Ethereum, the second largest crypto by market cap, is expected to activate its London hard fork on Thursday, according to Ethereum.org.
According to the information available on the site, “the London upgrade is scheduled to go live on Ethereum in August 2021, on block 12,965,000. It will introduce EIP-1559, which reforms the transaction fee market, along with changes to how gas refunds are handled and the Ice Age schedule.”
The upgrade will bring the EIP-1559 proposal, which will affect how the network manages transaction fees. After it is implemented, a base fee will be burned every time a transaction is conducted, as as result, the circulating supply of the asset will gradually decrease, which should have a positive impact on its price, at least in theory.
In addition, users will be able to include a tip to miners, which will probably result in faster transactions.
Twitter user korpi has said the most important innovation of the hard fork is the fee burning feature:
“What everyone is excited about is $ETH burn. After EIP-1559, part of the transaction fee is burned and removed from circulation. But it doesn’t mean that ETH immediately becomes a deflationary asset. For that to happen, ETH burned must be higher than ETH issued in block rewards.”