EIPs that make an impact.
Ethereum Improvements Proposals (EIP) are technical documents in which the Ethereum community makes proposals for improvements in the design and development of Ethereum.
In a nutshell, an EIP serves for its developer to capture and explain in detail a new feature or improvement for Ethereum. But not only that, this document provides a proof of concept or, even better, the functional implementation of the same.
Ethereum is nearing the end of its journey from the energy-intensive Proof-of-Work (PoW) algorithm to the Ethereum 2.0 Proof-of-Stake (PoS) Ethereum 2.0 chain.
In December 2020, the Beacon chain went live, kicking off the construction of the Eth2 PoS chain, which currently has more than 8,600,000 ETH staked and just under 270,000 operational validators.
Within Eth2, these validators will basically take over the work of the current crypto miners, in terms of processing transactions and maintaining the functionality of the blockchain.
A user has to stake 32 ETH to be a full node validator, but smaller amounts can be staked in groups.
In mid-2021, one of the most desired Ethereum optimization proposals went live. Given the modifications, it introduced to the fee structures that miners receive and users pay, EIP-155 sparked a great deal of controversy.
The mechanism for burning ETH that was incorporated, which destroys a piece of Ether used to pay an operating fee, was controversial. Cryptominers were not impressed because these fees are an element of their incentive to keep the network working.
The deflationary effect devised by this burning mechanism was an advantage of the London hard fork. As a result, each transaction destroys a percentage of ETH and gradually removes more tokens from the ecosystem. This is a process that seeks to improve the scarcity and value of asset-qualified ETH.
Caselin believes that the rollout of the London update has contributed to a favorable market mood, but also points out some important differences between Ethereum and Bitcoin:
“The London update reaffirmed that the Ethereum project is still alive and kicking, which is attractive to investors and speculators (…) It is far superior to other projects that have risen to the top of the charts but have little to offer in terms of actual service delivery and activity (…) The burning process is inspired by the logic of BTC and refers to inflation.”
Greenspan, for his part, was more unbiased and objective in his qualification by stating that the average Ethereum network user would have little notion of the impact of the recent EIPs that make up the peremptory merger between the current Ethereum blockchain and the Beacon Chain, which is scheduled for this 2022…:
“ETH is built in a different way to BTC, and has made much greater technical progress in 2021 (…) Ethereum is a more adaptable commodity, with a full ecosystem behind it and more room to develop and create ambitious and profitable initiatives over a longer period of time, as the cryptocurrency community understands.”
The revelation of the latest COVID-19 variation identified by South African researchers sent global markets plummeting in December. Traditional markets felt a shudder and this reverberated through the digital asset markets.
When this attitude spread to the cryptocurrency markets, BTC, ETH and a host of other major cryptocurrencies experienced losses, and there was more negative news in the form of rising inflation in the United States.