Ethereum Nodes Get Ready For EIP1559

The vast majority of ethereum nodes has upgraded for the fee market reforming Ethereum Improvement Proposal (EIP) 1559 which is to take effect this Thursday.

According to data from Ethernodes, 57% of live clients are ready while 42% are spending the remaining 2-3 days to upgrade as pictured above.

Geth nodes need to be version 1.10.6, with 54% of them in compliance. The second biggest eth1 client is now OpenEthereum, with 73% of them ready.

Then there’s Erigon, better known as TurboGeth, with 79% upgraded. So suggesting Geth runners are being slower probably because the node operators use customized software to handle exchanges volumes or the requirements of mining farms.

They may be doing testing and the like and waiting to see if there are any further code changes, but at this point every node that wants to keep running with start upgrading.

The upgrade is a fork because there’s a consensual change in how network fees are handled. Currently it’s a blind auction where everyone bids for inclusion with miners deciding whether they are biding enough or otherwise.

EIP1559 changes that to having a base fee paid by all with an algorithm targeting the level of that base fee to be sufficient for the network to have 50% extra capacity.

That means the gas limit, and thus network capacity, is also to double this Thursday with this change making it much easier to predict network fees.

That base fee is then burned because there isn’t a fair way to distribute it to all miners with ethereum’s supply thus to start reducing after Thursday either absolutely if base fee payments overtake block rewards, or in relative terms regarding what the supply would have otherwise been.

Eth thus has turned a bit bullish with it nearing $2,600 while the ratio has jumped to 0.065 btc from 0.058 on Saturday.

That presumably is trying to price-in this change, but the real pricing-in will probably happen only once the upgrade does go into effect and thus the change in the supply and demand balance leads to a readjustment to take into account the reduced supply, a process that may take some time.

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