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4 Common Misperceptions About Ethereum’s EIP 1559 Upgrade

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At block number 10.499.401, which is expected to be mined next Thursday, the Ethereum test network Ropsten will undergo a downwardly incompatible upgrade called “London”.

This is the first of three test network releases for London in the run-up to an activation of the main network provisionally planned by the Ethereum developers for mid-July. There are five code changes in London, also known as “Ethereum Improvement Proposals” (EIPs). In a blog post published on Friday, Tim Beiko of the Ethereum Foundation said:

“[EIP 1559] introduces changes to the block header, adds a new transaction type, comes with new JSON-RPC endpoints and changes the behavior of clients in several areas (mining, transaction pool, etc.). It is strongly recommended that projects familiarize themselves with the EIP. “

Connected: ‘Weird DeFi’ is getting stranger

Of the five EIPs in London, EIP 1559 is arguably the most anticipated and controversial code change of all. EIP 1559 introduces a minimum payment, also known as a “basic fee”, for sending transactions on Ethereum, which dynamically adapts to network activity and demand for block space.

Since EIP 1559 was first proposed over two years ago in 2019, there have been several misconceptions about its use and impact on end users, miners and investors. Below are four common myths about EIP 1559 taken from CoinDesk Research’s latest report, The Investment Implications of EIP 1559.

Read the full report on the CoinDesk Research Hub.

Myth 1: EIP 1559 aims to bring down the high fees for Ethereum.

At its core, the goal of EIP 1559 is to make transaction fees less volatile and more predictable by creating an algorithmic model that automatically adjusts costs by a factor of 1.125x per block.

Connected: The adoption of cryptocurrencies in Australia is growing with concerns about volatility

Under the current blind auction-like system for determining fees on Ethereum, the cost of sending a transaction can skyrocket at short notice depending on the ups and downs of the crypto markets. Under EIP 1559, fees are regulated in such a way that they rise or fall, depending on the use of the block space. If blocks are filled above a specified “gas target”, the basic fee increases by 12.5% ​​and vice versa.

The story goes on

See also: CoinDesk Research metrics report explaining Ethereum’s gas costs

However, these changes to the inner workings of Ethereum’s fee model are not expected to lower Ethereum’s transaction fees. The problem of high fees is mainly caused by the limited network capacity to process transactions. EIP 15559 alone does not affect how many transactions the network can process at the same time.

Myth 2: EIP 1559 will make Ethereum monetary policy more predictable.

EIP 1559 introduces a fee-burning mechanism that permanently removes coins from all circulating ether (ETH) supplies. The reason for burning the basic fee instead of distributing it to Ethereum miners is to make sure that there is no financial incentive for the miners to artificially overload the network and keep the basic fee high.

Because of this burning mechanism, EIP 1559 can reinforce a Bitcoin-like narrative about a limited supply of the ether investment case. However, it is difficult to predict exactly how much ether will be burned over time, as the base fee dynamically adapts to network activity and the need for block space.

While EIP 1559 introduces a counterweight to an ever-growing ether supply, it does not make Ethereum’s long-term monetary policy more stable. On the contrary, it creates economic instability in the network by making it impossible to control the total supply of ether over time.

Myth 3: EIP 1559 is likely to cause Ethereum miners to stop and attack the network.

It is estimated that with the activation of EIP 1559, miners will lose 20% to 35% of their income, and so there have been petitions from mining companies on Ethereum to prevent the addition of EIP 1559 in its current form to the London upgrade. In addition, changes to EIP 1559 have been proposed. These include changing the proposal so that the base fee is not burned, increasing miners’ income from other sources such as block subsidies, and adjusting Ethereum’s mining algorithm to make competition for network rewards more fair among miners.

Despite opposition from members of the Ethereum mining community, EIP 1559 is expected to be released on Ethereum’s main network in July, raising the question of whether miners could possibly resist the London upgrade by shutting down their machines and weakening the security of the network.

While it can, there are a number of reasons why the majority of miners are unlikely to skip or attempt to sabotage Ethereum due to the EIP 1559 activation. One of the main reasons is that miners would have to forego rewards that they would otherwise have earned by upgrading their machines and continuing operations. There’s also the reality that miners have a limited runway on Ethereum and will have to forego 100% of the rewards once the network switches to a Proof-of-Stake (PoS) consensus protocol early next year.

See also: The new plan to merge Ethereum into PoS

Myth 4: EIP 1559 will solve the Miner Extractable Value (MEV) problem on Ethereum.

Miners’ income on Ethereum has historically consisted of a fixed block subsidy and transaction fees. However, due to the growing popularity of high-frequency trading on decentralized exchanges (DEXs), the income of miners from MEV has become increasingly lucrative. Research and development organization Flashbots estimates that MEV’s daily revenue increased from half a million dollars earlier this year to over $ 6 million in June.

