Ethereum's EIP-1559 is going live today: Don't Fall for all the Misleading FOMO
It is a monumental day for Ethereum today. The project will officially seal the Metropolis Era, paving the way for Eth2 and proof-of-stake.
Traders, as usual, are ecstatic, expecting an immediate moonshot.
However, price action could have its ideas—as always have been the case—and an unforgiving contrarian pan out.
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Now, let's keep things clear. EIP-1559 will make ETH scarcer—which is good for prices. However, this scarcity and ETH becoming deflationary would take months.
There are no such things as ETH's supply dropping by 90 percent—in the so-called triple halving in hours.
Don't expect the ETH inflation rate to drop below BTC or Gold overnight.
EIP-1559 is on enhancing user experience by taming miners. If Gas becomes predictable, developers anticipate lower fluctuation---benefiting end users, most of whom are DeFi traders.
Predictability doesn't translate to scalability. Therefore, Gas fees will remain at present levels for a while—subject to network activity. Due to this proposal, users will be prevented from overpaying because of the new Gas estimation model.