Ethereum’s EIP-1559: Fee Reduction a Hoax?

The actual aim of the highly-anticipated EIP-1559 may have been misunderstood by millions of Ethereum lovers and crypto enthusiasts around the globe. Three weeks ago, the EIP-1559 scheduled as part of the London Hard fork was deployed on the network bringing the long wait to an end. Before the EIP-1559 launch, users of Ethereum-based decentralized exchanges suffered the challenge of costly transaction fees, especially during periods of traffic.
However, the true purpose of the EIP-1559 has been revealed just a few weeks after its launch much to the disappointment of Ethereum proponents. According to reports, the upgrade was never geared toward introducing fee reduction on the network, but to make fees more predictable. Ethereum solutions provider, ConsenSys shed light on facts. As per ConsenSys, fee reduction may likely be the aim of the improvement proposal if it is assumed that users will have to pay high gas fees at intervals.
Fee Reduction vs. Fee Stability
In light of the above explanation, EIP-1559 proposes fee stability rather than an outright fee reduction. Still, is fee stability or predictability a good thing? A chart shown by a redditor on Reddit’s Ethereum community reveals that fees have become stable and volatility has reduced from ground level to peak and now ranges in the middle.
Prior to the deployment, gas fees were fluctuating highly between 20 and 100 gwei, and were more unstable than after the integration of the London Hard fork. As indicated by the latest spike in fees, the upgrade has not made gas prices any cheaper, but only provides the assurance that if the right base fee is chosen, it is certain that a transaction will be included in the succeeding block.
Meanwhile, another reddit user going by the pseudonym, Tenoke, argued that this may not be a good thing because before the launch of the EIP-1559, users could actually set a lower fee of their preference below 20 gwei. The difference is that they had to wait longer, but many people had no problem with this, according to Tenoke.
EIP-1559 Tilts Toward Fee Burning Than Reduction
Tenoke added that the main purpose of the EIP-1559 is the deflationary mechanism, which burns the base fee attached to every transaction. Apart from being a precursor to ETH 2.0, a Proof-of-Stake version of the blockchain, this will also reduce the circulating supply of Ethereum since there is no supply cap. Available data puts the already burned fee at over 100,000 ETH following a surge in activities on the network, spearheaded by transactions relating to decentralized finance and non-fungible tokens (NFTS).
As of press time, Ethereum is trading at $3,228 having gained almost 4% on the day. Resistance is at the $3,300 zone while support is at the $3,000 price mark. Despite gaining 36% since the last month, Ether is still trading below its May all-time high of $4,357 by 29%. The next bull run is expected to tip the price of the largest altcoin beyond $6k.
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