Ethereum’s Ultrasound Money Thesis Meets a Scaling Paradox

For a while, Ethereum had one of the strongest monetary narratives in crypto: the more the network was used, the scarcer ETH became. That was the promise behind "ultrasound money."
* EIP 1559 (2021) introduced fee burning, permanently removing the base fee from circulation.
* The 2022 Merge reduced ETH issuance by roughly 90%, allowing fee burns to outpace new issuance during periods of high activity.
* ETH became deflationary for much of the post Merge period, reinforcing the ultrasound money thesis.
* The March 2024 Dencun upgrade shifted activity to layer 2 rollups, dramatically reducing fees paid to Ethereum's base layer.
* Daily ETH burned fell from thousands of ETH to as little as 50–70 ETH, pushing supply growth back into mildly inflationary territory at roughly 0.2%–0.8% annually.
* The December 2025 Fusaka upgrade introduced EIP-7918, establishing a blob fee floor. Fidelity estimates it would have added approximately $78.6 million in additional fee burn across 93% of days since 2024.
* The fundamental challenge remains: as Ethereum becomes cheaper and more scalable, less ETH is burned, weakening the scarcity mechanism that underpinned the ultrasound money narrative.
Ethereum's biggest engineering achievement making the network faster and cheaper through layer 2 scaling also reduced the economic pressure that once made ETH consistently deflationary. The debate has shifted from whether Ethereum can scale to whether it can preserve a strong monetary premium while doing so
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