Ethereum’s “ultrasound money” pitch didn’t vanish because the network failed. It weakened because Ethereum got better at scaling, and cheaper scaling means less ETH gets burned.
- EIP-1559 and the Merge made ETH scarcer. Then rollups changed the math.
- Dencun cut L2 costs hard. That helped users and hurt burn.
- Fusaka added a fee floor. Useful, but not a rewind button.
- ETH now lives with a trade-off. More utility, less scarcity theater.
For a while, Ethereum had a neat little flex on its hands. EIP-1559, activated in August 2021, began burning part of every transaction fee. Then the Merge in 2022 cut new ETH issuance by roughly 90% when the network moved from proof-of-work to proof-of-stake. The pitch was simple: the more the network was used, the more ETH disappeared from circulation.
That was the “ultrasound money” thesis, Ethereum’s answer to Bitcoin’s “sound money” branding. The idea was that burn would outpace issuance often enough to make ETH supply shrink over time. For a stretch, that was not just marketing fluff. After the Merge, ETH supply did briefly fall, and burn outpaced issuance.
Then Ethereum did what blockchains are supposed to do: it scaled.
The March 2024 Dencun upgrade introduced EIP-4844 and blob transactions for rollups. In plain English, blobs are a cheaper data lane for layer-2 networks like Arbitrum, Optimism, and Base to post compressed data back to Ethereum. That made rollup activity much less expensive, which was great for users and throughput, and a lot less great for ETH burn.
That’s the catch. Ethereum’s burn is demand-responsive, not magical. It only cuts supply in a meaningful way when demand lands on the layer that burns. Once activity shifted to rollups, the burn got kneecapped. The network worked. The scarcity story, at least in its old form, did not survive the upgrade.
This was not some hidden sabotage job. Nobody flipped a clownishly evil switch. It is just the economics of a chain that increasingly wants to be a settlement layer, not a place where every cheap transaction has to fight for space on L1. If the chain gets better at handling activity elsewhere, the base layer earns less from that activity. Physics remains rude.
Did L2s break Ethereums ultrasound money? Galaxy Research has shown how sharp that shift was. After Dencun, Ethereum’s total revenue fell to 69% below the pre-upgrade rolling average, and ETH burned was 84% below the pre-upgrade rolling average. That is not a minor wobble. It looks like a structural change in how Ethereum monetizes usage.
The source material also points to daily ETH burn falling from thousands of ETH to as low as 50 to 70 ETH after Dencun, while Ethereum’s issuance was running around 1, 700 ETH per day. The exact numbers will move around with network conditions, but the direction is what matters. In quieter periods, Ethereum is back in mild inflation rather than the deflationary spell some ETH holders got very attached to.
That also explains why the old meme started sounding shakier. Bitcoin’s supply is fixed and predictable. Ethereum’s is responsive to usage. That makes ETH more flexible, but it also makes its monetary profile much more dependent on where activity happens. Bitcoin is fixed scarcity. Ethereum is elastic scarcity. Those are different bets, no matter how many glossy charts try to blur the line.
And yes, the contrast matters. Bitcoin’s inflation rate is commonly discussed at roughly 0.8% annually on its fixed schedule, while Ethereum’s net supply change can swing with burn, staking, and usage. In calmer periods, the material here puts Ethereum’s net inflation somewhere around 0.2% to 0.8% depending on the period. That does not make ETH “better than Bitcoin” on scarcity. It means ETH’s supply math is more conditional and less pristine.
That is the part a lot of crypto commentary still fumbles. Ethereum did not become “broken.” It became more useful in the way its roadmap intended, and that utility came with a tokenomics bill attached. Cheap rollups lower the amount of ETH burned. Cheap rollups also make Ethereum more viable as the base layer for stablecoins, DeFi, tokenization, and the broader settlement stack. You do not get to keep the upside of both worlds without paying somewhere.
There is also a real scaling story here, not just a token one. Ethereum has steadily moved toward becoming a settlement and security layer, while execution shifts to rollups. That architecture lets the ecosystem scale without forcing every user to pay L1 prices. It is a win for adoption. It is also exactly why the “ultrasound money” setup got weaker. For a live dashboard of Ethereum Transactions and Contracts Overview, you can watch the burn math change in real time.
That trade-off set the stage for Fusaka.
Fusaka was activated on December 3, 2025 and included EIP-7918: Blob base fee bounded by execution cost. The goal is straightforward: stop blob fees from falling too close to zero by tying the minimum blob fee to execution-layer costs. In practical terms, Ethereum is trying to keep rollup data pricing from getting absurdly cheap and leaving the base layer with all the economic dignity of a vending machine in a ghost town.
The Fusaka Upgrade: Scaling Meets Value Accrual modeled the change and said that if EIP-7918 had existed since blobs launched, it would have added about $78.6 million, or 24, 641 ETH, in cumulative blob-fee revenue. Fidelity also said the mechanism would have affected 93% of days since the 2024 Dencun upgrade. Blockworks added that if the mechanism had been introduced in June 2025, burned blob fees would have been nearly 8x higher.
That sounds bullish, and in a narrow sense it is. But it is not a resurrection. It is a floor, not a restoration. EIP-7918 can improve value capture at the margins, but it does not bring back the pre-Dencun burn regime where mainnet congestion did the heavy lifting for ETH scarcity. Ethereum is still deliberately pushing execution outward. That structural choice remains.
