London / TickerInsider / August 15, 2021 / London Hard Fork contains EIP-1559 which will change the Gas fee structure of the Ether mainnet and introduce a destruction mechanism for the ETH token model, while EIP-3529 will directly affect the Gas Token failure on Ether after the upgrade.
Shanghai Hard Fork may realize the merging of ETH1/ETH2 and completely change the consensus mechanism of the Ethernet mainnet, while the token supply issuance model of ETH has also changed.
For this London Hard Fork, some of the EIPs involved may have a high threshold of understanding for new users, so before going deeper into each EIP, let’s briefly outline the possible impacts of this upgrade.
EIP-1559 can make the future Ether Gas handling fee more predictable and stable, while nearly half of the network handling fee in the future Ether network may be directly destroyed. Although the current market is relatively low, the destruction of ETH has a profound impact on the long-term value support of ETH in the future, especially in the future after the transition of Ether to PoS, under the premise of the prosperity of the Ether ecology, the network In particular, after the transition of Ether to PoS in the future, and on the premise of the prosperity of the Ether ecosystem, the ETH processing fee from the destruction of ETH can even offset the new ETH tokens issued by the network, driving ETH into the deflationary era.
EIP-3529 will affect users holding Gas Token (e.g. CHI, GST2), so it is recommended to sell them before the upgrade or use them up when the Gas fee is high, otherwise, such Gas Token will theoretically go to zero after the upgrade.
EIP-3554 is mainly related to miners, and the difficulty bomb is postponed to December 1, 2021, or the deadline for Ether Pow miners.
Below, we will talk about the relevant time points and EIP in London Hard Fork in detail, and we will learn more about this London Hard Fork together with you.
In the previous Ethernet developer core conference call, the developers tentatively set the London Hard Fork on the main Ethernet network for July 14. However, the exact time will depend on the status of London Hard Fork on each Ethernet test network at that time. According to the announcement on the official blog of the EtherFoundation on June 18, the specific upgrade time of the main Ethernet network will be determined after all the test networks have successfully completed London Hard Fork. Currently, the upgrade plans for each test network are as follows.
-Ropsten: June 24, block height 10,499,401
-Goerli: June 30, block height 5,062,605
-Rinkeby: July 7, block height 8,897,988
-Kovan: undetermined, probably after the mainnet upgrade
According to London Hard Fork’s specification document, this upgrade includes five major EIPs, which are
EIP-1559: Changing the Gas fee structure of the Ethernet mainnet and introducing a destruction mechanism for the ETH token model.
EIP-3198: Added BASEFEE opcode.
EIP-3529: Removed Gas refund for SELFDESTRUCT opcode and reduced Gas refund for SSTORE opcode, which directly affects Gas Token invalidation on Ether after upgrade (CHI & GST2).
EIP-3541: Reject new contracts starting with 0xEF bytecode.
EIP-3554: Difficulty bomb postponed to December 1, 2021, or the deadline for Ether Pow miners.
Below, we take a closer look at each EIP individually.
EIP-1559 is the star of this upgrade and one of the most noteworthy changes in the history of Ether.
In short, EIP-1559 changes the current Gas fee mechanism of the Ethernet main network, which is a high price priority, and uses the Gas fee structure of “basic fee” + “miner’s tip”, which can effectively achieve the stability and predictability of the network Gas fee. The gas fee structure of “base fee” + “miner’s fee” can effectively achieve the stability and predictability of network gas fee. At the same time, the block size will have an elastic cap, and the base fee will be automatically adjusted according to the utilization of block space.
Specifically, the current Gas quotation mechanism adopted by the Ethernet network is the first price auction mechanism, which gives priority to transactions with high Gas Price quotations. Although this mechanism has a low threshold of understanding and is simple to operate, its biggest problem is that it is difficult to estimate the Gas cost, especially during the peak trading period, which often triggers the Gas auction and rapidly raises the Gas Price. The EIP-1559 achieves a stable and predictable Gas Fee by introducing a Gas Fee structure of “Base Fee” + “Miner’s Tip” and a flexible block size cap that changes dynamically according to demand.
For users, there is no need to worry about setting the base fee, as the base fee setting protocol is automatically adjusted based on the utilization of block space in the network.EIP-1559 has a long-term target of 10 million Gas per block and a new hard cap of 20 million Gas per block. When block sizes fall below the target, the base fee is reduced to stimulate demand for transactions. When the block size exceeds the limit, the base fee increases to discourage demand for transactions. While the base fee is set automatically by the network, there are two additional parameter values that the user needs to configure when submitting a transaction: “miner tip” and “total fee cap feeCap”.
Miner’s tip: Users need to set their miner’s tip only in congested states with block sizes above 20 million Gas hard tops, when miners will prioritize transactions with high miner’s tip offers.
Total fee cap feeCap: represents the maximum fee the user is willing to pay for this transaction (i.e. base fee + tip). When the network is extremely congested, the base fee will be very high, then the transaction with the total fee cap feeCap set and also lower than the current base fee will be Pending, so you can wait for the base fee to drop in the future and wait for the miner to package the transaction.
Meanwhile, perhaps the most anticipated feature of EIP-1559 is the destruction of the base fee, which has a number of far-reaching implications.
