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While the Istanbul fork was a necessary upgrade, the second largest blockchain by market capitalization is expected to make further changes before the transition to Ethereum 2.0. One of these could be the inclusion of EIP 1559 proposals.
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Impact of the Istanbul hard fork, introduction of EIP 1559
Currently, platform users are grappling with high gas charges thanks to code changes and the implementation of EIP 1884 via Istanbul. However, enabling EIP 1559, as commentators said, can fix Ethereum’s ever-changing monetary policy, stabilize the network, and most importantly, improve the user experience in terms of gas management.
Ethereum ETH gas fees
Eric Conner submitted the suggestion for improvement. Ethereum supporters expect the inclusion of this code fix to be the final component of Ethereum’s economic system, solving problems related to smart contracts. Gas management system.
“This proposal introduces a fixed fee concept using a MINFEE. Users can pay a premium for this if they want, but in general, it simplifies UX a lot. A big advantage of this EIP is that the MINFEE is burned and has to be paid in eth. We ensure that there is no economic abstraction at the protocol level, which is extremely important for long-term Eth value. “
The EIP 1559 will set the market price for the block uptake and most importantly burn most of the ETH that is included in the transaction fees.
Eric also believed that this EIP would improve the user experience around gas management as knowing the exact amount of gas that will be spent on each smart contract deployed is part of user billing.
Effects on the economy of Ethereum
Taken together, these two factors have a significant impact on Ethereum’s economic system and, as previously mentioned, could be the missing conundrum that would make Ethereum’s economic policy reasonable once and for all.
By burning the majority of ETH in a transaction-free manner, ETH becomes scarcer and contributes to Ethereum’s deflation mechanism.
Not only for miners with scarcity advantages (validators in a proof-of-stake consensus algorithm that Ethereum 2.0 will use), but also for loyal coin holders.
The apartment can remain unchanged
So far, opinions have been mixed. However, pragmatists say this improvement wouldn’t have much of an impact on the price. For a Twitter user, EIP 1559 is essential as it would stabilize the network “by securing value at anchor points”.
“A healthy blockchain community needs more stability. The way you get stability is to secure the value at the anchor points. The most obvious anchor points are the burning of a base fee under the EIP-1559 and a second protocol change on a large part of the mine / staker tips. “
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