The upcoming crypto event been most talked about now is the EIP-1559 upgrade in the Ethereum Network that would take place very soon with the London Hardfork going to take place on block 12,965,000 on August 5. The narrative now is that EIP-1559 would make Ethereum a deflationary asset, giving everyone a bullish feeling about ETH.
Let’s understand what impact the EIP-1559 will have on the Ethereum Network here.
Changes in Ethereum’s transaction mechanism with the EIP-1159 upgrade
EIP-1159, is a Ethereum Improvement Proposal, which will have a base fee set for the transactions to be included in the Block. This base fee will depend on the network congestion, varying corresponding to Ethereum network’s congestion.
Exact Ethereum transaction fees to be paid would be clear
Now, users of Ethereum would know the exact amount of fees they have to pay to get their transactions processed, instead of guessing it.
Till now, we pay Ethereum’s gas fees, making an educated guess on the accepted fee rate checking sites like https://ethgasstation.info .
No reliable gas fees for Ethereum transactions, they have to be custom tweaked referring data from https://ethgasstation.info
We tend to pay higher fees than required to avoid the risk of our Ethereum transactions failing to get processed. On the other hand, we have had some of our Ethereum transactions fail due to not paying enough fees, or have experienced long wait times for our Ethereum transactions to go through.
Now, there is going to be clarity on the base fee users need to pay to have their transaction get processed, which reduces risks of failed transactions due to not paying enough fees.
Block size expansion improving Ethereum’s transaction processing capacity slightly
The Ethereum Network can take in more transactions in the Block too as the Block size increases to double during peak congestion times which is definitely a positive improvement, slightly enhancing the capacity and speed of the Ethereum Network.
Miner manipulation of Ethereum Gas prices are eliminated
The upgrade will reduce manipulation of Ethereum gas fee prices by miners as well. Ethereum miners manipulate Ethereum gas prices by front loading order of transactions and initiating bidding wars, which has been leading to exponential increase in Ethereum’s gas fee prices in the past.
This will also ease the process of gas refunds as well on layer 2 solution Optimism, with trusted inputs on reliable Ethereum gas prices being available.
Well, let’s see if the Ethereum Improvement Proposal, EIP-1559 does result in all these positive impacts on the Ethereum Network in the coming days as this upgrade is happening really soon finally.
