Ether is up by 2.76% over the past 24 hours on Wednesday ahead of a technical adjustment to the Ethereum blockchain that will change the way transactions are processed.
The transition will come into effect on Thursday, according to Reuters, slightly behind the initially planned date.
The upgrade will technically have taken place once the 12,965,000th block on the blockchain has been verified.
Ethereum Improvement Proposal 1559
The ‘Ethereum Improvement Proposal’ (EIP) 1559 shares similarities to a bitcoin ‘halving’ in which the supply of the cryptocurrency is gradually reduced. When it comes to bitcoin, historically, halvings have preceded bull-runs to higher price points.
However, while bitcoin is considered more of a store of value in the world of de-fi, Ethereum is the most prominent financial infrastructure technology.
EIP 1559 is a software upgrade that alters the way transactions on the Ethereum blockchain are processed. It does this by giving clear pricing on transaction fees in Ether paid to miners in order to validate transactions. Additionally, it ‘burns’ a small number of tokens, meaning they are removed from circulation.
This means that the tokens become rarer and therefore more valuable.
Price Outlook
Andrew Keys, managing partner at DARMA Capital, believes that ether’s current price point fails to take into account the coming software upgrade.
Keys suggested that tomorrow’s upgrade, along with another similar upgrade in early 2022, will “”easily quintuple the price of ether” by next year.
Over the past 12 months, Ether is up by 709.84%.
