The developers positioned the London fork as an update that would change the principle of calculating commissions. That is, users will pay less coins for transactions than before. Thanks to this, according to the creators, interest in the blockchain will increase both from users and from the creators of decentralized applications. Consider the features of the EIP 1559 update and its impact on the Ethereum blockchain.
Features of the functioning of the blockchain
Prior to the release of the London update, commissions for transactions in the blockchain were formed on an auction basis. That is, the first payments were made for which users gave more rewards. To quickly transfer the payment to the specified address, it was necessary to charge a large commission.
As the popularity of the Ethereum ecosystem grew, the load on the blockchain was constantly increasing. The competition between users who wanted to transfer their money faster increased. Sometimes it came to the point of absurdity, when the commission for the transfer could be more than the payment itself. Obviously, such a network is not suitable for performing microtransactions.
The features of the EIP 1559 update are that this package allowed to level the described drawback. The fee for transfers has become lower, which stimulated an increase in the volume of transactions. Also, after the update, a certain part of the commission began to be destroyed (burned) in order to limit the issue of the coin.
The creators took this measure in order to reduce the inflation of the coin and maintain its rate relative to other cryptocurrencies. That is, there is an artificial shortage, which helps to strengthen the position in the market.
Currently, Ethereum does not use the auction model, it has been replaced by a base fee. This is a fee that is charged for performing a transaction and varies from block to block in the chain.
The factor that affects the price change is the workload of the blockchain. The larger it is, the more you have to pay for the transaction. However, EIP 1559 sets a change cap of 12.5% per block. Thanks to this feature, the volatility of the commission was significantly limited. Reward fluctuations have become smoother and more predictable.
There is also a gas limit. After the release of the update, its number can vary from 12.5 million to 25 million per block.
But the most controversial change is burning the base fee and paying miners only a premium on it. The developers motivated this decision by launching a self-regulating mechanism that limits emissions.
The features of the EIP 1559 update are such that the blockchain as a whole receives maximum benefits. It was liked by the majority of users. Only those of them who began to receive less profit for mining turned out to be dissatisfied.