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EIP 1559 is Coming | Weekly Recap

ETH fee burning set to start on August 4th--this is big.
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Jul 10, 2021 • 2 min read

Dear Bankless Nation,

August 4th.

That’s the date when EIP 1559 is slated to go live on Ethereum mainnet.

This will be a monumental event for Ethereum.

Let’s talk about this upgrade to ETH’s monetary economics.

The Beacon Chain launched December 1st 2020 which turned ETH into a capital asset. While this was massive for ETH the asset, Ethereum’s annual issuance increased slightly as a result.

But after EIP 1559, ETH issuance only goes in one direction…down.

EIP 1559 is both an UX upgrade for using Ethereum (the network) and an economic upgrade for Ether (the asset). It features a new auction mechanism, improving gas fees user experience as well as burning ETH on every transaction.

🎙️ Need a refesher on EIP 1559? Relisten to this primer on EIP 1559 w/ Hasu

After EIP 1559 on August 4th, the only thing ETH needs to become ultra sound money is The Merge—at that point the Ethereum network eliminates PoW issuance and fully transitions to the PoS network and reduces issuance below 1% per year.

Bottomline: ETH issuance is around 5% today but two things are about to happen…

  • August 4th, 2021—Fee Burn with EIP 1559 (1-2% issuance reduction)
  • Q1 2022—Proof-of-work issuance deactivated (~4% issuance reduction)

That’s why August 4th is so significant.

With the deployment of EIP 1559 we will leave the Inflationary Era of ETH and move into the Ultra Sound Era of ETH.

This is the hardening of ETH’s monetary policy.

This is the making of a protocol-sovereign Internet Bond.

This is how ETH becomes a capital efficient world reserve asset.

This is a big deal.

Yeah, we’re excited.

While we wait, let’s harness that excitement to keep leveling up.

Here’s what we have lined up for the next week:

  • Arthur_0x on how he built a $500m DeFi fund in 3 years
  • Ben dives into Perpetual Protocol and the PERP token
  • Jiho from Axie Infinity is coming on State of the Nation

Enjoy the weekend.

- RSA

P.S. Bankless DAO is hosting its weekly NFT showcase with legendary 3D artist Bayu Marlin. Two pieces available via open edition for 0.01 ETH each. Get it & collect crypto culture 🏴

ACTION RECAP 📚

  1. Execute any good market opportunities you saw in Market Monday
  2. Learn how to get exposure to CryptoPunks
  3. Read why ETH is the most capital efficient asset in the world
  4. Research PoolTogether’s no-loss lottery and POOL token
  5. Leak the most undervalued token

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

Published in Bankless

There’s a revolution in the world of money. Ethereum, Bitcoin, crypto, open finance, DeFi—a bankless revolution. And you want part of it.

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