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EIP-1559 update is coming to the Ethereum mainnet in July
Ethereum is one of the most widely used blockchain networks in the world. However, its growth is severely affected by issues such as scalability and high transaction fees. That said, its developers are set to implement a proposal that would help reduce transaction fees on the network. The change would help make them more predictable.
EIP-1559 to address Ethereum’s high transaction fees
The Ethereum network is set to deploy the EIP-1559 update on its main network on July 14, 2021 using the London Hard Fork.As for London timelines, this is roughly what we are going for. We didn't want to set blocks on this call given that code is still not merged in clients and we are still waiting on an EIP, but the dates should be pretty fixed, and blocks should come during the next call. pic.twitter.com/sD5ZqtwvvA
— Tim Beiko | timbeiko.eth ☀️ (@TimBeiko) April 23, 2021
The developers believe EIP-1559 will make Ethereum transactions more efficient. First, it will will allow the network to deploy a hybrid system of base fees and tips. This would incentivize miners during periods of high or low network congestions.
The change would allow for the base fee which is determined algorithmically and is burned, and the inclusion fee which is a sort of "tip" paid to validators in order to incentivise them to process a transaction first.
Second, the Ethereum network is migrating to a Proof-of-Stake consensus mechanism. This feature has been dubbed ETH 2.0 and is the next most anticipated upgrade on Ethereum. This would solve the issue of scalability.
Growing Ecosystem
Despite the two obstacles currently faced by the Ethereum ecosystem: scalability and high fees, it remains the largest host of Decentralised Finance (DeFi). Users are paying for high gas fees to process transactions on Ethereum due to their trust in the network.In addition, projects have remained active on the same chain as they continue to see the Total Value Locked (TVL) in uncharted territory. The TVL data point represents the total number of Bitcoin, Ethereum, or DAI being used in the DeFi ecosystem.
Even so, this has given room for other teams to innovate and launch decentralised applications (dApps) on other chains such as Binance Smart Chain and Solana. That said, none of them are anywhere near catching the traction seen by Ethereum.
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