- Ethereum’s London upgrade will go live in August first week
- But the crucial fundamental development has failed to boost ETH prices
JAIPUR (Coinchapter.com) – Ethereum’s much-awaited London upgrade/hard fork will finally go live next month (between August 3-5, to be precise). But even though the fundamentally important development is just around the corner, it has failed to cast a bullish shadow on ETH prices.
What Is London Upgrade?
The London upgrade is the next step in Ethereum’s consensus mechanism overhaul. The previous one being the Berlin update that got activated in April. As per the official announcement, the upcoming update will go live on block 12,965,000 of the Ethereum mainnet.
All the changes for the London upgrade have been written into various Ethereum clients, such as geth, Erigon, Besu, and Nethermind.
The changes are five in number, collectively called Ethereum Improvement Protocols (EIPs):
- EIP-1559: Fee market change for ETH 1.0 chain
- EIP-3198: BASEFEE opcode
- EIP-3529: Reduction in refunds
- EIP-3541: Reject new contracts starting with the 0xEF byte
- EIP-3554: Difficulty Bomb Delay to December 1st, 2021
The most significant amongst them is EIP-1559. As per the community’s consensus, it will minimize transaction fees on Ethereum.
Every transaction (dapp usage or monetary transfer) will have a certain “base fee.” According to Ethereum core developer Tim Beiko, “This means that it will be easier for wallets and users to estimate what the right price for their transaction should be.”
“Additionally, EIP-1559 adds a new transaction type where users can specify the maximum fee they are willing to pay, along with the maximum they are willing to send to the miner, and get a refund for the difference between that maximum and the base fee and miner tip.”,he added in the official explainer blog post.
EIP-1559 also includes a “transaction fee burn” feature. It will set in motion a process of extinguishing a portion of fees. Technically speaking, this will result in a “supply scarcity.” Since genesis ETH, Ethereum’s native cryptocurrency has had an infinite supply. However, EIP-1559 will change that story for good.
But Ethereum Bulls, Where Art Thou?
Even with the crucial development being so near, ETH prices have not responded positively. Since the last seven days, spot rates have retraced 20%, falling from local highs near $2400 to $1900. While the drawdown took a breather yesterday, bears are back in action, and a near 15% crash to the $1600 price level seems imminent.
No Sign Of Bulls But Bullishness Exists
But despite the inherent bearishness, Ethereum’s on-chain trends continue to give out bullish signals. The smart-contract pioneering blockchain settled $2.5 trillion worth of transactions in the second quarter this year, for starters. Messari researcher Ryan Watkins pointed this out in his recent tweets.
When it comes to mining, Ethereum miner balances have posted an uptick. “Miner balances for #Ethereum have been rising steadily for the past month or so. After miners held a staggering 163.3K $ETH back on March 26th, it dipped to as low as 94.2K on June 6th. Now, balances are on the road to recovery back to 112k.” said on-chain market data provider Santiment.
“Over the past 30 days, #Ethereum has added over 5 MILLION unique addresses. This is peak Metcalf’s Law. So $ETH #ethgang,”said Crypto Youtuber Ben Armstrong.