So what does the fix actually do?
It makes ETH slightly better monetized when blob fees get too cheap. It gives the base layer a bit more pricing power. It does not magically force the network back into the old burn-heavy state. If anything, it is a sign that Ethereum governance understands the problem: scaling is good, but if you make data too cheap, you starve the fee market that once made ETH look like a deflationary asset.
That leaves Ethereum holders with a much less romantic reality.
ETH is not dead. It is not broken. But it is also not the perpetual deflation machine that some of the louder “ultrasound money” memes suggested. The cleaner reading is that Ethereum sacrificed some of its scarcity narrative to get real scalability. That is a design choice, not a failure. Still, it means the token now has to stand on more than burn alone.
And that may be the more honest bull case anyway.
Ethereum’s All Core Devs Meeting #148 Unveils Pectra and made it clear that the roadmap was headed this way: more throughput, more rollup support, and more attention on economic tuning rather than magical thinking. That is grown-up protocol design, even if it annoys the maxis who still want their chain to do everything, emit scarcity, and make coffee in the morning.
Ethereum’s most important use cases, stablecoins, DeFi, tokenization, and settlement for a growing rollup economy, benefit from low fees and high throughput. If the chain becomes too expensive, users leave. If it becomes too cheap, ETH burn weakens. That is the knife edge Ethereum now lives on. Utility on one side, monetary narrative on the other.
The next question is whether the network can keep enough economic gravity on L1 to preserve meaningful fee capture without choking off the activity that makes Ethereum useful in the first place. That is a real balancing act, not a slogan-friendly one.
Bitcoin maxis will, naturally, say this proves ETH was never a serious hard-money asset. That is too neat, but not entirely wrong. Ethereum was always trying to do more: settlement, security, application infrastructure, and staking-backed monetary value capture. Bitcoin’s mission is simpler, stricter, and far more legible. Ethereum’s is messier, but also broader.
Ethereum’s Fusaka Upgrade: Scalability Breakthrough or is where the real debate sits now: is the network solving its long-term scaling problem, or is it quietly hollowing out the fee dynamics that once made ETH look like a unique monetary asset? The honest answer is probably “both, ” which is the kind of answer everyone hates until they realize it is the correct one.
Ethereum defenders have a fair counter: ETH does not need to imitate Bitcoin to matter. It can be valuable as the asset tied to a massive settlement and security layer, plus staking and fee capture across a giant onchain economy. Scarcity helps. Utility does the heavy lifting.
That is the real lesson here. The burn was never a law of nature. It was a side effect of network usage landing in the right place. Once Ethereum successfully pushed activity to cheaper layers, the scarcity narrative lost some of its shine. Not because the network failed. Because it succeeded.
Key takeaways
-
Did Ethereum’s “ultrasound money” thesis ever work?
Yes, for a period after EIP-1559 and the Merge. Burn outpaced issuance at times, and ETH supply briefly declined. But that setup depended on strong demand at the base layer. -
Why did Dencun matter so much?
Dencun introduced blobs through EIP-4844, making rollup data much cheaper. That shifted activity away from Ethereum’s burn-heavy L1 and sharply reduced ETH burn and fee revenue. -
Is ETH inflation back?
In calmer periods, yes, mildly. The material here puts net inflation around 0.2% to 0.8% depending on the period, which is a far cry from the deflationary narrative ETH once had. -
Does Fusaka fix the problem?
Not fully. EIP-7918 adds a blob fee floor and should improve value capture, but it is a partial mitigation, not a return to the old burn regime. -
What should ETH holders watch next?
Net supply and base-layer fee revenue. If activity keeps moving to rollups while burn stays weak, the ultrasound money narrative will keep losing force. -
Will Ethereum ever be deflationary again?
Possibly, but only during periods of heavier mainnet demand. The burn mechanism is still alive; it is just much more conditional than it was before rollups took over. -
Is low inflation bad for ETH?
Not necessarily. Ethereum’s value case is broader than supply changes, and staking, utility, and settlement demand all matter. Investors may still care a lot, though, because markets love a neat scarcity story. -
Is Bitcoin still the cleaner scarcity bet?
Yes. Bitcoin’s issuance is fixed and predictable. Ethereum’s supply changes with network usage, which gives it flexibility but makes its monetary profile less hard-edged.
The burn was hiding how different the two bets actually are.
That is the part worth remembering. Ethereum did not lose its future because burn faded. It lost a convenient slogan. The real question now is whether ETH can hold value through utility, settlement demand, and staking economics without pretending to be Bitcoin in a different outfit. That is a tougher, less memeable case, but also a more honest one.
Ethereum’s 110% Address Surge Post-Fusaka: Scalability Win is the kind of metric that looks great in a headline and still needs context. More addresses can mean more activity, or it can mean wallets, bots, and speculative churn. Crypto loves a vanity metric almost as much as it loves a roadmap diagram with six arrows and no accountability.
And if you are still nostalgic for the old meme, there is always I miss when ETH was ultrasound money. Is there any way to relive the glory days of burn-maximalism. The answer, sadly for the meme crowd, is probably no. Ethereum’s future looks less like a deflation cosplay act and more like a productive settlement layer with a token that has to earn its keep.
