The London hard fork went live around a month ago, and the Ethereum network has seen numerous changes since then
The Ethereum network underwent the London hard fork roughly a month ago, and the blockchain is already seeing changes in its operational status. Since the Ethereum blockchain introduced the EIP-1559 fee burning mechanism, over 100,000 ether coins have been burned. This equals around $300 million worth of ether over the past 20 days, according to The Block.
The London fork introduced a unique transaction fee method to the Ethereum ecosystem. For users to conduct a transaction, a base fee is paid, which the network proceeds to burn. Meanwhile, the priority fee is given to the miner as a tip for approving the transaction.
Thanks to this transaction model, the Ethereum blockchain has lowered its inflation level over the past month. The Ethereum blockchain has been working on migrating to a Proof of Stake protocol from its current Proof of Work mechanism, and the London hard fork was a major upgrade required to make the migration possible.
In the past, the Ethereum network has experienced a 5% increase in supply annually. However, since the EIP-1559 upgrade, inflation has been reduced by 35% since some of the coins are burned during transactions.
The EIP-1559 upgrade is also useful to Ethereum network users because it has made it possible to predict how much will need to be paid in transaction fees. This was impossible in the past, especially during periods of network congestion on the Ethereum blockchain.
While the EIP-1559 upgrade didn’t reduce the high cost of transactions on the Ethereum blockchain, it makes it more predictable for the users. The migration to the Proof of Stake protocol is expected to solve some of the underlying issues affecting the Ethereum network, such as scalability and high transaction fees.
The Ethereum network is one of the most important in the cryptocurrency space as it houses a wide range of decentralised finance (DeFi) projects, non-fungible tokens (NFTs) and more.