After the London upgrade was implemented on the Ropsten testnet last month, ETH grew by 11 % over the weekend
The price of Ether has risen 11% over the weekend, reaching a two-week high of $ 2,396 yesterday. Over the past week, the cryptocurrency has even been able to grow by 17%.
A likely driver of this dynamic is the London upgrade. In April, the Berlin hardfork was introduced, which began to adjust gas prices.
The London hardfork consists of five improvement proposals for Ethereum, namely EIP-1559, EIP-3198, EIP-3529, EIP-3541 and EIP-3554. These make important changes to the protocol’s transaction fee model and adjustments to its consensus mechanism.
EIP – 1559 proved to be particularly controversial. Designed by a team of developers that includes Ethereum co-founder Vitalik Buterin, EIP-1559 proposes a new pricing mechanism for transactions. Some welcome this as they hope it will reduce the rising Ethereum gas fees seen this year.
For some miners, however, the proposal landed less well, as they could receive fewer fees. While users currently pay for transaction fees by making a bid, the new system creates a basic fee for each block that is burned. This puts deflationary pressure on ETH issuance, which could increase the value of the cryptocurrency.
Another major change in the London update, EIP-3554, delays the Difficulty Bomb. This point is reached by the Ethereum mining difficulty, when mining a new block takes so long that it is hardly profitable for the miners. You then have no choice but to switch to ETH2. This point would have arrived too early. The proposal delays the Difficulty Bomb until at least December this year, possibly longer.
All this is part of the transition from Proof of work to proof of stake, through which the network could consume up to 99.95% less energy.
The London upgrade was implemented on the Ropsten testnet on June 24. Once the Goerli and Rinkeby testnets have been successfully forked, the Ethereum mainnet will be updated. This is expected to happen in mid-July. All these developments seem to increase buying pressure for Ethereum: last week Ethereum counted more daily active user addresses than Bitcoin.