Ethereum’s Latest Upgrade Sees Some Tokens Go Out Of Function

As we get closer to the fast-approaching Ethereum (ETH) London hard fork, which is scheduled to take place on the 5th of August 2021, there has been much speculation that the upgrade will end up rendering numerous tokens obsolete and effectively useless. This is because the upgrade will be centered around EIP-1559, which is a contentious code expected to do away with high transaction fees, an act that many expect will result in a portion of ETH being taken out of circulation.

As such, certain gas tokens, including the likes of CHI and GST2, which are often employed by developers for the purposes of securing lower prices as far as the deployment of smart contracts might be concerned, may become redundant.

The London hard fork

In simple words, the upcoming London upgrade will include five unique Ether Improvement Proposals, which will provide key alterations to the network. These changes were thoroughly discussed by stakeholders and developers and have already been submitted and subsequently integrated with the code. One of the main changes that are of the utmost significance has to do with EIP-3529.

An Ethereum Foundation’s core developer, Tim Beiko, recently offered an explanation as to how Ethereum actually works. Data is first stored on Ethereum, and when this data is removed from the network, users receive a slight gas refund. Furthermore, there exist smart contracts, which are usually not required after reaching a certain point, similar to how beverage cans and bottles are not needed once the drink inside has been finished. EIP-3529 will effectively eliminate these refunds.

What to expect

While it is largely true that the aforementioned tokens shall no longer have any kind of real utility once the London hard fork is completed, the tokens themselves can still sustain active markets. A perfect example of this would have to yearn.finance (YFI), a decentralized finance protocol that had issued a supply token that had ‘absolutely no financial value whatsoever. YFI then went on to increase in price nonetheless, and it currently trades at just below $31,000, in addition to being utilized on the protocol regarding governance decisions.

Ultimately, it remains to be seen what will actually happen to the gas tokens and whether these will truly be deemed obsolete following the London hard fork. Whether the prices of the tokens fall to reach $0 or not is not something that can be guaranteed though given how volatile and often unpredictable the markets can be.