Why Polygon Will Implement Ethereum’s EIP-1559 Update
January 18 2022 - 1:00PM
NEWSBTC
Ethereum’s scalability solution Polygon will implement this network
update in its fee model via EIP-1559. According to an official
post, this upgrade will introduce a burning mechanism for MATIC and
will improve its fee visibility. Related Reading | Polygon Expands
Its Footprint As Evolving NFT And Gaming Ecosystems Seek Ethereum
Alternatives Ethereum introduced EIP-1559 with Hard Fork London
back in 2021. The update was highly anticipated as it was supposed
to aid mitigate Ethereum’s congestion issues and made fee more
predictable. Some users even claimed the update was going to
significantly reduce Ethereum fees which has proven to be false.
However, as seen below, data from Messari suggest that fees on
Ethereum have actually increased since the implementation of
EIP-1559. At least in a one-year period and comparing the period
pre-London, and the posterior months. According to Polygon, their
team is got ready to roll out the update today January 18th. As the
post claims, EIP-1559 changed Ethereum’s first-price auction model
for fee calculation to establish a fixed fee to include a
transaction on a block. This base fee can vary and its burn once
the transaction has been validated. The post explained: The burning
is a two-step affair that starts on the Polygon network and
completes on the Ethereum network. The Polygon team has created a
public interface where users can monitor and become part of the
burning process. The team behind Polygon will publish a link to the
monitor at a later time. As seen below, users will be able to see
the amount of MATIC that has been burned and watch the burning
process live. Polygon To Improve Fee Mechanism, Will EIP-1559
Deliver On Its Promise? The team behind Polygon claims users,
validators, delegators, and everyone on the MATIC ecosystem will
benefit. A burning mechanism will contribute with the token’s
appreciation as it creates deflationary pressure on its supply.
Some experts believe EIP-1559 was one of the reason for ETH’s price
year of continuous appreciation and its bullish momentum. Others
have expressed disappointment; they believe the issues present on
Ethereum, allegedly to be fix by this update, persist. The inventor
of Ethereum Vitalik Buterin recently defended EIP-1559. Based on a
study conducted by two major academic institutions, Buterin claimed
this update has achieved its objective of decreasing average
waiting time to process transactions on the network. Excellent
paper by some researchers at Peking University and Duke University
on the consequences of EIP 1559. Particularly appreciate the
confirmation that EIP 1559 has greatly decreased average waiting
times for transactions.https://t.co/2rvzx93Yar
pic.twitter.com/nPtnAJNle9 — vitalik.eth (@VitalikButerin) January
17, 2022 In an interview for NewsBTC, the co-founder of the
non-profit organization Aleph Zero, Adam Gagol, talked about the
MEV problem on Ethereum, its impact on the fee cost for users, and
the advantages and tradeoffs of EIP-1559. Gagol told us: (…) the
EIP-1559 implementation in London upgrade made the problem even
worse. Although it put mechanisms in place to lower fees and
protect them against volatility, it did so at the expense of
miners. Block production revenue was cut by something like a third,
so MEV is more incentivized than ever. Related Reading | Polygon ’s
Side Of The Story: Hard-Fork Resolved A “Critical Vulnerability” As
of press time, Polygon (MATIC) trades at $2,09 with a correction to
the downside in the past 24 hours.
Ethereum (COIN:ETHUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Ethereum (COIN:ETHUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024