Expert opinions: Ethereum’s London hard fork is important but may be short-term fizzer
Link copied to
About 24 hours before Ethereum’s “London hard fork”, Stockhead grabbed a few industry-based views on the protocol upgrades’ potential impact.
The London hard fork is set to take place at Ethereum block 12,965,000, which will likely be mined around 10pm AEST on August 5.
The hard fork has been seeing plenty of hype recently on social media, particularly from YouTube influencers. If camping out for tickets to the event was a thing, ETH fanboys and fangirls might’ve been lining up for the past week forming a human blockchain.
But what the fork is the London hard fork again? It’s a series of five protocol updates on the Ethereum main net called EIPs (Ethereum Improvement Protocols).
— PocketBits (@PocketBitsIndia) August 4, 2021
Out of these, EIP-1559 is the “chosen one”, or at least the one that’s had ETH-loving cryptoheads buzzing for months.
And that’s because, from tomorrow evening, it means a portion of ETH will be burned with every transaction, effectively reducing the supply. This will turn ETH into a deflationary asset and see it potentially rival Bitcoin’s inflationary hedge narrative.
George Harrap, co-founder of Step Finance, a portfolio management dashboard for Solana, doesn’t think the event itself will have any particular immediate effects for Ethereum.
“EIP-1559 will happen, but I think it likely will not be some huge event that will be game changing,” he said.
“It certainly signals the direction Ethereum is taking. The old days of miners are coming to an end soon, as this is the first step towards Proof of Stake.”
On this subject, Stockhead also spoke to Red, the Community Foreman of Harvest Finance – an automated yield-farming aggregator platform. Like Harrap, he was somewhat downplaying the upgrades, but from more of a mainstream perspective.
“EIP-1559 might be the solution the ETH chain needs to begin solving its scaling and congestion issues, but overall it will likely have little impact to the mainstream still learning about this technology,” said Harvest’s pseudonymous community builder.
Jeff Prestes fielded this one. He’s a Senior Blockchain Engineer with Hermez Network – an open-source ZK-Rollup (zero-knowledge cryptography layer 2 scaling solution) optimised for secure, low-cost transactions on Ethereum.
“There’s been lots of hype around this upgrade, especially regarding EIP-1559, and I think much of it may be well-founded,” said Prestes, looking at the big picture.
“The London upgrade is the one of the most important releases for the Ethereum protocol. It will benefit users.
“Fees will be more predictable, and processing transactions will suffer fewer delays. This increased accuracy will translate into fewer failed transactions.”
Prestes does, however, think Ethereum has usability issues it needs to conquer.
“One of the biggest pain points for Ethereum is its current user experience,” said the Hermez engineer. “Better user experience will mean that more users are onboarded to the protocol instead of to competitors like Binance Smart Chain or Polygon.”
Harvest Finance’s Red agrees about the usability issues: “Ethereum must first overcome its UX and ease-of-use issues for it to really go mainstream.”
“A deflationary supply will of course benefit all token holders – from developers to miners to users,” said Prestes.
“According to some estimates, Ether’s supply inflation of about 4 per cent a year will be reduced as part of the fees paid by users being burnt instead of going to the miners. And any fears about miners not accepting the hard fork are easy to disregard – ultimately they’ll have to follow the users.”
“The structure of Ethereum will change because of this [upgrade],” said Harrap. “I don’t expect it to be a large event… but it’s important nonetheless.”
“Whether the upgrade results in increased usage of the [Ethereum] network or not, the current ecosystem of Layer 2 solutions like Optimism, Hermez or zkSync, among many others, will be there,” said Prestes. “[These will be] working and supporting the users and handling an increased volume of transactions.”
“EIP1559 is an important milestone. It’s just one of many things, though, that must be implemented before Ethereum reaches mass adoption,” Harvest’s Red concluded.