Gas Fixes in Ethereum begins following London Hard Fork Approval
Ethereum has a Gas fee problem. Driven primarily by the unprecedented level of demand and the blossoming of decentralized finance (DeFi), transacting in Ethereum is expensive for the ordinary user. It is even costlier for DeFi traders since each transaction is a rollup of several. The good news is that approval of the EIP-1559 activation in the London Hard Fork after Friday's core developer meeting. The upgrade will involve the overhaul of the current first-come auctioning system for a new mechanism, introducing a BASE FEE and a miner tip.
The London upgrade activates at a tentative time in H1 2021. Berlin comes in April, concluding the Metropolis Era. EIP-1559 is an emergency fix specifically meant to address the high Gas fees and enhance the user experience. With a baked-in deflationary feature and comparatively lower on-chain fees, Ethereum may attract more users. Accordingly, ETH/USD prices could rally, especially if Layer-2 solutions like Optimistic Rollups, Sidechains, and others gain traction, for a multiplicative effect.
Impact on the ETH Price:
Bullish. The shift to "Ethereum killers" is due to the high cost of Gas. Proponents project the network to have more utility and higher demand for ETH, a net positive for ETH/USD prices.
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