As a backdrop, MEV is the income miners can earn as a direct result of their ability to order transactions within a block. It is difficult to quantify as the miners’ income from reorganization, including or censoring certain transactions within a block, can come whenever a user interacts with another user or application on Ethereum.

See also: The good, the bad, and the ugly of MEV on Eth 2.0

EIP 1559 reduces the ability for miners to rely on transaction fees to extract MEV from users, but the ability for miners to order transactions and thereby earn MEV in other ways remains unchanged under EIP 1559. Speaking of the continued need for research and development of MEV after EIP 1559 is activated, Flashbots researcher Philip Daian said during an Ethereum virtual conference in May:

“The transaction fees people pay for inclusion [in a block] are actually only a very small percentage of the later MEV market … The game is still fundamentally unchanged and the deeper attenuations at the protocol level are still things that we have not yet explored. “

For more information on EIP 1559 and its impact on investments, download the full report from CoinDesk Research here.

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Infinity Token Brings New Cryptocurrency Strategy to Buyers

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Virtual currency trading and crypto mining make Infinity tokens self-sustaining while offering Ethereum dividends.

NEW YORK, NY / ACCESSWIRE / July 28, 2021 / The increasing demand for high quality cryptocurrency has spawned many new methods to profit from the coins or tokens without having to sell a position. Infinity Token offers a new system that rewards Ethereum (ETH) holders instead of the currency the investor already holds. The creators of Infinity Token say the goal is to create a strong tokenomics system that will reward participants and remain self-sustaining for a long time.

One of the big differentiators of Infinity Token is how the new system rewards people for holding Infinity Token ($ IT). Each transaction includes a 10% fee, which is divided into:

Rewards: 5% of the fee becomes a reflection that turns into ETH and can be claimed instantly at https://app.fairtokenproject.com/. This reflection amount remains proportional to your ownership of $ IT.

Sustainability: The other 5% of the fee goes to a development tax (which funds the “Growth Wallet”) which is used to buy ASIC mining rigs for Bitcoin mining. Profits from oil rigs buybacks and other aspects of token sustainability such as cash injections.

Simply being an investor becomes lucrative with this system, say the makers of Infinity Token. Buyers can hold their $ IT until liquidated for ETH, or hold for longer term to benefit from mining profit and ETH reflection. Instead of buying their own mining rigs, investors are essentially buying into community-owned crypto mining rigs. This community buys and powers the drilling rigs which are then used to mine BTC. “$ IT owners benefit directly from crypto mining with little effort,” explains the company.

Infinity Token reassures investors that it has worked through the numbers and created a cycle that can continue indefinitely known as the “Infinite Cycle”. The company says all profits will remain public so investors can see where the fees are going. The rigs purchased will be used to mine BTC and these profits will be used to buy back $ IT to maintain the token price and support trading activity.

The story goes on

Infinity Token also plans to use its website to educate buyers about cryptocurrencies so they can invest with confidence. Infinity Token follows a fair starting principle without pre-sale. Interested investors can read educational articles, news, and daily tips to help them make good decisions about their crypto future. The company plans to host in-person crypto mining meetups to incentivize people to buy, hold and trade the token.

Infinity Token says it will be one of the first to implement ETH considerations for holders. This makes the company a pioneer in its mission. The sustainable trading volume, the mining concept and the buybacks define the $ IT ecosystem. Infinity Token will officially start trading on Uniswap on August 6th at 9:00 p.m. EST.

Learn more at https://www.infinitytoken.io.

CONTACT:

Infinity token
https://www.infinitytoken.io/
admin@infinitytoken.io

SOURCE: Infinity token

View source version on accesswire.com:
https://www.accesswire.com/657465/Infinity-Token-Brings-New-Cryptocurrency-Strategy-to-Buyers

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Mastercard Launches Global Program to Help Cryptocurrency Startups Scale Their Innovations – Featured Bitcoin News

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Payment giant Mastercard has launched a new global program for cryptocurrency startups. Seven crypto companies have already joined the program. Together with Mastercard, they will work on “expanding and accelerating innovations in digital asset technology and making it safer and easier for people and institutions to buy, spend and hold cryptocurrencies and digital assets”.

