Etherscan’s historical graph for average daily usage of network rates shows a jump of around 9% since the London update was deployed on August 5th. The number has gone from around 92 billion to just over 100 billion.
The last time such a visible change occurred was around April 21, when it increased by about 17%. The movement is not the same as the ups and downs in network fee prices, but a measured increase in average usage, so it is indicative of overall network capacity.
Ethereum co-founder Vitalik Buterin posted a analysis on Reddit detailing three reasons why the increase occurred.
Reasons for Ethereum’s Capacity Boost
The London update also delayed the ‘Ethereum Ice Age’, which had just started, explained Buterin. This means that the average lock times have returned to the normal long-term level of about 13.1 seconds.
“This is a difference of about 3% in block speed, which explains 3% of the 9% increase in network fee usage.”
The difficulty bomb, which slows down the Ice Age, refers to the level of difficulty or increasing complexity in the working proof mining algorithm. As calculations become more difficult, block times get longer than usual and rewards for miners get smaller.
The second reason for the increase is that there was more unused block space before the hard fork, as a result of a maximum used network rate setting of 15 million. After the update, this number became the target, not the maximum.
“This means that if the average network used rate, including empty blocks, is less than 15M, the baseline will decrease until the average goes back to 15M. So that’s about 2-3% more.”
Third, the EIP-1559 formula is not perfect for achieving 50% of the base rate to be burned, Buterin said. There is a complex relationship between arithmetic and geometric means for block size and rate calculations. Medium blocks are now slightly fuller (over 50%) than they were before the upgrade, which is also responsible for a small increase in capacity.
“Ethereum users can rejoice in the involuntary 6% capacity increase that London has brought,” concluded Buterin.
Network fees go up again
Ethereum users will likely not be happy with another spike in network rates resulting from CyberKongz’s NFT launch on Sunday (15). The average transaction fee is now close to $25, according to BitInfoCharts, and users are paying up to $40 for a token swap and even more for complex smart contract operations.
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