Sarah Tran
Independent Analyst
- The London hardfork is nearing as Ethereum has deployed its first testnet as part of the upgrade.
- The first block was produced on the Ropsten testnet on June 24.
- The upgrade will include the implementation of the long-awaited EIP-1559 modification.
One of the most anticipated updates for the Ethereum network in 2021, the London hardfork scheduled for July, includes a controversial Ethereum Improvement Proposal (EIP) 1559.
Ethereum transaction fee mechanism to be altered
Ethereum core developer Tim Beiko announced that the London hardfork was activated on the Ropsten test network on block height 10499401.
While this activation process took longer than expected, this marks the first step as part of the London upgrade on testnets on Ethereum.
Since a lack of miners have upgraded their equipment in time, the Ropsten testnet is validating blocks with reduced speed.
The upgrade will see the implementation of the highly anticipated EIP-1559 that will change the way transaction fees work on Ethereum.
Miners currently receive revenue from two main sources, including a block subsidy and transaction fees. The proposal removes transaction fees as an income source for miners and replaces it with the inclusion fee.
Ethereum miners would likely earn less from just the inclusion fee since it is both optional and an additional fee on top of the base fee users pay for their transactions.
It is difficult to determine how much lower revenues would be for miners after the proposal comes into effect. ETH miners can also receive an additional lesser-known revenue stream, known as miner extractable value (MEV), which reorders or reorders or censors transactions on the network.
The next phase toward the full rollout of the London hardfork is the deployment on the Goerli testnet scheduled for June 30. The last testnet, Rinkeby, is scheduled for July 7, and the final London hardfork upgrade will be rolled out on the Ethereum mainnet later in July
While the London hardfork and the EIP-1559 would not result in a massive reduction in gas fees, the introduction of a more predictable base fee may lead to “some reduction in gas prices,” according to Ethereum software solutions provider ConsenSys.
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