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The Ethereum community is eagerly awaiting the Proof-of-Stake protocol to take effect and resolve scaling issues on the network. Despite the history of delays with each leg of implementation, developers have assured that the London Hard fork will be launched on time.
In an interview with the Chinese media outfit, Wu Blockchain, developer Tim Beiko said,
“…the only cause that could lead to the delay would be security concerns. However, until now the team did not have any such concerns and the London upgrade will be activated on the Ethereum mainnet between 3-5 August on block 12,965,000.”
What to expect when the London upgrade goes live?
Well, it is no news that that EIP-1559, a part of the London upgrade, would reduce the income of miners. However, the miners clarified,
“First, EIP-1559 removes part, but not all, of the transaction fees that go to the miners.”
Instead, each block will have a unique “baseFeePerGas.” This is the minimum gas price that users must pay in order for the transaction to be valid. This “base Fee” multiplied by the amount of gas used in the transaction will be consumed. Transactions will, however, include a “priority Fee” that goes to the miners.
This fee, the developers explained, was similar to a “tip,” and it compensated miners for the increased risk of their blocks being uncled, or removed from the canonical chain, when they included transactions.
Additionally, users who want their transactions to be included as the first transaction in the blocks will pay Miner Extractable Value [MEV]. This feature was being actively used, as the developers noted that approximately 60% of blocks now have MEV transactions, compared to close to 0% at the start of the year.
What about miners’ profits?
Even though miners were not completely out of work, some were looking for alternative sources of income. However, the profitability of miners was influenced by a number of factors. These include network demand, hash rate, and Ether price, as miner revenues were mostly in fiat rather than ETH.
In the future
Nonetheless, the road to 2.0 was not easy or quick. Following the London hard fork, the ETH 1.0 and 2.0 mergers were only scheduled for late 2021 and early 2022.
As per the developer Hsiao-Wei Wang,
“*IMHO* merging in early 2022 is more feasible to be confident of finishing the required testing in time. Security is always the top 1 priority, and we definitely would not rush into it.”
As previously stated, security has remained a primary concern for developers and was also listed as one of the challenges of transitioning to PoS. The team was attempting to address other issues such as UX, governance and education communication, and the implications of their current specifications.
Competitors picking up the slack
While the timeline for ETH 2.0 has been altered due to bugs or other factors, the crypto space has always been about challenging existing systems. Given Ethereum’s high fees and slow transactions, projects like Binance Smart Chain and Polygon have emerged as competitors. In fact, the Ethereum network problems boosted Polygon’s adoption, but developers were unconcerned about the “competition.”
“As people involved in core development of Ethereum, we try to focus on our core strengths and not get distracted by worrying about “competition.” Developers and users are free to build / use whatever they like. We will continue to develop Ethereum to be robust and secure for the projects / users it has.”
Beiko and other Ethereum developers remained primarily focused on the Layer 2 protocol, which aimed to provide users with more secure and trustless functions such as sidechains or other L1s.
Because the exact ramifications of the London upgrade are unknown, miners, developers, and users will all have to wait until early August for the launch. Meanwhile, investors can rejoice in ETH’s 20% recovery over the last three days. ETH was trading at $2,062 at the time of publication.