The new crypto program from Mastercard

  • Mastercard announced Tuesday “a new Start Path global startup engagement program to support fast-growing digital assets, blockchain and cryptocurrency companies.”
  • Seven startups have already joined the program. They will partner with Mastercard “to expand and accelerate innovation in digital asset technology and make it safer and easier for people and institutions to buy, spend and hold cryptocurrencies and digital assets,” the announcement reads .
  • Startups include GK8, Mintable, Stacs and Supraoracles. GK8 (Israel) is a self-managed end-to-end institutional crypto-custody platform. Mintable (Singapore) is a marketplace for non-fungible tokens (NFT), Stacs (Singapore) offers a blockchain infrastructure for the financial industry and Supraoracles (Switzerland) is a blockchain oracle.
  • The other companies that have joined the program are Taurus, Uphold, and Domain Money. Taurus (Switzerland) offers an enterprise-class infrastructure for the management of all digital assets, including crypto-assets, digital currencies and tokenized assets, covering issuance, custody, asset servicing and trading. Uphold (USA) is a crypto investment and payment service provider for consumers and businesses, and Domain Money (USA) aims to build an investment platform to bridge the gap between digital assets and traditional financing for retail investors.
  • The Start Path program has helped more than 250 startups since 2014, the announcement said. The program now gives crypto startups access to “the latest Mastercard tools and solutions to help these companies scale their innovations and cutting-edge technologies”.
  • Mastercard stated, “These startups are using the program to connect with our ecosystem of banks, retailers, partners and digital players around the world to provide new solutions.”
  • Jess Turner, Executive Vice President of New Digital Infrastructure and Fintech, commented, “Mastercard has been dealing with the ecosystem of digital currencies since 2015” and states:

As a leading technology provider, we believe that we can play a key role in digital assets, shaping the industry and providing consumer protection and security. Part of our role is to shape the future of cryptocurrency, and we do it by combining common financial principles with innovations for digital assets.

  • Last week Mastercard announced an expansion of its card program for cryptocurrency wallets and exchanges with the aim of “making it easier for partners to convert cryptocurrency to traditional fiat currency”.

What do you think of Mastercard’s new program for crypto startups? Let us know in the comment section below.

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Ethereum Devs Grapple With Worst-Case Scenarios

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This week I’ll be discussing the impact of last Wednesday’s test network issues that uncovered a bug in Ethereum’s majority software client, Geth. Although a patched version of the Geth software has now been released for London, some users, developers and mining pools are calling for further testing of the upgrade, which is set to go live next week.

This article originally appeared in Valid Points, CoinDesk’s weekly newsletter, which breaks down Ethereum 2.0 and its far-reaching impact on the crypto markets. Subscribe to valid points here.

Pulse control

Below is an overview of the network activity on the Ethereum 2.0 Beacon Chain over the past week. For more information on the metrics featured in this section, check out our 101 Eth 2.0 Metrics Explainer.

Related: The Node: Goldman’s ‘DeFi’ ETF is doing nothing

Disclaimer: All profits from CoinDesk’s Eth 2.0 staking business will be donated to a charity of the company’s choice once broadcasts are enabled on the network.

New frontiers

As Ethereum prepares to activate its 11th backward incompatible upgrade, also known as the “hard fork,” on Wednesday August 4th, some developers fear the upgrade may require further testing before deployment.

Shortly after the bi-weekly Ethereum core developer meeting on Friday, July 23rd, Tim Beiko of the Ethereum Foundation wrote in the All Core Developers Discord chat room: “A few people got in touch or tweeted that they are not necessarily happy not to hesitate [the hard fork] … I asked about it [in the meeting] and no one seemed to have a strong opinion, but some people mentioned that this may not be the right approach. ”

In response to Beiko’s comment, Ethereum software client developer Alexey Akhunov said he agreed that it was “strange” that in the bi-weekly meeting, given recent events, there was no further discussion of a possible delay in the hard fork called ” London ”.

The story goes on

Related: How To Fix Ethereum MEV Problem And Give Best Price To Traders

“I suppose I know why,” wrote Achunov. “Delay [London] is a sensitive topic and nobody wants to take the heat, understandable. ”

Others in the chat room begged the Ethereum developers to seriously consider postponing London for a few weeks for further testing.

The backstory

Concerns about the risks of the London upgrade – which includes a controversial code change affecting Ethereum’s fee market known as the Ethereum Improvement Proposal (EIP) 1559 – grew after a bug in the Ethereum software client Geth was discovered.

In the background, Geth is the most popular software used to connect to Ethereum. According to Ethernodes.org, an estimated 86% of all computers, also known as nodes, that are synchronized with the Ethereum network are running Geth client software.

On Wednesday July 21, the Ethereum test network Ropsten, which activated the London hard fork a month ago, suddenly experienced a chain split after an invalid transaction was mined into a block by Node with Geth while being visited by Nodes with minority customers and . Open Ethereum.

Within a few hours, the Geth team released a hotfix and all users were asked to update their software to the latest version number Terra Nova 1.10.6.

The solution

While no developer argued that the bug should delay activation of the main London network during Friday’s call, some developers discussed the appropriate course of action if such a bug were discovered on Ethereum rather than a test network.

