After a year and a half of proudly displaying its status as an “ultrasound” crypto, the Dencun update has just relaunched the issuance of ether on the Ethereum blockchain. A first since The Merge of September 2022 which made Ethereum a deflationary crypto. If this resounding turnaround revives questions, many experts see it as a new milestone in the quest for mass adoption.
Circumstances of the reversal of the crypto ethereum
Since the implementation of Dencun, the supply of ETH has increased very slightly, inflating for the first time the total supply of ether since March 2023. A major inflection which puts an end to 18 months of monetary recession for the crypto ethereum. The latter has until now destroyed part of its units by burning transaction fees.
The driving force behind the shift is the reduction in transaction fees implemented by Dencun. By making ETH transfers up to 4 times less expensive, this upgrade mechanically reduced the amount of Ethereum crypto, thereby boosting overall net issuance. No more “ultrasound money”, would we signal the end of strong value status for ETH?
Towards a useful trivialization?
For many specialists, it is nonsense to bring Ethereum closer to bitcoin in the race for sound money. The strength of the network created by Vitalik Buterin does not lie in scarcity but in its decentralized application capabilities, they judge. “Ethereum is an unparalleled infrastructure for DApps. It would be misguided to compare it to the narrative of bitcoin as hard money,” slice like this Ki Young Ju, the respected founder of Cryptoquant.
Ki Young Ju is not alone in holding this view. Many experts agree that Ethereum has emancipated itself from its initial status as a simple crypto. Perceived more and more as an immense application web for web3, its potential for massive adoption by users and businesses will dictate its value, much more than an artificial monetary scarcity we think.
Whatever the opinion held, the change in Ethereum's monetary regime marks a new crucial step in the advent of the blockchain. This new turnaround only confirms a trajectory dedicated to challenging established codes in the crypto space. Ethereum seems decidedly designed to confuse.
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