Measuring the effects of the London hard fork

The much-talked-about Ethereum hard fork finally went live on Aug. 5 after block 12,965,000 was mined. Dubbed “London,” the software upgrade will bring together significant alterations in Ethereum’s code. Overall, the code changes target improvements to the network’s transaction fee market, user experience and much more.

London comes with five Ethereum Improvement Protocols (EIP), with EIP-1559 garnering the most attention due to the impact on transaction fees and miner revenue, which initially caused miners to push back, raising concerns over the protocol consensus and a potential chain split.

EIP-1559 was originally proposed in April 2019 and underwent testing back in June prior to the launch. What’s most pressing about EIP-1559 is that it’s primarily geared toward improving Ethereum’s transaction payment system. Before the upgrade, most users faced uncertainty, as Ethereum network transaction fees can be volatile and potentially spike to hundreds of dollars per transaction. EIP-1559 is unlikely to substantially decrease transaction costs, as it’s more of a scalability issue. However, it aims to reduce transaction fee volatility and delays.

EIP-1559 transaction fees, base fee and tipping miners

The upgrade introduces a fixed-price sale mechanism with a base fee and tip rather than a single gas fee. Miners receive the total transaction fee minus the base fee, which is burned. This base fee is a known value calculated for each block and adjusts according to a target block size. Users can also send an additional tip to miners on top of the base fee to prioritize their transactions.