ViaBTC｜London Upgrade Completed, a Step Towards Diversified Ethereum Applications
On August 5, Ethereum reached the block height of 12,965,000 at 12:33 GMT. We saw the first burning of about 0.03 ETH. The block height marks the official completion of the London Upgrade and the next-to-last hard fork of Ethereum before the beacon chain merges with the Ethereum mainnet, ushering into the last stage before ETH2.0.
According to Etyhernodes data, until 02:30 August 6 GTM, the London Upgrade has been completed for 89% of the Ethereum nodes, and the percentage is still growing. The hard fork did not lead to any mainnet forking. Though EIP-1559, the most crucial element in the London Upgrade, had sparked many controversies and was even opposed by some mining pools, at the moment, the crypto community has finally reached a consensus for the upgrade as it recognizes Ethereum’s impressive growth.
The London Upgrade contains five main proposals: 1) EIP-1559 that reforms the current gas fee mechanism and activates the burning mechanism; 2) EIP-3198 that introduces the BASEFEE opcode; 3) EIP-3529 that aims to remove the Gas Token mechanism; 4) EIP-3541 that disallows new code starting with the 0xEF byte to be deployed; 5) EIP-3554 that delays the difficulty bomb. Of these, EIP-3198 and EIP-3529 are complementary proposals to EIP-1559, the core of the London Upgrade, whereas EIP-3541 offers the prior tech support for the Shanghai Upgrade and future beacon chain mergers.
With the introduction of EIP-1559, the Ethereum network can now conduct dynamic adjustments of BASE FEE according to the current trading demand and block utilization. At the same time, this part of BASE FEE will be sent to the address 0x0000000000000000000000000000000000000000 without a private key to be burned at last.
According to statistics from ultrasound.money, until 03:00 August 6 GTM, 3,480 ETH has been burned on Ethereum. Except for the contract address of COVIDPunks for minting, the most burned five contract addresses are OpenSea (a decentralized NFT market), Uniswap V2 (a top decentralized DeFi exchange), Axie Infinity (a blockchain game), Tether (a dollar-backed stablecoin), and Uniswap V3, in that order. The fact that these applications are from different fields is an indication of diversified application development of the Ethereum ecosystem.
Since the London Upgrade, within 14.5 hours, 3,480 ETH has been burned. Based on this figure, the daily burning amount on Ethereum is expected to approach 5,760 ETH. The actual number varies in line with the network activity. There are also a few extreme cases on Ethereum where more than 7 ETH is burned in a single block. In such cases, the burned ETH far outnumbers the ETH generated, and if this trend were to last, Ethereum would be deflated. Yet, in the light of the present situation, the burned amount of most Ethereum blocks is kept at 0.5 ETH to 1.5 ETH, which has yet to surpass its block output. Overall, Ethereum can still manage to keep issuing more ETH.
As the Ethereum ecosystem grows, both the trade volume and the burning volume will go up. From prediction using the current gas price of 34Gwei and estimation based on data from ultrasound.money, the speed of additional issuance will become significantly slower after the London Upgrade. After Ethereum changes the consensus mechanism to PoS, assuming that the total amount of staking reaches 10 million ETH and the daily output of PoS is 1,400 ETH, the burned amount will be higher than the additional issuance, and Ethereum will move towards deflation.
The market is quite pleased with Ethereum’s performance after the London Upgrade as Ethereum is making an effort to address its problematic performance. Though the crypto community had its doubt about Ethereum’s technical capacity after multiple delays concerning the Ethereum 2.0 upgrade plan, ETH2.0 no longer seems to be so unattainable after the London Upgrade. Now, the Shanghai Upgrade is the last missing piece to the merger of the beacon chain with the existing PoW chain, which will bring along a brand-new ETH2.0 era. New prospects will be unveiled for applications in a wide range of fields, such as DeFi, GameFi, and NFT, and Ethereum will get closer to the goal of a “World Computer”.