What does EIP-1559 mean for Ethereum, Solana, and Binance Smart Chain?
The last few months have seen Ethereum climb by leaps and bounds on the charts, with the same, coupled with the wider market’s resurgence, allowing many in the mainstream to finally move beyond just Bitcoin. In fact, the same can be evidenced by the fact that institutional inflows into Ethereum have risen steadily too.
That, however, doesn’t mean that it’s without its issues. In fact, issues such as scalability and high gas prices have often been raised repeatedly. While concerns about the same had previously been tempered by the ongoing transition to 2.0, the emergence of “ETH-killers” such as Solana and Binance Smart Chance has thrown a spanner in the works.
In fact, according to Synthetix’s Cain Warwick, the aforementioned drawbacks have both contributed to a market opportunity being opened.
Now, in a previous article, we touched upon whether Binance Smart Chain would be able to take advantage. What about Solana though? According to the exec,
“Once it [Solana] gains momentum, it will be hard to unwind because they are building a parallel ecosystem with different engineers and different skillsets and different approaches.”
In light of the same, and the fact that BSC is also expected to draw on the “overflow of activity,” at least in the near term, where can we see Ethereum heading? For financial applications, Warwick believes, Ethereum remains the place you go to as long as you’re not very concerned with throughput, with the exec going on to cite the utility of using Ethereum to issue a bond rather than as a platform to onboard 100M users.
In light of such concerns, ergo, it is very understandable that many in the community are hopeful that once EIP-1559 goes through in July, the prevailing narrative including Ethereum, Solana, and BSC will change. Synthetix’s Warwick and Multicoin Capital’s Samani, alas, hold contrary opinions, with the former asserting that “it will only make it worse.”
ETH is expected to hike astronomically on the back of the aforementioned proposal, and this, according to Warwick, will ensure that the “wealth effect” doesn’t spread as it needs to thanks to the level at which most of these people will be entering.
“If ETH continues to appreciate and get to a point where it’s worth either 10 grand or 20 grand, it actually makes it harder for someone new to enter the space. How aligned would you feel if you own just 200 millionth of a network with that kind of money?”
It’s worth noting here that the exec remains confident that the launch of layer 2 tokens will “allow people to get in early at a lower price point and at a lower network value.”