The Ethereum EIP 1559 hardfork which goes live on August 4th 2021 will introduce a new base fee feature which could dramatically increase NFT usage.
The long awaited London Hardfork as it is being dubbed, would alter the way that transactions are processed on the Ethereum Blockchain, alongside a reduction in supply, with some 6000 tokens being burned.
The EIP 1559 London Hardfork comprises of five significant proposals which make up the ETH 2.0 protocol, the latest promising development in the Ethereum ecosystem. These proposals, including a shift from Proof-of-work to Proof-of-stake protocol being one of the main features, have gained a lot of excitement from investors of all sizes. The ETH 2.0 contract has to date seen over 6.4 million ETH worth over $16 Billion deposited.
EIP 1559 is one of the most anticipated changes, which will introduce a base fee in blocks mined on the ETH 1.0 network, with the gas price being based on demand, and is touted to make it easier for users to estimate the correct fee for their transaction by allowing them to set a maximum price they are willing to send to the miner.
This could have a dramatic effect on the uptake of NFT’s (Non Fungible Tokens), which still predominantly exist on the Ethereum blockchain, although there are many blockchain protocols which now provide the ability for cross-chain compatibility.
London Hardfork proposals going live on the Mainnet
- 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
Other benefits of ETH 2.0 include improved scalability and efficiency of transactions, which hopefully will signal the end of exorbitantly high ETH gas fees.
In the case of a difference between the miners fee and what is offered, the user will get a refund. Furthermore, part of the transaction fees will be burned, which is viewed as a critical move that will help the move towards ETH being a more deflationary currency, with more Bitcoin-like properties.
EIP 1559 is expected to go live at block height 12,965,000, and should occur sometime between 1pm and 5pm on August 4th.
