Ethereum London Hard Fork: What It Changed

The Ethereum London hard fork was a network upgrade activated on August 5, 2021, that introduced several Ethereum Improvement Proposals (EIPs) aimed at making transaction fees more predictable and reducing supply growth. This article explains what the upgrade did, why it mattered, and how it still affects Ethereum users today. You’ll learn the mechanics of the fee market change, the deflationary effect of EIP-1559, and what the upgrade meant for miners, stakers, and everyday senders.

Background: Why the London Upgrade Happened

Before London, Ethereum used a simple first-price auction for transaction fees. Users sent a “gas price” (in gwei, where 1 gwei = 0.000000001 ETH) and miners chose the highest bids. This caused two problems: users often overpaid out of fear, and fee spikes made the network unusable during popular NFT drops or DeFi events. The London fork was designed to fix this by splitting the fee into a mandatory base fee and an optional tip (priority fee). It was part of a series of planned upgrades leading toward Ethereum 2.0, and it required all nodes and clients to update in coordination.

EIP-1559: The Core Fee Market Change

The most significant change was EIP-1559, which replaced the auction with a predictable base fee. Here’s how it works:

• Base fee – a network-wide minimum price per unit of gas, calculated from how full the previous block was. It rises up to 12.5% per block when blocks are over 50% full, and falls similarly when they’re under.
• Priority fee (tip) – an optional extra amount users pay to incentivize miners (or validators after the merge) to include their transaction faster.
• Fee cap – the maximum total fee (base + tip) a user is willing to pay. If the base fee exceeds the cap, the transaction won’t be included until the base fee drops.

For example, if the base fee is 50 gwei and you set a priority fee of 2 gwei with a cap of 100 gwei, you’ll pay 52 gwei if the base fee stays at 50. If the base fee rises to 60, you’ll pay 62 gwei, still under your cap. This makes fees more predictable because the base fee is visible before you sign.

What the London Fork Actually Changed

Beyond EIP-1559, London included four other EIPs that are less famous but still important:

• EIP-3529 – reduced refunds for clearing storage slots and self-destructing contracts, which closed a gas-arbitrage loophole and reduced the maximum block size.
• EIP-3541 – rejected new contracts starting with the byte 0xEF, reserving that prefix for future features.
• EIP-3554 – delayed the “difficulty bomb” (a mechanism that makes mining progressively harder) until December 2021, giving developers more time before the merge to proof-of-stake.
• EIP-3198 – added an opcode (BASEFEE) that lets smart contracts read the current base fee, enabling more complex fee-handling logic.

These changes were bundled into one hard fork because they were all tested together and required a network-wide upgrade.

Impact on ETH Supply and the Deflationary Question

One of the most talked-about effects is that the base fee is burned – sent to an unspendable address – rather than given to miners. This reduces the total supply of ETH over time. Before London, all fees went to miners; after London, only the priority fee goes to miners. The burn rate depends on network activity: during busy periods, more ETH is burned than issued to miners/stakers, making ETH net deflationary. For example, in the first year after London, over 2.6 million ETH were burned, but issuance still outpaced burning on average. The burn doesn’t lower the price directly, but it changes the supply dynamics and is a key metric tracked by many Ethereum dashboards.

How It Affected Users and Miners

For regular users, the most visible change is in wallet interfaces. Most wallets now show a “max fee” and “priority fee” instead of a single gas price. You can often choose a slider for “slow”, “average”, or “fast” – this adjusts the priority fee, not the base fee. The base fee is set by the network, so you can’t lower it by waiting; you just wait for the base fee to drop. Miners saw a reduction in income because they no longer receive the base fee, but they still earn the priority fee plus block rewards. Some mining pools initially tried to reject transactions with low tips, but the market quickly settled. After the merge in September 2022, miners were replaced by validators, who now collect the same priority fees.

Common Misconceptions and Problems

A frequent misconception is that EIP-1559 makes transactions cheaper. It doesn’t – it makes them more predictable. During high demand, the base fee can still be very high. Another common issue is users setting a fee cap too low and getting stuck transactions. If the base fee rises above your cap, your transaction won’t be included until the base fee drops, which can take minutes or hours. To fix this, most wallets allow you to “speed up” by resubmitting with a higher cap. Also, some people think the burn means ETH becomes scarce immediately – but that only happens when burn > issuance, which requires sustained high network usage.

Frequently Asked Questions

What is the difference between base fee and priority fee?

The base fee is the minimum amount required to include a transaction, determined by network congestion, and it is burned. The priority fee is an optional extra you pay to miners/validators to prioritize your transaction. You must pay at least the base fee, but you can set the priority fee to zero if you’re not in a hurry.

Why did the London fork make ETH deflationary?

Because the base fee is burned, removing ETH from circulation. When the amount burned exceeds the new ETH issued to miners/validators, the total supply decreases. This doesn’t happen all the time – only during periods of high network activity.

How do I know if my transaction is stuck after London?

If your transaction’s fee cap is lower than the current base fee, it won’t be confirmed. You can check on a block explorer like Etherscan; it will show “pending” or “dropped”. Most wallets let you cancel or speed up the transaction by resubmitting with a higher cap.

Did the London fork reduce gas fees for NFTs?

No, it didn’t reduce fees during NFT minting spikes. The base fee algorithm raises fees when blocks are full, so during a popular mint, fees can still be extremely high. The only lasting fix for high fees was the merge to proof-of-stake and later layer-2 solutions, not London itself.

Is the London upgrade still active on Ethereum today?

Yes, the London rules are still in effect on the mainnet. Later upgrades (like the merge and Shanghai) built on top of it, but the fee market mechanism remains unchanged. The base fee burn continues, and the difficulty bomb was eventually removed after the merge.

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