Ethereum's recent increase in supply has caused concern within the cryptocurrency community, as more than $47 million worth of Ether (ETH) tokens have been added to circulation over the past 30 days.

This development has surprised many Ethereum supporters who anticipated that the transition to proof-of-stake (PoS) last year would turn ETH into a deflationary asset.

The surge in supply can be attributed to the decrease in transaction activity on the Ethereum network. Reduced NFT trades and decreased decentralized finance (DeFi) activity have resulted in fewer ETH tokens being burned. Ethereum's fee-burning mechanism dictates that higher network activity leads to increased gas prices, resulting in more ETH being permanently removed from circulation.

However, the recent drop in gas fees, with the average network transaction costing just $0.24, has led to a reduction in the amount of ETH being burned, contributing to the supply surge.

Despite concerns in the crypto community regarding Ethereum's inflationary trend, Ethereum core developers appear to be unperturbed.

Micah Zoltu, an Ethereum core developer, played down the significance of this development, describing it as "insignificant" in the grand scheme of things in an interview with crypto news outlet Decrypt.

Similarly, Danno Ferrin, another Ethereum core developer, pointed out that Ethereum's short-term inflation remains lower than that of other blockchain networks and the broader economy. He noted that Ethereum's current inflation rate is still below its all-time high supply and significantly lower than that of other chains.

As a point of comparison, new BTC issuance on the Bitcoin network is halved every four years, and the BTC annual inflation rate stands at approximately 1.8%. In contrast, the general economy in the US had an inflation rate (CPI) of 3.7% annually as of last month.

Regardless of these perspectives, the change in supply dynamics raises questions about Ethereum's long-term financial health and its ability to meet the expectations of becoming a deflationary asset