The new EIP-1559 update is now burning more Ethereum from the network, what will the implications be?
The Ethereum London Hard Fork has gone live and it has hit the ETH market hard and fast. The price of ETH spiked 17% from this time last week. This follows closely with the previous Berlin Hard Fork which saw Ethereum explode to it’s All Time high price.
If you haven’t read the basics of Ethereum London Hard Fork, you can read it here.
Does this mean it’s only the beginning? We’ll take a deep dive into why the EIP-1559 is causing both an uproar and excitement for the cryptocurrency community.
Feel The Burn With EIP-1559
What on earth is EIP-1559? EIP stands for Ethereum Improvement Proposal, the new update is made of 2 parts which are making a huge impact on the Ethereum Market.
The first part will change how gas fees work which should allow for cheaper Ethereum transaction fees, and the second part (and the part which is making waves in the market) is that it will burn these fees instead of giving them to ETH miners as a reward.
It’s estimated that 1-2% of the whole supply of ETH will be burnt each year. Burning simply refers to removing crypto from the market indefinitely. Since the update went live, 3000 ETH has been removed from the market at an estimated value of 11.4 Million Dollars.
It doesn’t sound like much but that means approximately 3 MILLION ETH will be removed from the Ethereum Market, each year.
Removing Ethereum from the market through this update will increase the scarcity of ETH, so what happens when there’s less of a highly demanded product in the market every year?
Looking back at our Economics textbook, this means that product value will appreciate over time because there’s less supply and higher demand. But that’s just us looking at basic economic theory, there’s a lot of factors that drive the price of crypto on the market so the only thing we can do is sit back and watch the Ethereum show play itself out.
Zipmex investors are very excited about this new development and the market is on a strong uptrend. If you’re considering buying Ethereum, Zipmex provide a feature-rich Australian Trading platform where you can buy ETH easily.
You can also earn interest on your Ethereum with ZipUP, which is Zipmex’s interest-bearing product. There’s no lock in contract, no minimum deposit and you can withdraw any time you want. ZipUP allows Zipmex investors to earn up to 14% interest on crypto and is widely popular with our customers.
You can read all about it here.