After weeks, months, even years, since the initial announcement, the day that so many Ethereum adopters have been waiting for has nearly arrived. The London hard fork is anticipated to take place in about a week.
The much-discussed London hard fork is likely to launch on August 4, 2021, between 9 AM ET and 1 P.M. ET, according to several recent reports. The update includes five Ethereum Improvement Proposals (EIPs) designed to counter various inefficiencies on the network.
Why is the change so hotly anticipated? What are the EIPs, and what could they mean for users? And perhaps most importantly, what’s happening on-chain in the run-up to the update?
We’ve got the answers.
What Is the London Hard Fork?
Let’s start with the basics. The London hard fork for Ethereum is part of the Ethereum 2.0 roadmap. This calls for the current proof-of-work protocol to be replaced with a proof-of-stake alternative designed to be more efficient and easier to use.
That means that August 4 will bring us all closer to the roll out of ETH 2.0. That’s big enough news in its own right.
The change from proof-of-work to proof-of-stake has been a highly anticipated transition for years now. Proponents have their eyes on increased scalability, which could to lower fees and faster transactions.
Many also believe that switching to proof-of-stake could be a major reduction of energy usage, which could help make Ethereum more sustainable, answering a major criticism of the protocol. Ethereum 2.0 will also bring updates to scalability and security.
How Will the London Hard Fork Impact Ethereum Users?
The London hard fork will also bring about some more immediate changes in the form of EIPs. There are five total, but the most important are EIP 1559 and EIP 3554.
EIP 1559 is designed to make Ethereum less inflationary (ultrasound money, anyone?). It does so with a highly-controversial fee structure that aims to burn part of the fees, decreasing miner revenue along the way — hence the controversy.
EIP 3554, while far less controversial, is another important improvement. It would delay the network’s so-called “difficulty bomb” to Dec. 1 of this year. The “difficulty bomb” is designed to slowly but surely increase the difficulty of mining on ethereum. This should, according to proponents, effectively halt proof-of-work protocol in favor of the aforementioned proof-of-stake replacement.
What’s Happening On-Chain?
As the London hard fork date approached, and with it excitement for ETH 2.0 increased, users’ enthusiasm for these improvements could be seen on-chain.
As we can see in the graph below (provided by Flipside data scientist Connor Higgins), ETH deposits to Ethereum 2.0 have spiked several times in the past three months. These spikes largely follow patterns regarding the price of ETH — when the price goes down, deposits go up, as happened on June 22, the largest spike in roughly three months — or social media trends regarding the asset.
What about the behavior of users once they’ve staked that 32 ETH and become ETH 2.0 validators? Well, according to Higgins, they’ve so far been on their best behavior. Despite more than 200,000 validators currently operating, there have only been about 200 slashing events, with the most recent happening nearly a month ago (28 days to be exact.)
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