Ethereum’s latest hard fork update, dubbed London, was officially activated on the network on August 5 at block 12,965,000. The change is part of Ethereum Improvement Proposal (EIP) 1559.
After the London hard fork, each transaction in Ethereum will involve the burnt of the base fee, automatically reducing the circulating supply of ether (ETH). The goal is to improve the network user experience and ethereum value proposition.
The upgrade is considered a milestone for the transition to Ethereum 2.0. EIP 1559 will introduce variable-size blocks, which means that there will be more flexibility in the amount of data in each one.
This flexibility will help alleviate issues, such as limited transaction fees or how quickly the network processes or includes transactions. An algorithm will determine the basic transaction fee based on traffic displayed in advance with the new protocol. For some experts, the upgrade could make ETH deflationary.
Update worries miners
Although much anticipated by the market, the London hard fork did not please the miners, who will have their profit reduced, according to Tecmundo. This is because, in addition to the reduction in fees, the upgrade reduces the computational need of the network. Thus, investments in more powerful (and expensive) computers will be rendered useless.
However, this change brings a very positive aspect to the network, which is reducing power consumption. After all, the upgrade reduces the need for computing power by up to 99%.
Other improvement proposals
EIP 3554 delays the “difficulty bomb”, coded to make mining more challenging, essentially “freezing” it, as a previous step for Ethereum’s transition from the proof-of-work to a proof-of-stake model. When activated, the change will make rewards’ earnings in blocks much harder to get.
EIP 3529 reduces the gas fee, typically used to encourage developers to reduce or delete smart contracts and unused addresses in Ethereum. This is because gas tokens take up network space.
O EIP 3198, por sua vez, permite que os usuários utilizem a taxa básica de qualquer bloco para estimativas de aplicações descentralizadas, e o EIP 3541 configura atualizações futuras.
In turn, EIP 3198 allows users to use the base fee of any block for decentralized application estimates, and EIP 3541 sets up future updates.
The next update, dubbed the Shanghai Hard Fork, is scheduled for later this year.