, thereby reducing fees for block data on Ethereum layer-2 networks. This innovation has streamlined transaction processes and cut costs significantly. Additionally, the upgrade brought proto-danksharding, enhancing data availability for block space on the Ethereum mainnet. This improvement has led to more efficient transactions on Ethereum layer-2 networks. However, this efficiency came at the cost of reduced ETH burning on the mainnet.
Current Ethereum Supply Trends
Despite the recent inflationary trend, the overall supply of ETH has decreased since Ethereum’s switch to a proof-of-stake consensus mechanism, in September 2022. Since then, more than 1.5 million ETH has been burned, while approximately 1.36 million ETH has been added to the supply. This results in a net reduction of 345,000 ETH, equivalent to over $1.1 billion at current prices.
As of June 26, 2024, the total supply of ETH stands significantly higher due to recent inflations. Notably, the supply of ETH has consistently increased since April, demonstrating the lasting impact of the Dencun upgrade.
Ether Supply Increase: What This Means for Crypto Investors
The recent increase in ETH supply offers a mixed bag for crypto investors. On one hand, reduced transaction costs on layer-2 networks could drive more usage and adoption. On the other hand, the inflationary pressure could impact ETH’s price dynamics.
The current price of ETH is $3,380.01. Over the past 30 days, it has decreased by 13.6%. In the last 7 days, it has dropped by 4.5%, but in the past 24 hours, it has raised by 0.8%. The 24-hour trading volume of ETH stands at $11,607,441,837.
In conclusion, Ethereum’s recent supply inflation, driven by the Dencun upgrade, underscores the evolving nature of the cryptocurrency market.
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