The highly anticipated Ethereum ‘London’ hard fork launched yesterday with five EIPs improving the network. What are those EIPs, and how will they improve the network?
Firstly, let’s talk about the EIP.
What is an EIP?
EIP stands for Ethereum Improvement Proposal, which is used to document improvements and changes of the Ethereum network. Also, the number after EIP signifies the number of proposed changes for the Ethereum network. Moreover, it is similar to the Bitcoin Improvement Proposals or BIPs.
Just like BIPs, anyone can propose an EIP within the community. With that aside, let’s talk about the EIP improvements in the Ethereum ‘London’ fork.
EIP Improvments in the Ethereum ‘London’ hard fork.
EIP-1559: Fee market change for Ethereum 1.0 chain.
EIP-1559 aims to solve the unpredictability of network fees. Now, users can choose between “fast”, “normal”, or “slow” bids for their transactions. This is similar to making bids to miner nodes.
Due to this, miners have incentives to act at the highest bid (“fast”). This results in crypto users paying a higher network fee for their transactions. But wait.. there’s more.
EIP-1559 also brings a minimum fee that is paid when a transaction occurs. This minimum network fee (base fee) changes based on the number of transaction requests handled by the network. There’s also the concept of incentivization through placing tips. But, miners can only keep the tips of the transaction.
It’s still a debatable issue whether EIP-1559 will reduce gas fees or not. But one thing is for sure, ETH gas fees are easily predictable now.
EIP-3198: Introduction of BASEFEE opcode.
The BASEFEE opcode returns the value of the base fee at the current block to EVMs(computers that run Ethereum clients). Now, smart contracts or DApps can get the value of the base fee immediately. Through this, DApps and smart contracts can improve their services.
EIP-3554: Difficulty Bomb Delay to December 2021 before Ethereum ‘Shanghai’ hard fork.
To encourage the network switch from ETH 1.0 Proof-of-Work (PoW) to ETH 2.0 Proof-of-stake (PoS), mining difficulty will not increase in the network till December 2021. This will make Ethereum mining less fruitful.
EIP-3554 aims to increase difficulty after the merging of ETH 1.0 and ETH 2.0. That will happen in the Shanghai upgrade in October 2021.
EIP-3541: Reject new contracts with the 0xEF byte.
With this EIP, new smart contracts 0xEF byte will be rejected. However, existing smart contracts with the same byte will remain as it is. Since implementing EVM Object Format (EVMOF), ETH clients can get confused between smart contracts that are or are not in EVMOF format. This proposal prevents that.
EIP-3529: Reduction in refunds.
Now, SELFDESTRUCT will apply on gas refunds, and this reduces gas refunds for SSTORE. Now, developers can efficiently write applications decreasing redundant codes and reducing storage. Also, when variable storage reduces, some part of the gas fee is refunded.