Ethereum is on the road towards becoming a deflationary asset following the long-awaited London hard fork. At the block height of 12, 965,000, the London hard fork went live.
The fork was scheduled at 12:33 PM UTC bringing in the Ethereum Improvement Proposal (EIP) 1559. Ethereum network is now set to have some changes in terms of gas refunds and the fee market. The base fee will be burnt upon each ethereum transaction under EIP 1559. This will decrease the circulating supply of ethereum in the market.
Due to London hard fork, Binance and multiple other exchanges temporarily stopped the deposit as well as withdrawal on the ethereum network.
Also Read: Etherum Hits $3,000
The removal of ethereum from the market upon each transaction will make the coin a deflationary asset. The deflationary assets increase in value with time as their supply is controlled through burning.
According to the co-founder of the ethereum network, Joseph Lubin, London Upgrade is taking Ethereum to the road of becoming ‘ultrasound money‘.
The next change in the Ethereum network will come with Shanghai hard fork which is set to happen later this year. Crypto analysts expect more overhaul in the working of the network with the next upgrade.
Ethereum network is slowly ushering into Ethreum 2.0. London hard fork is a milestone in this journey. Ethereum 2.0 will be a transition of the network from proof of work consensus to proof of stake consensus. This will resolve the scaling issue on the network.
Ethereum is the second biggest cryptocurrency according to market capitalization. The new London hard fork brought a surge in the price of the currency. At the time of this writing, Ethereum’s spot trading price is at $2,700. In May, the price of Ether crossed 4,200. However, the subsequent 50% crash in bitcoin price dragged down the value of ETH as well.