Ethereum London Upgrade: EIP-1559 & ETH 2.0 Explained (Aug 3-5, 2021)

Ethereum’s London upgrade will go live on block 12,965,000, which is expected between August 3-5, 2021. This upgrade includes EIP-1559 and is an important part of Ethereum 2.0 (ETH2).

EIP-1559 includes a few important changes to how Etehreum transactions work and how mining rewards work.

Instead of ETH being bid as gas to have a transaction go through, a gas price will be set as a “base gas fee” and then a “priority fee” will be able to be included. Those fees in total can be paid up to the current max gas fee which is set algorithmically based on current network traffic. This effectively makes transactions more predictable and is a push toward gas being in line with network congestion and not pure economic demand.

The upgrade also does a number of other things, for example, it sets the base fee to be burned (potentially making ETH deflationary, at least at times) and it helps cement ETH as the only way to pay for gas on Ethereum, and protects against increasingly popular MEV attacks.

That is the gist, you can read more on the official Ethereum Foundation blog post for 1559.