Earlier this month, Ethereum implemented a major update to its platform that reconfigures much of its tokenomics. The implementation was successful and is a clear sign that the world’s second-largest blockchain project has the capacity to evolve and stay relevant as the industry matures.
Here’s a look at how complicated this hard fork was and what lies ahead for the Ethereum community.
A complicated hard fork
Ethereum’s volatile fees and network congestion have been plaguing the user experience for years. Some critics argued that Ethereum was simply too big and slow to make necessary upgrades that would effectively address these issues. The successful implementation of the so-called “London” hard fork this month dispels those criticisms, but only to a degree.
For one, the new fee mechanism isn’t really straightforward. “It adds a lot of complexity to the fee logic, but it’s an interesting approach that could potentially stabilize the fee dynamics,” Nic Carter of Castle Island Ventures told reporters. The complexity could have been justified if gas fees had plummeted, but they haven’t. The average fee is around 43 gwei at the time of writing and Uniswap transactions can cost as much as $25.
Despite the fees and added complexity, the hard fork has achieved one of its primary goals – introducing deflation. Since the upgrade, 53,468.04 ETH have been burned, compared to net issuance of 98,457.52 ETH. This has limited the supply of new ETH on the network and paved the way for an upcoming transition to proof-of-stake.
Ethereum’s upcoming major upgrades
While Ethereum Improvement Proposal 1559 or EIP 1559 caught all the attention, the London hard fork also implemented several other upgrades to the network. One of which was EIP-3554 – a proposal to delay the difficulty bomb detonation to December 2021. In other words, by the end of the year ETH will become impossible to mine because the network will make it too difficult to do so. The network will have completed a transition to proof-of-stake by then, which is currently being tested.
This upcoming set of upgrades is known as ETH 2.0. If it’s as seamless and successful as the London hard fork, the Ethereum network could soon be far more scalable and energy efficient.
Ethereum’s major upgrade was pulled off successfully. Although the impact on fees hasn’t been as significant as expected, the fact that the development team could pull off such a complicated procedure seamlessly proves the network’s flexibility.
The upcoming ETH 2.0 upgrades could revolutionize the network even further. Users, investors and developers can be much more confident in upcoming upgrades given the seamless implementation of this recent hard fork. The ability to evolve could help the digital assets industry stave off disruption or obsolescence.