What are the Effects of EIP-1559 on Ethereum? Here is What you Need to Know

8:01 am, Thu, 12 August 21

Current Ethereum Data

Dominance
Price
Market Cap
Volume (24h)
1h
12h
1d
7d
1m
1y
?

Ethereum is the second-largest crypto market and has finally touched the $3,000 region. One significant factor that has boosted the price of ETH is the EIP-1559. Since its implementation, not only the price of ETH has gone up but it has burned $100 million in fees.

Ethereum is currently trading at $3,118 (at the time of writing). Therefore, if you are interested you can use some of the best crypto exchanges to buy Ethereum such as SwissBorg or Kraken (U.S. citizens).

Up to 50% discount on fees

However, if you are interested in starting crypto trading you can opt for PrimeXBT Covesting. It allows beginners to mimic experienced traders. Sign up with our link today.

What to Know About Ethereum’s Upgrade?

Ethereum’s London hard fork has been one of the most-awaited network upgrades. This upgrade included a measure that was intended to decrease the supply growth of the digital asset. This network upgrade reportedly went live last week and has already made a difference in Ethereum’s price.

The EIP-1559 was implemented through this network upgrade. It created a mechanism that burned the transaction fees on the network. Within a week, Ethereum has burned more than $100 million, which has pushed the price of ETH higher up the ladder.

Here is a graph by CoinGecko that shows the price of ETH over the last week.

eth-graph-12-08-2021

EIP-1559 was one of five code changes in the London hard fork. It changed the entire structure of the transaction fee on the network. According to the shift brought about by EIP-1559, the fees did not go to the miners who processed it for a transaction. Instead, a base fee was set aside for the network as well, which was then be destroyed.

This upgrade not only reduced the supply and boosted the price, but it has also been seen as a way to enhance the user experience. Unlike BTC, Ethereum was not created with a supply limit. With the help of EIP-1559, deflationary pressure is added and some of the new Ethereum created is given to the miners while some is sent off to be removed.

According to some reports, almost 31,000 Ethereum has already been burned. This amounts to a total of approximately $100 million, which has proven useful for the digital asset.

It is also anticipated that the structure of Ethereum 2.0 may further decrease the total supply of the cryptocurrency, considering that more fees will be burned than created.

Are you a Potential Investor or Trader?

The crypto market has been doing well for the past few days. The prices of both Bitcoin and Ethereum have noticeably surged, which has given some hope to the novice parties.

Ethereum is a prominent crypto asset in the market and has grabbed the attention of some major investors. Some people consider Ethereum to be better than Bitcoin and speculate it to outperform the flagship crypto asset at one point. However, this is yet to be seen in real life.

Nevertheless, if you are interested in buying Ethereum then you can opt for some of the best crypto exchanges in the market.

Up to €100 in Bonus

On the other hand, if you are a margin trader you can trade ETH with up to 100x leverage on Bybit. Use this link to sign up and earn a free bonus on your initial deposit.