CryptoQuant Analyst: Dencun Upgrade Causes Ethereum

CryptoQuant analysts stated that the Dencun upgrade has caused Ethereum to inflate again, potentially undermining its characteristics as an ultra-sound currency. A report released by CryptoQuant on Wednesday said that due to the reduction in transaction fees on the Ethereum network caused by the Dencun upgrade, the amount of Ethereum burned has dropped to one of its lowest levels since Merge. Merge refers to the process where Ethereum transitions from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) consensus mechanism. The report added that Ethereum's supply is growing at its fastest rate since Merge on the Ethereum network. CryptoQuant analysts said that before the Dencun upgrade, higher network activity in Ethereum meant higher costs for burning, thus less supply of Ethereum. However, after the Dencun upgrade, total burn costs have decoupled from network activity.