A new era has dawned for Ethereum — but users who were hoping that EIP-1559 would make the network deflationary or cause a dramatic reduction in gas prices have been left disappointed.

At least one deflationary block had been mined since the London hard fork went live last night, but for the most part the block rewards were outweighing the fraction of transaction fees that were being burned as part of the long-awaited EIP-1559 (Ethereum Improvement Protocol No. 1559)

An Ethereum block is produced roughly every 13 seconds, with two ETH being created as a reward to its miner. Between about 0.07 and 1.1 ETH were being destroyed with each block when a reporter “watched the burn” this morning.

In the span of 303 blocks over about an hour, 160.51 ETH was burned – but 606 new ETH had been produced. That means the upgrade has made Ethereum less inflationary, not deflationary.

In the half-day since London went live last night, more than 3,300 Ether — around A$12.5 million worth — had been burned.

Gas fees hadn’t budged much, averaging about 39 Gwei, or A$3.75. That means a complex transaction — such as adding or removing liquidity on Uniswap — was costing users as much as A$30 or so.

EIP-1559 is highly technical and some had tried to warn beforehand that it wouldn’t reduce gas prices, a source of frustration for many Ethereum users. Alternatives like Binance Smart Chain and Polygon have flourished basically because transactions are much cheaper on those platforms.

According to Ethereum developer Tim Beiko’s willeip1559lowergasprices.org, the upgrade was never intended to lower gas fees.

“One counterintuitive aspect of EIP-1559 is that it will not significantly lower gas prices on Ethereum… That being said, 1559 does improve the accuracy with which users can estimate gas prices.”

Beiko seemed happy with the upgrade on Twitter, posting that users would be able to take advantage of the features of EIP-1559 once wallets such as the popular Metamask interface update their software.