Here’s why Ethereum’s EIP-1559 is much more than a basic fee
The price of Ethereum has fallen almost 14% this week, even falling to $ 1,651 in a short period of time. However, despite the price uncertainties, blockchain-related developments have not stopped. In fact, the London hard fork went live on the Ropsten test network on June 24th. Time developer Beiko has tweet about the first block that was produced on the test network.
“We have a block! It was a little slower than expected, but the London Hard Fork is live on Ropsten. “
This upgrade follows the Berlin hard fork and includes the addition of EIP-1559. The EIP has been widely recognized for the modifications it brings to the network and changes to the transaction fee mechanism. However, EIP-1559 does not only affect transaction fees.
With the long-awaited and controversial upgrade finally rolling out on the testnet, we should see what it does, but lower the fees.
While fee relief is one of the much-discussed features of Ethereum, there are other benefits to the network as well, including security issues, changing incentives for short-term reorganization, and breaking economic abstraction.
Prevent DOS attacks
Follow a chain tweet by Evan Van Ness – popular crypto blogger – the EIP-1559 is a “security critical” upgrade. While the Berlin hard fork is an important step in preventing DOS attacks on Ethereum, 1559 will be a critical and long-term step in stopping these attacks. According to Protocol Amendment 1559, it becomes more expensive for users to spam the chain while they are looking for profit.
Currently, mining pools include payments to miners with $ 0 gas fees. However, with the 1559 protocol, miners have to burn half the base fee to avoid this. In the meantime, mining pools would receive an incentive to use Layer-2 or a sidechain. The protocol will help free up block storage and encourage the adoption of Layer-2.
Miners can create some downside to chain stability, but by 1559 the ratio between block rewards and transaction fees will change, reducing these incentives for front-running transactions.
While EIP-1559 could result in a negative issue, it will put significant pressure on the price of ether, Ness added.
“Now EIP-1559 is only a few weeks away from the mainnet. The upgrade provides a better user experience as the transaction fees are predictable. However, this also depends on the performance reported in the test networks. The next phase for the full implementation of the London hard fork is live on June 30th in the Goerli testnet, followed by the Rinkeby test, the final testnet. The London hard fork is planned for the end of July.
According to AMBCrypto