Can ETH Become DEFLATIONARY? EIP 1559 Explained

So what is EIP-1559 a.k.a the fee burn proposal all about? Will it lower Ethereum’s gas fees? And how can it make ETH deflationary? We’ll answer all of these questions in this video.

EIP 1559 describes changes to the Ethereum fee model and it was put forward by Vitalik Buterin in 2019.

The proposal aims to achieve the following goals:
-making transaction fees more predictable
-reducing delays in transaction confirmation
-improving user experience by automating the fee bidding system
-creating a positive feedback loop between network activity and the ETH supply

Now, let’s see what the proposed change is all about.

[Finematics]

❓What do you think about EIP 1559? Will it have an impact on the ETH price?
👍Hit the like button if you enjoyed this video

[zainy]

finally someone who actually puts effort into the videos

[falxie_]

This is one of the most accessible explanations that I've watched. I think that it's going to have some trouble from miners like myself

[joecrofternap]

I am instant fan of this whiteboard format.. keep it up and i will spread to my 10000+ community also..

[dreamzsiva]

This channel is a goldmine of DeFi information. As a noob in crypto trading, I find these videos incredibly useful.Thank you for making these.

[MaxPicAxe]

First time someone has actually properly explained this to me, thanks

[JinKee]

I love your voice. You're like the Two Minute Papers of crypto.

[DarisaRohith]

There seems to be a fundamental mistake - EIP 1559 proposal makes it Deflationary, in general. irrespective of whether the following equation you mentioned holds - "Block Reward + Miner Tip < Burnt Base Fee". In simple the total supply is shrinking, because of which there would be shrinking in the total supply of ethereum in general. In a way better to logically consider - "Block Reward < Burnt Base Fee", cause the Miner Tip is actually in Eth circulation.

[paul-olof]

Thank you for this. Very well put together and easily understood.

[petermorris]

Thanks for making this video!

I now understand more, but I don't feel I understand enough to put this into code. Would it be possible for you to explain the steps? For example

1: Get the latest block
2: Get the value XXX
3: Get (some other value)
4: Add XXX to (some other value)
5: Store that value in the new transaction's ZZZ property.

If someone can explain these steps to me, I would appreciate it very much!

[RaidenFrancois]

Thank you for putting this up! Appreciate the effort!

[wellswatti]

Excellent video. Wasn't involved with web3 before this was implemented on mainnet but great to get into how much more improved the network is thanks to this.

[codyswartz]

First off I have to say this is the best explanation of EIP 1559. However as a miner this concerns me. This seems like it will be a 50% reduction in profits. Also if price drops enough it could become unprofitable and become an attack vector to the network itself. I wish they had increased the block reward to offset the losses.

[arjoon]

Love your videos that aren't defi related as well, helps with getting a more holistic view.

[ericnordelogaliano]

Dude, where were you all this time? :), thanks for making this videos

[voornaamachternaam]

Your content is always amazing. Thank you for making this!

[Vlad-ldcu]

High quality explanation, thank you so much.

[rajasmasala]

You're really good at explaining things.

[Eisenhorne]

As a new crypto person, I am mining. This change will cause me to mine something other than eth. Not sure what that means to all of this but, I would be discouraged to point my miners at eth.

[ricbn]

Well explained. Gas fee deprived me of much investment opportunity when yield farming project spiked.😊