Ethereum's "London Upgrade" is ready, is the market realizing the benefits of the upgrade?

Original title: "When Ethereum's "London Upgrade" catches up with the market rebound"

Ethereum's "London Upgrade" is ready and is expected to be activated at block height 12965000. The official blog estimates the time to be between August 3rd and 5th. The Chinese community predicts that the upgrade will be activated at around 7 pm on August 5th.

Before this, it should be noted that users running nodes need to lock in the official blog again and update the client.

Stimulated by the positive impact of the approaching "London Upgrade" and the rebound of the crypto asset market, ETH has gradually emerged from the market gloom of more than two months. The highest price in 24 hours reached US$2,695, with a daily increase of 5.53% and a 7-day increase of 13.42%, which has performed better than BTC.

The outside world is paying so much attention to this upgrade of Ethereum because it is an important stage in the 1.0 era of Ethereum, and multiple proposals will bring about an improvement in network benefits after the upgrade. Among them, the EIP-1559 proposal to change the current main network fee of ETH 1.0 is particularly concerned, because objectively, this update will bring deflationary effects to the unlimited issuance of ETH.

The ETH staking campaign, which began in November last year in preparation for Ethereum 2.0, has had a similar effect. As of July 31, OKLink data showed that more than 6.47 million ETH were locked in ETH 2.0 staking deposit addresses, with a staking rate of 5.53%, both of which were record highs.

Client version updated before "London Upgrade"

The “London Upgrade” announcement released by the Ethereum Foundation on July 15 was recently updated. Developer Tim Beiko reiterated the upgrade time on the official blog and updated the version number of the client node.

“After the successful deployment of the testnet, the London upgrade is now ready to be activated on the Ethereum mainnet, where it will go live at block 12965000, expected between August 3 and 5, 2021.” It should be noted that in order to be compatible with the London upgrade, node operators need to update the client version they are running.

These versions are different from the previously announced versions that support the London upgrade on the test network. Node operators need to update their clients before the main network is officially upgraded. Among them, the OpenEthereum client will be deprecated after the London upgrade. "The OE team is working with Erigon to provide users with a smooth transition path." The download link of the new client is provided in the official Ethereum blog post.

Version changes of several clients

Based on the average block time of 13.5 seconds on the Ethereum network, the Ethereum Chinese community predicts that the "London Upgrade" will be activated around 7 pm on August 5.

The official Ethereum blog reminds that during the upgrade period, if ETH holders are using exchanges, web wallets, mobile wallets or hardware wallets, they do not need to do anything unless the exchange or wallet service provider they are using notifies them to take additional steps.

If you are a miner, then it is necessary to download the latest version of the Ethereum client and update the settings. Failure to upgrade will cause miners to stagnate on an incompatible chain that follows the old rules, and will not be able to send ETH or operate on the upgraded Ethereum network.

After the new client is loaded, miners need to manually set the gas limit target to twice the current value, because once the London upgrade is deployed, the block size will become twice as large as it is now, and EIP-1559 will keep the block capacity about 50% full. "For example, if you set the block size to 15m gas before the London upgrade, you will need to set the gas limit to 30m to maintain the same average number of transactions per block. If you do not modify the gas limit target at block 12965000, you will see a decrease in the block size in the network." The official blog provides specific APIs for each client that miners can use to update the gas limit target.

The rise in ETH 2.0 pledge rate implies future market expectations

The "London Upgrade" happened to occur during the recent market rebound, and ETH's growth surpassed BTC, indicating that the market is cashing in on this positive news.

As of 6:30 a.m. on August 2, ETH was quoted at $2,644, up 4.37% in 24 hours, 12.30% in the past 7 days, and 24.98% in the past 30 days. During the same period, BTC was quoted at $40,772, down 2.19% in 24 hours, 5.67% in the past 7 days, and 22.38% in the past 30 days.

ETH's strength reflects the market's expectations for Ethereum's "London Upgrade", which brings multiple proposals that affect the benefits of the ETH 1.0 network.

For example, the EIP-1559 proposal will improve the existing transaction fee mechanism. The basic fees paid by users will no longer be pocketed by miners, but will be destroyed, which objectively brings about a deflationary effect on ETH; the EIP-3529 proposal supports contract deployers to actively clean up contracts and obtain Gas refunds, which will reduce network congestion and improve network stability; in addition, EIP-3541 will reject new addresses starting with 0xEF bytes, laying the foundation for future upgrades; the EIP-3554 proposal will delay the difficulty bomb until December 2021.

The London Upgrade is not only a transitional solution to the pain points of the current Ethereum 1.0 network, such as high fees and frequent congestion, but also a preparation for the future upgrade of Ethereum to 2.0. As the upgrade approaches, the ETH 2.0 pledge data is also developing in a positive direction.

Last November, the Ethereum development team completed the preparations for the deposit contract for the 2.0 "reform", allowing users to stake at least 32 ETH to become verification nodes of the future 2.0 network. After staking, they can receive returns, but the withdrawal of ETH and profit settlement can only be executed after 2.0 is completed. Before that, users can only abide by the rule of "only staking, not withdrawal".

Even though the unlocking time is not clear enough and the conditions seem harsh, 2.0 staking activities have been on the rise so far.

The total amount of ETH2.0 pledged exceeds 6.4 million

OKLink data shows that as of July 31, the total number of ETH 2.0 staked has exceeded 6.4 million, accounting for 5.53% of the total circulation of Ethereum, and both indicators have hit record highs. At present, the total number of validators has reached 201,519. With the recent rebound in ETH prices, the total daily income of validators has risen to 1,116.87 ETH, with an average daily income of 0.0055 ETH. Analysts at JPMorgan Chase have predicted that the PoW to PoS transition of Ethereum 2.0 will increase the market for Crypto Staking to $40 billion, and exchanges such as Coinbase will profit from it.

The staking dynamics of ETH 2.0 have also been an important indicator for the outside world to observe the development of Ethereum and market expectations. Judging from the various staking data, the market's expectations for Ethereum are still increasing, and 2.0 is still an important node.

Keeping pace with the times is the brightest shining point of the Ethereum network. When problems such as network congestion, high fees, and energy consumption were criticized, the entire community, under the leadership of founder Vitalik Buterin, on the one hand, solved the key pain points of the 1.0 era by upgrading and expanding Layer2, and on the other hand, moved towards a complete solution to the problem - starting the road of "reform" from PoW (proof of work) to PoS (proof of stake).

What will 2.0 bring?

“I think in the next 2 to 3 years, we’ll see that using Ethereum will become cheaper, we’ll see more different kinds of applications using Ethereum, and the Ethereum ecosystem will become more interesting.” This is Vitalik Buterin’s answer.