The introduction of a destruction mechanism for the ETH token model can effectively reduce the inflation rate of ETH tokens, and in the future, with the help of the main network transition to PoS, ETH may even enter the era of total deflation.
Technically speaking, the current network transaction fees do not necessarily have to be paid with ETH, users can use any token to pay transaction fees to miners through meta-transactions, while MEV is currently prevalent and many MEV transactions do not require any payment, and miners get paid in packages through MEV. With EIP-1559, the base fee for each transaction is denominated in ETH and will be destroyed, thus solidifying the utility of ETH as a fee token and maintaining its currency premium properties.
EIP 3198 is a companion EIP to EIP 1559, which adds only the opcode BASEFEE, which returns the base fee value of the block in which it is located, so that the smart contract can obtain the base fee value on the chain.
EIP-3529 is another major change in the London Hard Fork, the immediate impact of which is that the Gas Tokens on Ether (currently 1inch CHI and GasToken GST2) will be disabled after the upgrade is completed.
Let’s not explain the changes included in EIP-3529 for now, but let’s first understand Gas Tokens.
Gas Tokens are essentially a tokenization of Ether block capacity rentals; Gas Tokens take advantage of Ether’s storage refund mechanism, where users mint Gas Tokens by saving data to the GasToken contract store, and then send Gas Tokens out for destruction, releasing the previously saved storage elements, and the resulting Gas refund can be used to The Gas refund can be used to offset the cost of Gas for new transactions.
The current Gas Refund feature is intended to incentivize developers to clear state when possible, but in practice Gas Refunds instead lead to an increase in state size after Gas Tokens become available.
Therefore, EIP-3529 will remove the gas refund for the SELFDESTRUCT opcode and reduce the Gas refund for the SSTORE opcode. Since most GasToken contracts are currently destroyed by invoking the SELFDESTRUCT opcode, the Gas Token mechanism will no longer be effective after the upgrade.
Therefore, EIP-3529 will have a significant impact on Gas Token holders. Theoretically, the price of Gas Tokens is bound to go to zero after London Hard Fork; therefore, it is currently either to sell Gas Tokens before the information is still asymmetric or to use up the Gas Tokens held before the upgrade, but the current mainnet Gas fee is so cheap that it is theoretically inefficient to use Gas Tokens in transactions to offset the Gas fee. For example, for CHI, it is better to use CHI with more than twice the Gas cost of casting CHI in order to better offset the Gas cost.
For the average user, EIP-3541 is of little concern as it is more of a developer related EIP.
EIP 3541 is a simple change that sets the stage for the proposed EVM improvements to EIP 3540. Once EIP 3541 is implemented, new contracts starting with the 0xEF byte code will not be deployed. Existing contracts will not be affected. When the “London” upgrade is initiated, deployments of contracts whose shortest bytecode sequence begins with 0xEF but does not match the starting sequence of existing contracts will be rolled back to identify contracts that are compatible with EIP-3540 semantics. Please note: EIP 3540 requires a separate network upgrade deployment. Also note that if EIP 3540 is not deployed, EIP 3541 can also be used to reserve starting bytes for other scenarios.
EIP-3554 is intended to delay the Difficulty Bomb to December 1, 2021 for inclusion in Shanghai Hard Fork, after having been delayed three times during Metropolis (EIP-649), Constantinople (EIP-1234), and Muir Glacier (EIP-2384).
The purpose of Difficulty Bomb incorporated into Shanghai Hard Fork is to allow Ether to smoothly transition from PoW to PoS mechanism. After the introduction of Difficulty Bomb, mining will become more and more difficult, and this difficulty value will start to rise exponentially at a certain block height as the block height increases, increasing mining difficulty dramatically for a short time, i.e. Difficulty Bomb explodes and enters the Ice Age, forcing all miners to abandon the old chain in order to complete the transformation of Ethernet PoS.
It is currently expected that the main Ethernet network will merge the current PoW network and beacon company in Shanghai Hard Fork in December and adopt PoS, which also means that Ethernet PoW miners can still dig at least until December, depending on the execution time of Shanghai Hard Fork.
EIP-1559 destruction preview
The destruction of the EIP-1559 fee in this London Hard Fork is the most anticipated part of the Ether community. The destruction can effectively reduce the inflation rate of ETH tokens, and in the future, with the help of the main network transition to PoS cooperation, ETH may even enter the era of total deflation.
At present, some developers in the Ethernet community have already created an ETH fee destruction visualization site http://watchtheburn.com/ based on Calaveras, an Ethernet developer network, to prepare for the future visualization of ETH fee destruction data on the main network. 700 ETH.
Meanwhile, there are also community members simulating the cumulative amount of ETH that will be destroyed by the implementation of EIP-1559 in the past year, which is close to three million ETH.
Even though the trading activity on Ether is relatively low recently and the network fees have dropped significantly, we believe that the prosperity and activity of the future ecology of Ether is inevitable, and the prosperity of the future ecology is bound to directly affect the value and price of ETH through the destruction of ETH handling fees. Although some community users may wonder whether the prevalence of Layer2 will lead to a decrease in the total network fee in the future, it is impossible to draw a conclusion at this moment, because this relationship will probably present a dynamic balance in the future. Another order of magnitude.
The community’s long-awaited Ether London Hard Fork is coming soon, and it will debut on June 24 on the Ropsten test network.
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