Ever since the launch of ETH 2.0 back in December 2020, there has been no other buzzing trends that has gotten the hype like the Ethereum Improvement Proposal 1559 (EIP) which is an upgrade to the ETH 2.0. The EIP is touted to mitigate the issues of high transaction fees that have ravaged the network recently.
Over the past months, Etherum’s price has continued to see a steady ascent. The DeFi Sector has also seen a massive growth. These factors have caused investors to invest massively in Ethereum. Gas fees, as a result have increased to a high price. BitInfoCharts reported that the regulated gas fee per transaction pegs at $17 at the moment. However, it shot up to $25 a couple of times this month.
In the EIP-1559, we will see a mechanism that helps monitor and regulate the current auction course that decides that prices charged for each transaction. This would help to make accurate adjustment of the charges, helping users to be charged the lowest bid per block.
Ryan Berckmans, who is currently an Ethereum developer as well as the founder of Predictions Global, hinted that we could see the launching of the upgrade by the month of July alongside the hard fork of ‘London’.
Positives of EIP-1559
Although, the price of Ethereum will not be directly affected by the launching of the EIP-1559, supply of the digital asset would be affected. The work-around of the EIP-1559 will cause the fees to reduce drastically. This means that we will see a decline in the issuance of the Ethereum coin over time, when we see the proof-of-stake rolled out.
Berckmans also said that could see the price of Ethereum peaked at about $20,000 as the burnt down fees would be going directly to those who hold Ethereum in their wallets instead of it going to miners as it usually does.