Ethereum Set for Deflationary Upgrade as EIP1559 Burns ETH Tokens

Ethereum's highly anticipated EIP1559 upgrade is set to go live on July 14, marking a significant shift towards a deflationary token economy. The London hard-fork will introduce the long-awaited EIP1559 protocol, which will burn ETH tokens relative to fees generated on the network.

According to Ethereum core developer Tim Beiko, the upgrade is likely to reduce the circulating supply of ETH, potentially leading to a price increase. As the graph shows, the number of fees generated on the network and the amount of tokens EIP1559 would burn after its introduction are substantial, with around 6000-6500 ETH/day being burned.

This development has sparked excitement among analysts, who predict that ETH could cross $5000 this summer. Some even hint at a target price of $10,000 per ETH figure. However, it's essential to note that cryptocurrency investments carry a high degree of risk, and investors should conduct their own research before making any decisions.

The London hard-fork also includes EIP3198, which initiates the BASE FEE, as well as EIP3238, designed to delay the Ice Age push-back. Additionally, another EIP for gas fee refunds will be implemented, although its specifics are yet to be announced.