In August 2021, Ethereum underwent a significant upgrade known as the London Hard Fork, which aimed to address various issues within the network, including its economic model. One of the key goals of this upgrade was to transition Ethereum from an inflationary to a deflationary asset, promising a reduction in the total supply of Ether (ETH) over time.

However, despite these intentions, recent data as of April 13, 2025, shows that Ethereum's net ETH supply has continued to grow, with an annual increase of 0.805% since the London Hard Fork. This means that 3,477,830.85 ETH have been added to circulation, highlighting the network's ongoing inflationary nature.

The failure to achieve the expected deflationary outcome has raised concerns and sparked discussions within the Ethereum community. Many had anticipated that the London Hard Fork would bring about a significant shift in the network's economics, leading to a reduction in the overall supply of ETH and potentially impacting its price dynamics.

The discrepancy between the initial promises of deflation and the current reality of inflation has prompted scrutiny of Ethereum's protocol and governance mechanisms. Some community members have questioned the effectiveness of the London Hard Fork in achieving its intended objectives and have called for further analysis and potential adjustments to the network's parameters.

Despite the challenges in achieving a deflationary outcome, Ethereum continues to be a dominant force in the blockchain and cryptocurrency space. Its smart contract capabilities, decentralized applications, and vibrant ecosystem have solidified its position as a leading platform for DeFi, NFTs, and other innovative use cases.

Moving forward, the Ethereum community is likely to continue exploring ways to address the issue of supply growth and potentially reevaluate the network's economic model. This could involve further upgrades, protocol changes, or community-led initiatives aimed at aligning Ethereum's economic incentives with its long-term goals.

As the cryptocurrency landscape evolves and matures, the importance of economic sustainability and stability becomes increasingly crucial. Ethereum's ongoing journey towards achieving a balance between inflation and deflation underscores the complex nature of blockchain economics and the challenges involved in maintaining a healthy and robust network.

In conclusion, while Ethereum's London Hard Fork was a significant milestone in the network's development, the continued inflationary trend post-upgrade highlights the need for ongoing analysis, adaptation, and collaboration within the Ethereum community to navigate the complexities of blockchain economics and strive towards a more sustainable future.

Source: https://news.bitcoin.com/4-5m-eth-burned-yet-supply-grows-ethereums-deflation-dilemma/