The EIP-1559 upgrade will be a monumental moment in the history of Ethereum, helping it skyrocket to prices never seen before above $10k
Recently, Ethereum developers approved a proposal known as EIP 1559. Under it, a small amount of Ether will get burned every time someone uses it to cover the gas fees. As per recent estimates, the upgrades will likely come into implementation around July or August this year.
Once EIP-1559 comes into play, it will lead to a reduction in the amount of Ethereum in circulation currently. The reduction in the availability of Ethereum tokens will cause an upsurge in the prices of Ethereum.
The reasons are obvious as the demand for Ethereum is increasing regularly because of the growth in the volume of trade activity of NFTs and DeFi. And the EIP 1559 will make Ethereum more scarce in the face of the rising demand.
EIP-1559 & Ethereum Transaction Fees
Additionally, EIP 1559 will remove the dreaded inconsistency of Ethereum network fees. Today, users are relying on platforms like ETHGasStation to determine the transaction fees at the time of their transaction.
The upgrade will bring in an automated system to decide the fees of Ethereum transactions, making it comparable to the Bitcoin network.
There will be a fee component known as “BASEFEE,” which will fluctuate depending on the Ethereum network congestion. It will provide a market rate to users.
The current bull run has helped triple the Ethereum prices in a few months. But the downward slide in the prices of Bitcoin a week or so ago led to the negative pressure on the Ethereum prices. But it has been on an upward trajectory since the day the news about the new upgrade has become widespread. It would be interesting to see how EIP 1559 will impact Ethereum in real-time.
Do you think that the EIP-1559 upgrade will lead to Ethereum prices touching $10,000? Let us know in the comments below.