Major upgrades to the Ethereum network could help the cryptocurrency soar even higher. Here's a roadmap to the changes.

• Ether has soared to record highs, in part because of growing interest in the Ethereum network.
• But major changes are coming to the blockchain, which some investors say could send ether higher.
• Developers are overhauling how fees work and plan to make it much more environmentally friendly.
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Ether - the world's second-biggest cryptocurrency - soared to record highs above $3,600 in the week to Friday and had outstripped bitcoin with year-to-date returns of around 370%.

Analysts said a key catalyst has been growing interest from big players such as the European Investment Bank in the Ethereum blockchain network, on which ether runs.

Investors have been drawn in by the possibility of building decentralized financial contracts on the system and other applications such as non-fungible tokens, or NFTs.

But upcoming changes to Ethereum that aim to make the network bigger and more sustainable are also exciting investors, as they could send the ether price soaring even further.

Insider spoke to Ben Edgington, who is working on the upgrades for development company ConsenSys. He laid out the roadmap for the changes.

The 'London' upgrade will start to destroy ether coins

After tweaking how transaction payments work in April, Ethereum developers are preparing for a major overhaul to the fees system. The changes are due in mid-July, according to Edgington.

Under the current system, users send what's known as a gas fee to miners as payment for transactions to be verified, in a kind of auction. Miners complete transactions, and create cryptocurrencies, by using computing power to solve puzzles on the network.

But when the network is busy - as it increasingly is - the auction system means users have to bid larger amounts and estimate the appropriate fee, leading to volatility and sharp price rises.

To address the problem, Ethereum's developers have agreed to a major change, known as EIP-1559 in crypto jargon and set to take place during an event called the "London hard fork."

Under the new system, gas fees will be replaced by a mandatory and automatically determined base fee, which would fluctuate according to network congestion. Users will be given the option of paying miners tips if they need transactions completing quickly.

Read more: Fundstrat's head of digital assets research walks us through his $100,000 and $10,500 year-end price targets for bitcoin and ether - and shares the 8 tokens he's bullish on

But the most exciting part for many investors is that the network will start to destroy or "burn" some of the gas fee.

Edgington says: "Potentially, more ether will be burned that will be generated for miners." He added that this could make the supply of ether decline over time, "which actually trumps bitcoin monetary policy, which is fixed."

One analyst said earlier this year the burning of fees might lay the groundwork for "explosive growth" in the ether price.

Ethereum 2.0 aims to boost the network's size and sustainability

Developers are most excited about the momentous changes collectively known as Ethereum 2.0, which aim to make the network bigger and more sustainable.

First up on the road to Ethereum 2.0 is what developers are calling The Merge: a complete change in the underlying mechanics of the network, which Edgington says will hopefully be completed by the end of 2021, or in early 2022.

Currently, computers compete against each other to solve complex puzzles to verify the network and mine ether in what's called a "proof of work" system.

This makes the network secure, because it would take huge and costly amounts of computing power and energy to hack into - but is very bad for the environment.

Ethereum will instead be moving to a "proof of stake" system. This means people can validate transactions and mine according to the number of coins they hold and are willing to offer as a sort of down payment, Edgington said.

Each user that wants to verify transactions - and thereby earn themselves rewards - has to put up a sizable stake, for example 32 ether worth over $120,000.

The idea is that anyone wanting to attack the network would have to earn enough ether to pay more than the collective value of all the stakes to start altering the blockchain in a damaging way.

Edgington says there is already around $10 billion staked the proof-of-stake network, known as the beacon chain, which developers launched in December.

Ethereum developers are working hard to shift across the network onto the new system - The Merge - but it's not without risks.

One developer has described the process as "replacing the engine of an airplane while it is still flying." But they added: "The code in use will have been exhaustively checked, battle-tested, and checked again."

'Sharding' aims to expand the network

Yet Edgington stresses that "moving to proof of stake is not a scalability solution."

To try to expand Ethereum so that more applications such as NFTs, or decentralized finance contracts, can be built on it, developers will create new networks in a process known as sharding.

"This is like running 64 blockchains in parallel with the beacon chain to increase the capacity," Edgington says.

Simply put, creating more blockchain systems and tying them together by linking them to the main beacon chain should expand the overall network and make it more efficient, as opposed to the current system where everything is done on one big network.

"I expect within a year of delivering the proof of stake we'll have delivered the sharding solution," Edgington says. "But nobody's making a strict project plan, or deadline about this. It's ready when it's ready."

Read more: Ex-Ark analyst James Wang breaks down his bull case for Ethereum as its token breaches an all-time high of $3,300 - and explains why it could eventually reach $40,000