“What would we do if something like this happened on the mainnet, especially in a place where Geth, the majority customer, is producing blocks? It obviously takes several hours to find a solution, ”Beiko said during the meeting.

Martin Holst Swende of the Ethereum Foundation pointed out that these errors are not an unprecedented occurrence with Ropsten, and while they are “a thrill” there are two ways to fix them.

First, if a user’s node follows the wrong version of the blockchain, the user must internally rewind the chain back to the block before splitting the chain and using the patched geth software to sync it with the new chain. Second, if a user’s node is not already in sync with a version of the blockchain but tries to connect to the network to collect data about recent transactions or to execute transactions, the user may end up connecting to the wrong version of the Make a chain. To avoid this, these users need to “whitelist” certain nodes on Ethereum that follow the correct chain and isolate them from others who are in the wrong chain.

The fallout

Both rewinding and whitelisting of Ethereum nodes can be done via Geth. The miners at Ropsten were able to use these tactics to resolve the chain split that took place last Wednesday, although a miner discovered during the meeting on Friday that instructions to repair chain splits were not communicated effectively prior to the incident on Wednesday and accordingly many miners were confused how to reboot their nodes properly.

The user “AlexSSD7” wrote in the Discord chat room that he, as a representative of an Ethereum mining pool, was “concerned” about the error in Geth and remarked: “A single minute [of network] Downtime costs us a lot. One hour of downtime costs us $ 20,000. ”

Unexpected errors in the client software would indeed be disruptive to exchanges and companies operating on the main network. For this reason, the developers emphasized the need for a robust monitoring system that could quickly alert node operators to chain splits and encourage them to suspend operations pending further investigation.

“This appears to be a fairly low-hanging fruit that gives the ecosystem a valuable tone. If you’re not sure how to get started, just ask on the Discord, ”Beiko said at the session on Friday.

While these solutions would surely be helpful if an error similar to the one that occurred on Wednesday after London was deployed on the mainnet again, they would not necessarily be the same solutions used to fix bigger problems such as hacker magically prints 100 million ETH.

In the event of such a catastrophic event, Danny Ryan of the Ethereum Foundation said in Friday’s session that it would be difficult to know in advance how the developers would go about it.

“I think there are just a lot of options for the many kinds of bugs and many kinds of specifics that will come up,” said Ryan.

The more severe the impact of a network failure, the more intrusive the solution to fixing the failure is likely to be – and the more damaging Ethereum’s reputation as a secure blockchain becomes.

With increasingly ambitious hard forks on Ethereum’s development roadmap in the near future, it could soon become a must for developers to find potential solutions to worst-case scenario and mitigation plans with network stakeholders.

Validated Takes – EthCC Edition

The following is a special edition of Validated Takes highlighting a handful of panel discussions and keynote presentations from last week’s Ethereum community conference in Paris, France. The full conference agenda can be found on the EthCC official website.

“DeFi for Traditional Markets: When Security Tokens”, lecture by Fountain co-founder Mathieu Chanson. Highlights: Fountain is a decentralized exchange on Ethereum that allows users to buy and sell security tokens. Chanson highlighted the liquidity and accessibility that blockchain technology offers as it is accessible 24 hours a day and allows for immediate settlement. Tokenization of securities offers several other advantages, including transparency and fractionation of assets, which further increase accessibility. However, there are many challenges in creating a fully decentralized stock exchange. Onboarding clients and new securities requires compliance with international regulations, including know-your-customer laws and custody licenses.

“The Power of Credit Delegation”, lecture by Aave founder Stani Kulechov. Highlights: Aave is a decentralized credit protocol based on Ethereum. The team behind the protocol has developed a product that can grant loans without collateral. Kulechov believes this is a step forward to bring DeFi liquidity into the real economy and increase credit demand for Aave.

“Things that are important outside of DeFi”, lecture by Ethereum creator Vitalik Buterin. Highlights: In addition to financial services, social media and financing public goods are two activities that haven’t got off the ground on Ethereum. Buterin argues that the token economy and the network’s censorship resistance are two reasons these activities could benefit from being built on a decentralized blockchain.

“Uniswap, DeFi & the future of consumer finance”, talk from Uniswap growth leader Ashleigh Schap. Highlights: Uniswap Labs is trying to partner with blockchain infrastructure companies like Talos, Paxos and Fireblocks to connect DeFi solutions with the backend of well-known fintech companies like PayPal and E * Trade.

“Why DEXs Eat the World”, lecture by Curve protocol developer Julien Bouteloup. Highlights: At its best, [decentralized finance] enables the citizens of the world to have equal access to all currencies, stocks and financial platforms. As space advances, decentralization will be a spectrum. Regulators will watch over protocols used by the traditional financial world, and users will continue to have access to the “Wild West” proving ground that DeFi is today.

– Teddy Oosterbaan

Factoid of the week

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