ViaBTC｜The Upcoming London Upgrade Marks A Major Step Towards Ethereum 2.0
Following the recent three testnet deployments, Ethereum developers have agreed on the latest conference to activate the London upgrade on Ethereum mainnet at block 12,965,000 around August 4, Beijing time. The London hard fork was later officially enabled on the new version of OpenEthereum and Geth client on block 12,965,000.
The London hard fork is the largest upgrade before Ethereum 2.0. It will deploy EIP-1559 which moves away from the current price auction model to a new structure where the gas fee is adjusted by the demand for block space. Furthermore, a fee-burning mechanism will be introduced, making Ether a deflationary currency by adding scarcity.
In addition to EIP-1559, four other Ethereum Improvement Proposals (EIP) are included in the London upgrade: EIP-3198, EIP-3529, EIP-3541, and EIP-3554. As a supplement to EIP-1559, EIP-3198 adds a BASEFEE opcode, thus enabling smart contracts to access the value of BASEFEE.
EIP-3529 cancels the original gas token mechanism, which will render all the gas tokens on Ethereum invalid. Therefore, gas token holders should spend their tokens before the upgrade. Otherwise, their asset will become unusable and cannot be hyped.
Once EIP-3541 is deployed, all the new contracts beginning with 0xEF bytes will be rejected while the existing ones remain unaffected. This proposal, which mainly aims at developers, sets the stage for future EVM improvement and ensures compatibility between existing contracts and future upgrades.
EIP-3554 delays the difficulty bomb to December 1, 2021. The introduction of the difficulty bomb means that Ethereum is ready for a transition from PoW to PoS. Once the bomb goes off, PoW-based mining on Ethereum will get increasingly difficult. As a result, miners will eventually leave PoW for PoS as mining becomes more expensive and less profitable. The delay of the bomb’s explosion time suggests that miners can continue mining under the current PoW algorithm for some time.
The London upgrade, which revolves around EIP-1559, is a significant change for users, miners, and investors alike. The addition of the BASEFEE opcode improves the user experience of executing a transaction and lowers the threshold for such operation. At the same time, the fee-burning mechanism could bolster investor confidence by making Ethereum a deflationary currency and improving user experience, even though it reduces mining revenue.
Following the London upgrade comes the Shanghai hard fork. Judging from the readiness of the Ethereum community, this upgrade will usher in Ethereum 2.0 and set the network on track towards a beacon chain under the PoS algorithm.
Ethereum is the second-largest public chain next to Bitcoin, with the most complete ecosystem. But delays to the Ethereum 2.0 rollout have raised concerns among investors about the network’s future. In addition, the longstanding problems of congestion and high gas fee on Ethereum have led to a loss of users and forced many DeFi projects to alternative public chains taking advantage of this situation to develop their ecosystems.
That said, the launch of the beacon chain at the end of last year has helped dispel clouds over Ethereum 2.0. And the upcoming London upgrade was a solid boost to investor confidence. Statistics suggest that the market is optimistic about Ethereum 2.0 staking as more than 6 million ETH, or 5% of Ethereum supply, were involved in the voting on the beacon chain.
The London upgrade, especially EIP-1559, has aroused controversy among miners. However, this hard fork seems inevitable so far. Even the miners who are not in favor of EIP-1559 must admit that Ethereum is backed by a group of the world’s best developers who would never stop innovating and bringing the network forward. Therefore, the prospect of Ethereum remains steady and promising.
At the same time, the consensus switch for Ethereum 2.0 suggests that the clock is ticking for PoW-based mining on Ethereum. The best option for miners is to secure their mining revenue before Ethereum 2.0 takes place. Or, they can become validators of Ethereum 2.0 by staking their asset. That is a way to keep making money even after mining under the PoW algorithm becomes unprofitable.
After the London upgrade, Ethereum 1.0 will officially become history. This hard fork is set to clear the way for an era of Ethereum 2.0. However, EIP-1559 will not fundamentally address Ethereum’s problems, despite it, to some extent, reins in the high gas fee, improve user experience, and introduces deflation. More effort is needed in the Ethereum 2.0 era to work out an ultimate solution. Only in this way can Ethereum create a better user transaction experience, keep the inflation rate low in an organized manner and ensure steady growth of its ecosystem over the long run.
