The London hard fork arrived almost on schedule at 12:33 pm UTC on Thursday at block height 12,965,000, ushering in the Ethereum Improvement Proposal (EIP) 1559.
With the upgrade triggered, Ethereum will now undergo a significant overhaul of the network’s transaction fee market and other parameters such as gas refunds among others.
Under EIP-1559, each transaction on Ethereum will involve burning the base fee, which automatically decreases the Ether (ETH) circulating supply. Several exchanges, including Binance, announced a temporary pause to deposit and withdrawals on the Ethereum network due to the London hard fork.
Some proponents of the upgrade say it will catapult Ether to becoming a deflationary asset, as each transaction will trigger a portion of the total coin supply to be removed from circulation forever.
As previously reported by Cointelegraph, Ethereum co-founder and ConsenSys founder Joseph Lubin described the London upgrade as a part of a journey toward making Ether become “ultrasound money.”
The London upgrade and the subsequent activation of EIP-1559 is a mile marker of sorts in the transition to Ethereum 2.0, which will move the network from a proof-of-work consensus to a proof-of-stake consensus.
After the London upgrade engineers block elasticity and overhauls the transaction fee market, the Shanghai hard fork scheduled to happen later in the year will be the next focus point on the agenda.
The excitement surrounding the upgrade has coincided with a steady increase in the ETH spot price. With a price hovering around $2,610 at publication time, the second-largest crypto by market capitalization is at its highest price level since early June.
Ether clocked an all-time high above $4,200 back in mid-May right before the crypto price crash that saw Bitcoin (BTC) lose about 50% and altcoins declining by over 70% on average.