According to a report from crypto data analytics firm IntoTheBlock, Ethereum is entering a new phase characterized by decreased network revenue generated from fees, which challenges the deflationary supply narrative surrounding its native token, ether. Data from IntoTheBlock indicates that the income derived from network fees on the Ethereum blockchain has dropped to its lowest level since April 2020, representing a significant decline of 90% from its peak in May. In the past, Ethereum users criticized the high transaction costs, or gas fees, and the network congestion caused by the surge in non-fungible token trading and decentralized finance yield farming activities during the bullish market. However, as the prices of cryptocurrencies plummeted and the demand for NFTs and DeFi decreased, those issues have subsided. Another contributing factor to the decrease in fees is the rise of layer 2 solutions, aimed at improving Ethereum's scalability and capacity. While this may benefit Ethereum users by reducing transaction costs, it has an impact on the inflationary supply of ETH, as fewer tokens are being burned compared to new issuance. As demonstrated by recent data, the supply of ETH has increased by 33,500 ETH, equivalent to approximately $52 million, over the past 30 days due to low blockchain activity. IntoTheBlock expects network fee revenue to remain low as speculative activity diminishes and users continue to shift towards layer 2 solutions. Notably, NFT trading, which was previously responsible for a significant portion of token burn, only accounted for 8% of it recently.