Ethereum core developer Tim Beiko announced on April 23 that the highly anticipated London hard-fork and the included EIP1559 will likely go live by July 14. The EIP1559 upgrade will burn ETH tokens, relative to the fees generated on the network and will likely cause the ETH token to become deflationary i.e reduce supply by burning tokens.
The London hard-fork contains the token burning EIP1559, EIP3198 BASEFEE initiator, EIP3238 to delay Ice Age push-back and another EIP for gas fee refunds, which hasn’t been specified yet. Ethereum has been generating the highest amount of fees for any crypto protocol and now this fees will be used to burn/reduce the number of ETHs in circulation. Later, Ethereum 2.0 will follow and bring massive improvements.
The graph shows the amount of fees generated on the network and the amount of tokens EIP1559 would burn after it’s introduction. Relative to current fees, EIP1559 will burn around 6000-6500 ETH/day. This is likely to immensely boost ETH’s price, as more and more tokens are removed from circulating supply. The largest smart contracts platform in the world already has massive supply locked in Eth2 deposit contract, other smart contracts and DeFi protocols. It is being expected that ETH might be able to cross $5000 this summer, with some analysts hinting at even $10,000 per ETH figure.
About Ethereum 2.0
Ethereum 2.0 is the next big upgrade for the Ethereum network. It will bring Proof of Stake (POS), eWASM and sharding. It will reduce the resources, required to run the Ethereum network, as well as bring scalability and performance improvements.
The Eth2 upgrade will be implemented in three phases. The first Phase 0 Beacon Chain launched on Dec 01 ’20 and introduced the staking feature. This will be followed by the Phase 1 in Q1 2021, which will introduce sharding and allow data to be stored on shards, however transactions can’t still be processed.
The Phase 2 will make the Ethereum 2.0 truly complete and the network operational, after its introduction at some point in 2022. It will bring the Ethereum WebAssembly (eWASM) replacing the now operational Ethereum Virtual Machine (EVM). Only after the Phase 2 has been rolled out, proper execution of smart contracts and transactions can commence on the new Eth2 chain. The Eth1 and Eth2 chain will gradually merge with each other.
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