The Ethereum Improvement Proposal 1559: Is the squeeze worth the juice?

What the planned EIP-1559 could mean for Ethereum, DeFi and miners.
The Ethereum Improvement Proposal 1559, set to be bundled together with the “London” upgrade in July, has caused as much excitement as fear and panic. On the surface, EIP-1559 is nothing more than a change in Ethereum’s gas fee structure. And to spice it up, it has also been labeled as Ethereum’s scarcity engine, or burn mechanism, as it will destroy Ether (ETH) used in transaction fees, making the cryptocurrency deflationary, and perhaps more valuable down the line. Related: Ethereum at a crossroads: Ether community turmoil over miner reward feesCurbing Ether’s inflation will make the digital asset as deflationary as Bitcoin (BTC), meaning that its buying power will only increase over time. However, the relevance of the EIP-1559 proposal is based on fixing the runaway gas fees. The upgrade has been in the works for some time, but its timing couldn’t have come at a better time. Ethereum’s sky-high transaction fees are a result of the network being the most used blockchain in the world. This is partly due to its smart contract functionality, something that Bitcoin’s blockchain is limited in.Ethereum’s functionality has seen it being used as the backbone of several booms in the sector. First, it was initial coin offerings, then came decentralized finance and now nonfungible tokens. To have a better understanding of the relevance of EIP-1559, we need to step back and take a look at the current …
Story continues on Cointelegraph

Related posts

UK crypto firms must now submit yearly financial crimes reports

Financial crimes reporting obligations are irrespective of a crypto firm’s total annual revenue. The United Kingdom’s Financial Conduct Authority has included cryptoasset businesses under the financial crimes reporting umbrella eight months after initially announcing plans to do so.The FCA made…
AdoptionCashCBDCcentral bankChristine LagardeCointelegraph.comdigital currencyECBeuroEuropeFiat MoneyPayments

Digital euro could take four years, says ECB president Christine Lagarde

The ECB will decide whether to proceed with digital euro pilots by mid-2021, Lagarde said. It could be a while before European Union gets a central bank digital currency, if it gets one at all.In a Wednesday interview with Bloomberg…

China's blockchain project BSN to integrate R3 Corda

Chinese banks will soon have access to a permissioned version of the Corda Enterprise infrastructure via the country’s Blockchain Service Network. Red Date Technology, one of the builders of China’s Blockchain-based Service Network, has obtained licensing rights from R3 to…