Have you ever been wondered to know more about Ethereum's monetary policy? Alright, here are the explanations. The EIP-1559 is a proposal to implement a hybrid system(Combination of base fees and tips) into the Ethereum blockchain to make the blockchain network quick enough to process the transactions. Now take a look at base fees and tips proposed by EIP-1559:
Base fees:-Base fees are determined by the algorithm and you should pay such fees to process the transactions.
Tips:- This is an additional fee and you can add more tips if you wish to see your transactions processed quickly.
The proposal is expected to be implemented on the Ethereum blockchain in July with the "London hard fork" but some biggest mining pools like China-based Xinghuo Mining Pool are refusing to support this proposal and they are discussing another fork. Anyway, despite the several debates on EIP-1559, the crypto community is ready to welcome the new implementation that will be responsible to burn the basefee on Ethereum.
So following advantages can be achieved once the hybrid system proposed by EIP-1559 is implemented on the Ethereum blockchain:
Transaction fees will be reduced massively and the system will be able to deal with transient congestion.
Basefee is burnt so miners can not manipulate the fee to claim more ETH from the users.
The network's efficiency will be increased and the transaction speed will be superfast.
Read it twice! Basefee is not going to the validators but burning basefee pays the ETH holders indirectly as the burning mechanism reduces ETH from its supply to secure the PoS based blockchain.
So what do you think, will gas-saving proposal EIP-1559 can be a key factor to propel ETH to follow the extremely bullish trend in the cryptocurrency market as the burning mechanism will be responsible to cut ETH from the supply?