Earlier this year, the Ethereum network underwent an upgrade known as the London upgrade of the London hard fork upgrade. The main ingredient of this upgrade is Ethereum Improvement Proposal (EIP) 1559, a proposal regarding the adjustment of transaction fees (also known as gas fees). This upgrade also includes a burning mechanism for this coin.
This hard fork upgrade went live on the 5th of August 2021. Most are considering this upgrade very successful although Ethereum’s gas fees are still extremely high from time to time. Since this upgrade went live, more than 1.15 million Ethereum have been burned. With its current price of $4,198 per coin, the burned coins amount up to $4.81 billion.
— IntoTheBlock (@intotheblock) December 9, 2021
Ethereum has been the second-biggest cryptocurrency for many years. Because of all the traffic its network has, transaction fees tend to get extremely high from time to time. Usually, people pay just one transaction fee for transactions on the Ethereum network.
The fee one pays for its transaction to be added in a block is known as the base fee. Nevertheless, there are people who want to speed up their transactions. These people must also pay a fee called the priority fee. The latter is used to incentivize miners (Proof-of-Work) to choose a specific transaction over another one.
EIP 1559 was supposed to lower Ethereum transaction fees by implementing a +-12.5% base fee per block. Whether the base fee is higher or lower would depend on the demand for the prior block.
The Price of Ethereum in 2021
Ethereum started the year 2021 with a trading value of $730. Nonetheless, this coin reached a new all-time high of $4,168 on the 11th of May. Afterward, the whole market underwent a correction that left Ethereum trading at around $2,300 per coin.
Around the time when the London hard fork went live, Ethereum was trading at $2,800. In early November, Ethereum set its current all-time high of $4,859. Today, this coin has a trading value of $4,184 and a market capitalization of $500 billion.