Ethereum (ETH), which is in the process of moving to Ethereum 2.0 and a Proof-of-Stake (PoS), consensus mechanism, might be upgraded to London on August 4. At that point, a variety of changes, including the highly anticipated Ethereum Improvement Proposal 1559, will take effect. This proposal seeks to overhaul the network’s monetary system.
suggested block 12,965,000 has been created by Ethereum core developers for mainnet activation of London’s network upgrade. They estimated that it would occur on August 4, (UTC)
EIP-1559 is one change to Ethereum that many are eagerly awaiting, even though it was previously met with opposition .
Why is this important? It will allow the user to set a tip and then burn the base fee. Some ETH supporters believe that the fee burning will make it a deflationary cryptoasset, and make it a serious store of value rival to Bitcoin (BTC).
It is important to remember that it is not clear when this shift might occur exactly. reported that this shift might not happen as quickly as people think. Ethereum will need to move fully to PoS before EIP-1559’s deflationary component kicks in. Others argue that token burns may not be able to keep up with inflation because there isn’t enough traffic to Ethereum.
Developer Ryan Berckmans stated recently that Ethereum won’t become deflationary immediately because proof of work mining will continue to produce net inflation until Ethereum switches over to proof-of stake this year.
It does not mean that fees will be lower, despite what some claim. Taylor Monahan, founder of MyCrypto, stated that “when [ETH] prices go up, your [transaction costs] will [gonna] go way up.” James Hancock, a developer, stated that EIP-1559 does not reduce fees but reduces transaction fees.
This is not the only EIP included in the London package. It also contains:
- EIP-3529 helps to offset some of EIP-1559’s additional block size variance. This allows block to use as much as twice the current gas limit.
- EIP-3541 is the foundation for further Ethereum Virtual Machine (EVM), improvements.
- EIP-3554 delays the difficulty Bomb, also known as the ice age to December 1.
Developers began testing London’s upgrade (previously scheduled for July) via the Ropsten testnet. However, ETH users were encouraged to “adjust their expectations.” Monahan stressed, for instance, that users do not know the final cost or the delivery timeframe.
At 09:19 UTC, ETH trades for USD 2,377. It is up by 3% per day and nearly 10% per week. This reduces its monthly losses to 12%.