cryptovibes.com
The long-awaited Ethereum Improvement Proposal EIP 1559 is set to be launched with the London hard fork in July this year. Despite the strong resistance the proposal has met, especially from miners, plans have been concluded to roll out the hard fork.
The developers also stated that not less than 5 other EIPs will join EIP 1559 in July.
The proposal will burn a tiny fraction of Ether (ETH) whenever the digital asset is used to pay gas fees on a transaction. After the launch, it’s bound to make Ether more scarce, which could lead to an increase in the price of ETH.
Observers believe the law of demand and supply will play out when the number of Ether tokens in circulation is reduced.
Making Ethereum network more efficient
Another important benefit of the upgrade is the improved efficiency of the Ethereum network. It will take the guesswork out of the Ethereum network. Presently, transaction fees on the network are highly inconsistent, as users have to depend on sites like ETHGasStation to determine the fees at a particular time.
Gas fees are still set by an inefficient auction process, but EIP 1559 is set to improve this. It aims to clarify the fees associated with transactions based on usage and network volume.
Content director at OKCoin Olivia Lovenmark stated that the proposed update will bring massive improvement as it provides market rate.
Senior Product Manager at ConsenSys, Tim Beiko, stated that the EIP 1559 will ensure that transactions are only paid with Ether, which will help the asset growth in the ecosystem.
Scarcity is seen as a good thing in the crypto world because it’s what makes assets like Bitcoin a “Store of value.” With the supply of ETH infinite, several analysts have voiced their opinion about inflation on the Ethereum network. However, other analysts believe that EIP 1559 will correct these issues
They said EIP 1550 will be one of the biggest milestones to reach when it comes o the Ethereum ecosystem. They will serve as a check on inflation, which was not feasible in the past.
With increased scarcity, Ether (ETH) will probably rise in price. Ether has been performing at an impressive rate over the past year. A year ago, ETH was about $200. However, the price has grown to $1,700, a 750% increase in price. Interestingly, Bitcoin has grown by 530% within the same period.