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Transaction fees reduced by 2/3 after London hardfork

 


Transaction speeds on the Ethereum network have doubled since the London hard fork on August 5.

With the fork enabled, the gas limit was doubled from 15 million to 30 million gas units. This means that the Ethereum blockchain can now handle twice as much workload as it was before the mainnet upgrade.

In terms of gas prices, comparing three days before and after the fork, gas prices increased 14% for medium-speed transactions.

However, the average transaction fee has dropped by more than 66%. The most likely explanation for this is that many users choose a lower priority (meaning low fees) when transacting.

Since EIP-1559 plans to have each block on average only half full, that means even low-priority transactions end up being included in a block. In fact, since about May 2020, every block is completely filled.


Another feature of EIP-1559 is that a large portion of gas fees will be burned instead of distributed to miners. Therefore, there are currently about 4,200 ETH being burned every day.

Compared to the approximately 13,500 ETH paid to miners daily prior to the hardfork, this is not enough to make Ethereum a deflationary cryptocurrency, but it will be enough to make a significant impact on the price appreciation. 


Despite the above benefits, EIP-1559 is controversial because it puts miners at a disadvantage. Indeed, the total daily mining revenue has dropped by 16.5% since the fork activation.

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