Ethereum’s London Hard Fork Goes off Without a Hitch

The Importance of the Ethereum Upgrade

Ethereum (ETH), the platform for the world’s second most popular cryptocurrency, Ether, completed its long-awaited software update known as the “London hard fork.” Changes were designed to fix some of the platform’s scaling and transaction fee problems. Those issues have been made worse in recent months as enthusiasm grows for nonfungible tokens, which are built largely on the Ethereum blockchain. Decentralized finance, another emerging trend found largely on Ethereum, is also fueling demand.

The change to the code which took place Thursday was welcome by users and investors and sent the price of Ether higher. Cryptocurrency prices on the whole have been advancing after a recent steep selloff.

Ethereum’s Largest Hard Fork Yet

This was Ethereum’s 11th hard fork, but it was the largest one yet, consisting of five improvements known as EIPs. The update that is receiving the most attention is related to transaction fees.

Prior to the code upgrade, users had to come up with transaction fees on their own, selecting a number they hoped would guarantee them a place in the next chain of transactions. Some would even offer a premium to get a better position on the block. With the upgrade, Ethereum’s algorithms will determine the transaction fee basing it on network demand. That should prevent huge spikes in transaction fees and reduce market volatility.

While many are cheering the hard fork, it puts Ethereum miners at a disadvantage. With the upgrade, a portion of the Ether that used to go to miners is now being burned instead of recycled. That means less income for miners.

Blockchain Size Doubles

Another change which is expected to bring more stability to the Ethereum blockchain is that it is doubling the size of the block. This change is designed to keep the blockchain half full at all times, reducing the severity of spikes in demand and helping to maintain fee stability.

Ethereum’s much anticipated hard fork went smoothly. This paves the way for Ethereum 2.0, which has been years in the making. It is expected to transform the cryptocurrency industry when it eventually launches.

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Automakers Commit to an EV Future

GM, Ford, and Stellantis Have Big Plans for EVs

General Motors (GM), Ford (F), and Stellantis (STLA) announced plans for half of all the cars and trucks they sell in the US to be electric by 2030. The broad commitment on the part of the three big Detroit automakers hinges on federal funding for research and development, buying incentives, and the creation of a national EV charging network. These were all built into the White House’s $1 trillion infrastructure bill, which is currently making its way through Congress.

When announcing their EV commitments, the car companies pointed to the need for the infrastructure bill to be passed quickly. The automakers’ decisions come as the White House announced tighter fuel-efficiency standards. By focusing on EVs, the vehicle makers will be able to meet those standards.

Public Charging Stations Are Part of the Push

The infrastructure spending bill earmarks about $7.5 billion for states and cities to construct public vehicle-charging stations. As it stands there are about 110,000 of these stations across the country. President Biden previously set a goal for there to be 500,000 public charging stations by 2030. The bill also includes over $6 billion for battery production and recycling, but the bill lacks tax credits to incentivize consumers to buy EVs—something the car industry is still pushing for.

While vehicle makers are enthusiastic about the shift to EVs, the transition will not be without hiccups. Wall Street analysts expect margins for the three car companies to take a hit as they transition to new manufacturing techniques and spend billions of dollars along the way.

EV Sales Small But Growing

EVs still make up a small portion of overall vehicle purchases, accounting for 3% of the US market in both May and June. But that number is growing as more consumers feel comfortable with EVs.

Traditional car manufactures are responding by pouring a collective $330 billion into the EV market over the next five years. Much of that money is going to overhaul plants so that they will be able to produce EV batteries. GM, Ford, and Stellantis recently committed to an ambitious EV goal and other traditional carmakers are hot on their heels. It will be interesting to see what is down the road for the EV industry.

Friday Fundings: Bolt, Hopin, and Human Interest

European Ride-Hailing Startup Raises $713 Million

Bolt, a European ride-hailing startup, raised $713 million in venture funding, giving it a $4.75 billion valuation. It was valued at roughly $2 billion in March. Sequoia, Tekne, and Ghisallo led the round, which also included participation from existing investors G Squared (GSQD), D1 Capital, and Naya.

Bolt wants to use the proceeds to expand into the online grocery-delivery market. It already delivers food for restaurants and is making a big push into delivery for grocery stores, promising to get food to customers in 15 minutes. Bolt is aiming to enter 10 European countries this year. But to become a leader in the super-competitive European market, Bolt expects to need even more capital over the coming years.

Virtual Events Startup Raises $450 Million

Hopin, a virtual events startup, raised $450 million in venture funding led by Arena Holding and Altimeter Capital. The latest funding round gives the startup a valuation of $7.75 billion, making it one of the most valuable tech startups in Europe. Hopin was valued at $5.65 billion in March.

Hopin’s platform enables companies to host online events with as many as 100,000 people. It has more than 100,000 customers and 17 million registered users. Proceeds will be used in part to prepare the company for a hybrid world in which events are held online and offline simultaneously. The startup is also eyeing an IPO in two to four years.

Digital Retirement Platform for Small Businesses Raises $200 Million

Human Interest, a startup which operates a digital retirement platform, raised $200 million in venture funding, propelling it to unicorn status. The funding round, which gives Human Interest a $1 billion valuation, was led by TPG’s The Rise Fund and SoftBank’s Vision Fund 2. (SoftBank is also an investor in SoFi.) The financing also included new and existing investors. So far this year Human Interest has raised $305 million.

The startup’s platform enables small businesses to launch a retirement plan in minutes. Demand for its services is surging with Human Interest tripling sales in 2020. The funding will be used to expand its integrations and partnerships with financial advisers, brokers, and payroll firms.