ETH Ethereum London upgrade EIP-1559 may not solve high fees

The long-awaited upgrade to EIP 1559 is also known as the London hard fork.

The London upgrade introduced about 5 new major changes to the Ethereum blockchain.

EIP-1559: Fee changes for the ETH 1.0 chain

EIP-1559 is the most anticipated place for this Ethereum upgrade, and it is also the biggest change introduced by the London upgrade. EIP-1559 will introduce a “basic fee” in the blocks on the network, which will track the gas price that the network accepts from transactions based on the block space requirements, which means that wallets and users will more easily estimate the correctness of their transactions What should the cost price be. In addition, EIP-1559 adds a new transaction type. Users can specify the maximum fee they are willing to pay, and the maximum fee they are willing to pay to the miner, and get a refund of the difference between the maximum fee and the basic fee. tip. Finally, EIP-1559 will also cause part of the transaction fees to be destroyed, which is seen by a large part of the community as a major improvement to the Ethereum network economy.

EIP-3198: BASEFEE opcode

EIP-3529: Reduced refunds

EIP-3541: Reject new contracts that start with 0xEF bytes‌

EIP-3554: Difficulty bomb delayed until December 1, 2021‌

Positive market response

ETH Ethereum London upgrade EIP-1559 may not solve high fees

People are paying much attention to the expectations of Ethereum (ETH). In the past 24 hours, the price trend has risen and the market bulls have basically controlled the price.

The price increase is mainly driven by the positive sentiment of the improved protocol 1559. The Ethereum blockchain will now operate through a basic fee structure, with all users paying the same gas fee for the transaction.

In addition, the basic fees being paid by miners are currently undergoing periodic burning, of which more than 2000 ETH have been burned. The deflation model will help reduce circulating supply and push up prices through the imbalance of the supply and demand curve. The current rise is mainly supported by this sentiment.

Old users

Data from the chain shows that the total number of new addresses in the Ethereum blockchain is 3,149, which has dropped by -14.45% in the past 24 hours. The number of active addresses also dropped by -8.14% to 29,382, which clearly shows that most of the price movements may be caused by old Ethereum addresses.

ETH Ethereum London upgrade EIP-1559 may not solve high fees

According to transaction data, although the transaction volume of tokens has increased by more than 27.05% to reach $31.145 billion, other indicators on the chain are basically bearish, which makes people question the sustainability of the current upward trend.

According to data from Glassnode, the stock of ETH on the exchange dropped by 13.8% to 16,238 ETH. This decline is obviously offset by the deposit of the Ethereum 2.0 smart contract, which is clearly on the upward trend.

The DeFi protocol and other platforms have a new Ethereum infrastructure that can be used to reshape their trading mechanisms. With the improvement of availability, more investors may continue to bet on the future of Ethereum and the Ethereum blockchain. If you look at it this way, the future price of Ethereum may continue to rise.

How much ETH was burned

This upgrade is of great significance to the Ethereum blockchain and may mean solving the pain caused by high gas fees.

Among these improvements, the EIP-1559 improvement is related to solving gas fees, and has been considered a panacea to prevent large-scale cost increases that may continue to damage network availability. Unlike what was previously available, the Ethereum network now sets a basic gas fee applicable to all users.

One of the other changes is the destruction of gas fees paid by network users. This upgrade is designed to help offset the inflation rate of Ether. Since the EIP 1559 upgrade went online, as of the time of writing, 2867.1 ETH has been destroyed.

ETH Ethereum London upgrade EIP-1559 may not solve high fees

The current price of Ethereum is US$2,821.44, and the total value of burnt Ether is approximately US$8.08 million

EIP 1559 fee model may be invalid

The concept of token destruction is becoming more and more popular in various encryption projects today. It is a model designed to help reduce the supply of basic assets in circulation. As far as Ethereum is concerned, token destruction is a new thing for Ethereum, and it may become the most important place for institutional investors and retail investors, which can stimulate MEME sentiment.

With the launch of Ethereum 2.0, the new Ethereum network will use the Proof of Stake (PoS) consensus mechanism to work, hoping to have a more durable solution to the gas fee and scalability issues.

Although the GAS war may be over, the new EIP 1559 protocol has a warning that users are free to tip miners.

In addition to the basic fee, the transaction sender can also choose to provide additional tips. Tips are paid directly to miners, similar to current transaction fees. If the block is close to full capacity, paying a high tip will incentivize miners to process transactions first.

When sending a transaction, the user can set the upper limit of the fee. The fee cap is the highest fee the sender is willing to pay, including basic fees and tips. If the upper limit of the fee is higher than the basic fee, the difference will be sent to the miner as a tip. If the upper limit of the fee is lower than the basic fee, the transaction will not be packaged into the block.

Old wine in new bottles

In the new plan, EIP-1559 will introduce a target block capacity mechanism, which aims to keep the block capacity at 50%. In EIP-1559, the maximum block capacity will increase from 12.5M gas to 25M gas. However, the target block capacity will remain at 12.5M gas. If the gas cost contained in a block exceeds the limit of 12.5M, the block will increase the limit, and the final upper limit of gas cost is 25M. Tips can be considered as additional rewards for miners. Once the gas cost reaches the final upper limit of 25M, miners can sort and pack according to the tip cost, similar to the current first price packaging.

This may still cause some transactions to take precedence over other transactions, thus invalidating the basic fee model of this upgrade. EIP-1559 may not be able to solve the problem of high fees.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/eth-ethereum-london-upgrade-eip-1559-may-not-solve-high-fees/
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