The London upgrade, one of the most anticipated by the crypto community, is just minutes away from being activated on the Ethereum mainnet, to begin a series of reforms that will make the network more scalable and secure.
At block height 12.965.000, Ethereum (ETH) will take an important step towards its evolution and optimization, with the activation of the hard fork London, one of the most anticipated network updates by the crypto community.
The arrival of London will allow for a series of reforms to be introduced to the Ethereum mainnet to make this network much more robust, secure and scalable. One of the main reforms that this hard fork brings with it is the Ethereum Improvement Proposal (EIP) 1559, which will completely change the network's transaction fee system. All expectations are placed on this improvement proposal, which will reduce transaction fee rates and eventually make ether a deflationary asset.
On calculations Ethereum developers show that block 12.965.000, where London will be activated, is mined today, August 5th in the morning hours.
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Ethereum, London and EIP-1559
Ethereum is, par excellence, the network blockchain leader for the development and implementation of decentralized applications (dapps) and smart contracts (smart contracts). However, its low level of scalability, combined with the high current demand and use, has caused the network to become congested, raising the cost of transactions disproportionately.
Until recently, in May, fees for simple transactions on Ethereum were over $70; by the end of July, fees had dropped to an average of $9,8 per transaction. Although the decrease was quite significant, it is still a very high price for investors and users with small wallets, which is why many have abandoned the mainnet in search of more scalable and accessible second-layer solutions, such as Polygon; and have even opted for other networks such as Cardano, Polkadot and BSC.
With the arrival of London and EIP-1559, Ethereum developers will be able to address this problem, allowing the network to become much more scalable. Let’s see why.
Reform of the commission system
The EIP-1559, as it has explained Bit2Me News previously said that it will be the key proposal to reduce gas fees on the Ethereum network, due to the reform in the network commission system.
Essentially, this proposed upgrade will set a base fee rate, algorithmically calculated based on network demand, for miners to process and confirm a transaction, replacing the fee auction mechanism that is currently in place. So, instead of increasing fees for miners to prioritize a transaction within a block, users will have to pay the base fee calculated by the network. Users also have the option to send a tip to miners for their work, something that CoinMetrics analysts believe could work in a similar way to the auction mechanism that is being removed with this upgrade.
Burning ethers
On the other hand, the EIP-1559 is designed to convert ether, cryptocurrency Ethereum native, into a deflationary asset, burning a portion of the ethers that users pay in fees to miners. That is, part of the commission fees that users will pay will not go to miners, but to an ethereum address that no one has the access to. private keys nor does it have access, so the coins sent will go out of circulation or be “burned,” the term used for this process in the crypto industry.
Although miners will continue to generate ethers as rewards for mining blocks, while the migration to Ethereum 2.0 is being completed, a portion of ethers will no longer be available, making the cryptocurrency scarcer and more deflationary; of course, this will not be a process that occurs immediately.
Developers, the crypto community and experts on the subject point out that the burning of ethers, which will reduce their supply in the future, will help raise the price of the cryptocurrency on the market, so exceeding $10.000 per unit or more is something that is within the possibilities in the short and medium term.
Some bolder crypto investors, such as Nikhil Shamapant, considering that the price of ether could reach $150.000 per unit in the next two years.
Other proposals for improvement
In addition to EIP-1559, the London hard fork brings with it other proposals for improvements to the Ethereum network. For example, the EIP-3198, which focuses on smart contracts to return the BASEFEE of a block. This proposal acts similarly to EIP-1559, allowing interaction with smart contracts to be more accessible and affordable.
The EIP-3529, which reduces gas refunds for EVM operations; EIP-3541, which prevents the implementation of contracts that start with 0xEF and EIP-3554, which delays Ice Age to make network mining difficulty increase, will also be coming to the minenet via London on August 5th.
London, on the road to Ethereum 2.0
The London upgrade also points the way to Ethereum's migration to Ethereum 2.0, the network based on the Ethereum consensus protocol. proof of stake (PoS) which will replace miners with validators and bring true scalability to ensure the future of Ethereum in the industry.
Ethereum 2.0 will also make the network much more energy efficient, promising a reduction of up to 99% of its current energy consumption; a very positive aspect for the network, whose proof-of-work model or Proof of WorkPoW) has caused great controversy globally, as has Bitcoin.
On the other hand, increased scalability will ensure that Ethereum continues to be an industry leader, enabling the development of more robust and secure decentralized applications, as well as the growth of decentralized finance ecosystems (DeFi) and the NFT.
Ether is approaching $3.000
Just hours after London went live on the Ethereum mainnet, the price of the cryptocurrency began to skyrocket, and is close to touching $3.000 per unit again. According to data from CoinMarketCap, ETH has increased by almost 10% in the past 24 hours, while its weekly growth exceeds 18%.
At the time of this edition, ETH is trading on the markets with a value of $2.750 per unit.
Continue reading: Ethereum developers fix bug in EIP-1559, shortly after its implementation
