Recent data indicates a significant decrease in Ethereum's gas fees, resulting in a record-low burn rate over the past year. According to ultrasound.money, this decline has pushed Ethereum into a slight inflationary state, with the average supply growth rate reaching 0.56% per annum over the past week. The drop in gas fees is attributed to the increased efficiency of the network's fee market, driven by the growing adoption of blob transactions and the shift to Layer 2 scaling solutions.

The Ethereum network has witnessed a substantial decrease in the daily amount of ETH burned, primarily due to the recent drop in average gas fees. Currently, gas fees range between 5 and 10 gwei, marking one of the lowest levels seen this year. This decline has resulted in fewer ETH being burned, with a record low of 610 ETH burned on Sunday. In comparison, the daily amount of ETH burned during the first four months of this year remained above 2,500-3,000 ETH.

The decrease in gas fees is partly attributed to the Dencun upgrade in March, which introduced blob transactions and increased transaction efficiency on Layer 2s. Additionally, the shift in activity to Layer 2 scaling solutions has contributed to the decline. While low fees benefit network users, the drop in ETH burn has impacted Ethereum's deflationary aspects. The London hard fork, implemented in August 2021, fundamentally altered Ethereum's fee structure, introducing a base fee that is burned and a priority fee that acts as a tip to validators.

The dynamics of gas fees and ETH burning are a closely watched aspect of Ethereum's economic model. The decrease in gas fees has resulted in fewer ETH being burned, leading to a slight inflationary state. However, if activity increases and more ETH is burned than issued, Ethereum will revert to a deflationary state. The current inflationary state is a result of the reduced burn rate, which has led to a supply growth rate of 0.49% over the past week, according to ultrasound.money.

The decline in gas fees has resulted in Ethereum experiencing a slight inflationary state, with a supply growth rate of 0.56% per annum. This development highlights the complex relationship between gas fees, ETH burning, and Ethereum's economic model. As the network continues to evolve, it is likely that we will see further fluctuations in gas fees and their impact on Ethereum's inflationary and deflationary states.