The most-talked about change is EIP-1559 . That proposal does a number of things in a bid to stop transactions from building up on the sluggish network—and make it clearer to Ethereum users how much they must pay in "gas" fees to push their transactions through in a timely manner.
For months, Ethereum users have been looking to this upgrade to boost ETH prices, make fees (slightly) lower, and take the guessing game out of transactions. But the upgrade is massive enough that many warn that it won't be a straight shot from point A to point B. Developers will be on the lookout for any hitches to the network's consensus mechanism, while users will double-check the price of every transaction.
"Hard forks are big, fundamental, breaking changes by definition," Taylor Monahan, CEO of wallet provider MyCrypto, told Decrypt . "Things can go wrong on multiple levels."
EIP-1559's mechanism for reducing congestion is doubling the capacity of each block that's added to the chain. In addition, it replaces the current auction-based fee structure with an automated base fee. That should help alleviate the plague of failed transactions, which can cost users of NFT platforms and decentralized lending and exchange protocols built on Ethereum thousands of dollars for underestimating the gas they would need.
The upshot, wrote Ethereum Foundation developer Tim Beiko: "As long as a transaction is sent with a fee higher than the BASE FEE and includes a tip for the miner, it will be included in the next handful of blocks."
What's in the Ethereum London Hard Fork Beyond EIP-1559?
The contentious part about EIP-1559 is where that base fee goes. It's not to the miners processing transactions. It's burned, meaning the rate at which ETH supply is growing will slow. While each mined block will still fetch a miner 2 newly minted ETH, the network will also take a fraction of an ETH out of circulation. In cases of high congestion, more ETH will be burned than are being created.
The deflationary pressure should be good for investors who are long Ethereum. The less of something there is, the higher price it should be able to fetch.
But there are reasons to be skeptical of EIP-1559's effect, especially in the short term.
For starters, as those who have helped coordinate the upgrade have stated , "It was an incredibly complex change, the largest done on Ethereum mainnet to date, which will improve both the user experience and economics of the entire network."
Moreover, the implementation of the previous, less-complex Berlin upgrade, led to a consensus error that took 12% of all Ethereum nodes—the computers that help run the network—offline shortly after it was implemented.
Is there any chance this update could falter, whether that's a coding error or something else?
Beiko, who is tasked with coordinating network updates, isn't overly concerned.
"As for how likely it is to work as intended, I’d say it would be very unlikely for it not to," he told Decrypt . "We’ve had both technical and economic audits of the EIP, have done extensive testing and have seen it work as intended both on Ethereum testnets and other blockchains."