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An Ethereum upgrade that decreases the volatility of transaction fees has been planned for Ethereum’s ensuing key hard fork. The upgrade, dubbed EIP-1559 (Ethereum Improvement Proposal), is planned to go live in Ethereum’s “London” hard fork this July.
The proposal lessens the volatility of transaction fees by burning the fees, compensated in ETH, as an alternative to paying it to miners.
Even though miners will lose money, analysts are of the opinion that the upgrade possibly will drive the price of Ethereum and make it inexpensive to use.
EIP-1559 changes the mechanism that is being used by the users to pay ETH transaction fees. Presently, fees are awarded to miners for dealing out transactions.
The CEO of Ethereum infrastructure firm Staked, Tim Ogilvie mentioned,
“I don’t think miners are going to be long-term winners here. I think they’re gonna fight. But I think there are going to be long term losers”
The long-awaited Ethereum upgrade, Ethereum 2.0 transitions the blockchain from a POW consensus mechanism to a POS one.
It is to be noted that the aforementioned proposal has reaped some of the major backing to date from Ethereum application creators and users alike, given the present difficulty of picking out an accurate transaction fee. On the other hand, several miners and mining pools, have been gathering in disapproval against the proposal as it advanced toward mainnet.
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