The active addresses of Ethereum have fallen sharply since the beginning of the year and fall from around 525k to around 333k. This decrease coincided with a weakening price trend, which at the time of the press stabilizes almost $ 1.8k.
The persistent decrease in the activity indicates a remarkable reduction in user involvement and transaction volume in the network.
Source: Cryptuquant
Recent data also reveals a strong reduction in Ethereum’s total reimbursements, which reflects the downward trend in active addresses and suggests a reduced activity on the chains.
Lower branding percentages can indicate less network congestion or fewer transactions with high priority, which strengthens reduced use and the network momentum.
Inflation by design?
The Dencun upgrade of Ethereum was announced as a step towards sustainability in the long term network. However, the aftergrade aftergrade has fueled debates because the total stock of Ethereum has risen.
The data emphasizes a stark contrast between the deflatory period before the Merge characterized by a falling stock and the inflatoire trend after the earlier.
Source: Cryptuquant
The merger initially brought optimism with its deflotional benefits, which reduces the issue percentage of Ethereum and the burning of more tokens than was created than was created.
After the Dencun upgrade, however, the fire mechanism has difficulty preventing inflation as a result of decreasing transaction volumes and lower network activity. With fewer reimbursements that are burned, the network has returned to the inflationary area.
Although the upgrade was aimed at strengthening the resilience of Ethereum, it inadvertently aggravated inflation during a period of reduced activity on the chain.
This shift has incorrectly aligned the reality of Ethereum after the Merge reality with its original deflatory vision, which makes doubts about the long-term effectiveness of the fire mechanism.
It remains uncertain or future updates, such as the Pectra -upgrade planned for 30 April, to achieve a better balance between sustainability and inflation control.
