The highly anticipated EIP-1559 upgrade for Ethereum has been implemented in the Ropsten testnet. A milestone, as the upgrade will soon go live for good.
Upgrade for a faster, more efficient Ethereum
It has been expected for quite some time, and now the important Ethereum update EIP-1559 has landed on the Ropsten testnet on time. Ropsten is the first Ethereum testnet with support for Ethereum's London Hard Fork.
Background London Hardfork: This is one of the most important and most anticipated updates for Ethereum. Included in it: "Ethereum Improvement Proposal 1559" - EIP-1559 for short, the "fee-saving upgrade".
As Ethereum developer Tim Beiko writes on Twitter, the London hardfork was activated today on the Ropsten test network - on time as announced on 24 June 2021 at 02:23 UTC at block height 10499401.
We have a block! Took a bit longer than expected, but London is live on Ropsten
https://twitter.com/TimBeiko/status/1407882515075928067
The developer comments: He is "pretty excited" to have sent the first ever 1559-style transaction on a public Ethereum network and also shows it on Etherscan.
Next, the update will be implemented on the Goerli test network on Rinkeby on 30 June, then activated on 7 July 2021.
EIP-1559 - the most important Ethereum update ever
The upcoming EIP-1559 upgrade is considered the most important and comprehensive improvement in recent years. With EIP-1559, Ethereum is supposed to become rarer, faster and cheaper. This is to be achieved by restructuring the transaction fees.
In future, users will pay an algorithmically determined transaction fee instead of the one set by the miners. Simply put: In the future, users will only have to pay a base fee - and this will not (as before) be determined anew for each transaction.
Instead, the new fee system takes into account whether and how busy the network is at the moment. Based on this, the fee is then gradually increased or reduced. Finally, the fee is burned with the transaction. This is intended to reduce the costs of using the network. There is also supposed to be the option of giving miners a "tip" to motivate them to include a transaction in the block more quickly. However, there is no guarantee that this will happen.
In total, the London Hard Fork contains five so-called Ethereum Improvement Proposals (EIPs). However, EIP-1559 is by far the most important. Apart from cheaper fees, this is also because with the activation of EIP-1559, Ethereum becomes a deflationary asset for the first time: The burn mechanism makes ETH increasingly scarce - and this is generally considered a positive factor for the price.
Because: The base fee is paid in ETH. As a result, more ETH is burned when more transactions take place. This is good news for ETH hoarders - because the more active the network, the more Ethereum is burned. As a result, the number of available ETH tokens decreases - which theoretically increases the value of the remaining Ethereum.
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