Ethereum - the world’s largest smart contracts blockchain is going through many changes and the results/consequences of those are likely to shape it’s future trajectory. By all indications, 2021 is a happening year for the Ethereum blockchain. What’s at play? EIP1559 has been deployed and already burning a lot of Ether tokens (proportional to activity of course), the merge is coming by the end of the year and Ethereum 2.0 development / deployment has accelerated. And then there’s Ethereum L2.
150,000+ ETHs Have Been Burned, Around $500M+
Since EIP1559 was deployed on Aug 05, it has burned around 150,577 ETHs (worth more than $513M) at the time of the publication. This is impressive because this is value that would otherwise have become selling pressure at the hand of the miners.
Ethereum has successfully completed it’s transition to a dis-inflationary network (reduced inflation) and is highly likely to go deflationary (more tokens burned than being produced) after the Merge event, which will see Ethereum completely transition to Proof of Stake (POS) and Proof of Work (POW) phase out.
EIP1559 Alleged To Cause High Fees
The fees on the Ethereum blockchain has been higher than usual, leading some analysts to comment that EIP1559 causes high fees, however that’s more likely coming from the recent NFT mania, which causes sudden spikes at times of mass-minting and trading.
It appears that certain segments of the community believed that EIP1559 was supposed to lower the tx fees on the network, which wasn’t the case. Instead, EIP!559 was designed to make the fees more predictable, something which it appears to be doing.
Polygon Acquires Hermez To Expand It’s Ethereum Scaling Line
Polygon is Ethereum’s favorite scaling solution. However, it has it’s share of criticism regarding security / trust assumptions. The highly capable Polygon team is rallying to fix that by executing the first ever multi million merger in crypto history with Hermez, as announced on Aug 13.
It’s worth over $250M in MATIC tokens, based on the rates at that time. The complete team, tech and tokens are going to merge together. Hermes specializes in ZK-Rollups based technology, cited as the missing piece of the puzzle in Ethereum scaling. Now, Polygon Hermez (after the Merger name) is going to add to the Polygon Full Stack Scaling solution.
Arbitrum Launches Approaches
Arbitrum is all set to launch on 01 Sep allowing thousands of Ethereum based DApps to seamlessly integrate and scale using Optimistic Roll-ups technology. It’s a big deal and Ethereum scaling is going to get a big boost from it.
Why is it important? Arbitrum is EVM compatible, offers low fees and high throughput. It’s truly decentralized and operates without trust assumptions. Since it's a true L2 solution, Arbitrum doesn’t have any token besides ETH. It also satisfies the criterion of not being able to function without the Ethereum blockchain itself.
Hop Protocol Lowers Optimism L2 Withdrawal Time To Ethereum Base Layer
Ethereum is the cradle of composability with different components integrating with each other to fulfill the vision of the world’s computer. Hop Protocol now offers a direct bridge from Optimism to the Ethereum base layer and other EVM compatible chains, by reducing Optimism's former withdrawal time of 1 week.
The L2 of Ethereum is really coming along and users might see the network becoming economical again for the average users in the near future. That’s it from outside, let’s see you next week with more interesting happenings from the crypto industry.
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