Ethereum is experiencing its longest inflationary period since the updates in 2022. The London upgrade in March may play a decisive role in the increase in Ethereum’s supply. According to the Ultrasoundmoney dashboard, Ether supply is gradually increasing, with over 112,000 ETH added to the total supply since April 14th.

Most of the inflationary developments may be attributed to the London upgrade on March 13th. This upgrade brought nine proposals including EIP-4844 among Ethereum Improvement Proposals (EIP). EIP-4844 introduced blobs, a mechanism that allows transaction data to be stored separately and temporarily, and reduced fees paid for block data on ETH layer-2 networks.

Importance and Effects of Ethereum Updates

In addition, the London upgrade introduced proto-danksharding aiming for more efficient data usage in block space on the Ethereum mainnet. This led to a significant decrease in transaction costs on Ethereum layer-2 networks like Arbitrum and Optimism, while the total amount of ETH burned on the mainnet also decreased significantly.

Although the recent increase in ETH supply has led to inflation, the total Ether supply has decreased significantly since the Ethereum Merge. Since September 2022, over 1.5 billion ETH has been burned, while 1.36 billion ETH has been minted. This has resulted in a decrease of 345,000 ETH in total supply, and the tangible value of the supply contraction due to the transition to Proof-of-Stake is currently at the $1.1 billion level.

These developments in Ethereum, especially in conjunction with advancements in spot ETFs, will affect the price structure in the medium and long term. Altcoin investors should closely monitor the situation of ETH and carefully evaluate the developments during this process.