After what looked like neverending discussions, the highly-rumored Ethereum London upgrade has finally happened on the network, bringing the token more and more closer to its status as a deflationary asset.
As expected, the hard fork arrived almost on schedule this Thursday, at 12:33 pm UTC, at block height 12,965,000. Now, with the upgrade in place, the network’s transaction fee market, as well as important parameters like gas refunds, will undergo significant overhauls.
What will change?
U”nder the Ethereum Improvement Proposal (EIP) 1559, each and every transaction on the network involves burning the base fee. This means that the circulating Ether supply will automatically decrease.
As expected, many important exchanges, like Binance, announced that a temporary pause to both deposit and withdrawing on the Ethereum newtwork will take place, due to the hard fork.
Obviously, there were many rumors about this move being able to transform Ether into a deflationary asset, considering that each transaction will basically remove from circulation a small portion of the total coin supply.
Becoming “ultrasound money”
Ethereum co-founder and ConsenSys founder Joseph Lubin described this upgrade as essential, marking a big step in the token’s journey to become “ultrasound money”.
Technically speaking, the London upgrade, as well as the activation of EIP-1559 is a mile marker in the transition to Ethereum 2.0. This will move the network from its current proof-of-work consensus to a proof-of-stake one.
Finally, we should also mention the overall enthusiasm regarding the upgrade from a financial point of view. It’s no surprise that a steady price increase was registered today, with one token surpassing $2,700 at the time of writing, taking ETH at its highest price level since early June.
We shouldn’t forget though that the historical maximum was reach back in May, right before the crash that caused BTC’s 50% loss, when one Ether token was trading at $4,200.