The EIP 1559 update has been much anticipated as a solution for ethereum's high gas fees. It has the potential to flatten the hike in gas fees. It has been included as part of Ethereum's next update slated for July.
With the rise in popularity of DeFi networks, a lot of blockchain applications were hosted on the ethereum network with many more planning to come onboard.
Major Signals
- The EIP-1559 was first proposed in 2018 and is intended to radically rebuild the ETH blockchain's fee system.
- Ethereum's All Core Developers decided to incoporate EIP-1559 for the London hard fork in July
- After the news, the 50-day moving average, MACD, MFI and RSI are all indicating a bullish turn in the immediate future.
But with the hike in gas fees, a lot of these projects went for platforms with cheaper gas fees like Polkadot, Flamingo etc. That's why the EIP-1559 update was convinced, as a way to decrease the gas fees.
The EIP-1559, which was first proposed in 2018, is intended to radically rebuild the ETH blockchain's fee system by introducing a standardized fee that would be the same across all users called a basefee. This means that, initially for a transaction to be included in a block, the user must pay the gas fee to a miner. But with the upgrade, the fees are sent to the network itself.
Some of the Miners have refused, stating various reasons, such as smaller profits etc. Other miners agreed to the update, seeing it meant good for the network and the token. Since ETH transaction fees are either burned or stored into a long-term mining pool, the upgrade would render Ethereum a deflationary asset.
A deflationary assets is an asset that increases in value over time either due to a stop in supply or an increase in the number of demand way past that of the supply.
Members of Ethereum's All Core Developers decided to incoporate EIP-1559 for the London hard fork in July during a call on Friday.
News of the update has cost the price of ethereum which was looking shaky and headed for a father bearish turn to turn around and head into an uptrend. The 50-day moving average, MACD, MFI and RSI are all indicating a bullish turn in the immediate future.
This, together with the stimulus check recently released by the U.S. Central Bank means good things for ETH/USD. The possiblity of Ethereum retesting the $2k price area is definitely a possiblity in the days and weeks to follow.
