The London upgrade and EIP-1559 was deployed on Aug 5, changing the way transaction fees are calculated while burning a portion of them. The upgrade was never intended to directly reduce fees but make them more predictable.
As explained by Ethereum solutions provider, ConsenSys, “EIP-1559 may lead to some reduction in gas prices if we assume that fee predictability means users will overpay for gas less frequently.”
Is gas fee stability a good thing?
A chart posted in the Ethereum subreddit by user “frank__costello” shows how the fees have stabilized and become less volatile in swings from low to high in the mid-ranges:
Before the upgrade, gas prices ranging between 20 and 100 gwei had greater variance and were more unstable than after London was deployed.
It was pointed out that the upgrade has not made gas cheaper (evident with this week’s spike) but has provided better certainty that a transaction will be included in the next block if the correct base fee is set.
Reddit user “Tenoke” pointed out that this may not be a good thing because there were more options to include a transaction at a lower fee which is shown by the dips below the 20 gwei level before EIP-1559 was introduced. Many people were happy waiting longer but paying less, “Tenoke” added, before declaring:
“Like it or not, the main feature of EIP-1559 was that a part of miner profits instead are now indirectly given to the whales via burning.”
As reported by BeInCrypto, the surge in transaction fees has increased the amount of the asset burned by the network pushing it over the 100,000 ETH milestone.
Ethereum price update
At the time of press, Ethereum prices were flat on the day at $3,125 according to CoinGecko. Resistance currently lies around $3,300 while there is strong support at $3,000.
Ethereum has gained 36% over the past month but remains 28.5% down from its all-time high of $4,357 made on May 12.