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Vitalik Buterin Proposes A New Ethereum Network Fee Structure

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Vitalik Buterin, The co-founder of Ethereum (ETH), has submitted an official proposal for a new fee structure for the Ethereum network, dubbed “multidimensional EIP-1559,” which refers to the previously adopted Ethereum Improvement Upgrade (EIP) 1559.

According to Vitalik Buterin in a recent blog post, Ethereum currently employs a strategy in which the same amount of gas is used for various network demands. Average transaction data and call data, for example, consume only 3% of the gas on a block, whereas a “worst-case” block contains 67x more data.

The use of a single resource for both worst-case and average-case scenarios is inefficient. Simply put, users of the Ethereum network pay more when they could pay less for a network action.

The new fee structure will provide a fair framework in which gas will be used more efficiently, allowing users to spend less on various types of operations such as minting, transactions, calldata, and so on.

Vitalik Buterin has proposed two approaches to implementing the new price structure on the network: the gas execution cost remains constant, but the running fees vary depending on the type of resource employed. The base fee for each unit of the resource will be divided by the total base fee.

 

Buterin claims that the second “purer” option necessitates the establishment of a fixed base price and infinite block gas. Priority fees are paid to people who create blocks on the network, and they are equal to basic fees plus a percentage.

 

The update will bring another layer of security to the network, in addition to a more adequate pricing structure. It is unclear whether the idea will be approved because the emphasis at the time is the next major improvement.

The Ethereum network is presently preparing for “the merge,” which will connect the Ethereum blockchain to the Beacon Chain, essentially ending the usage of the proof-of-work (PoS) consensus process. Testing on the Kintsugi testnet is already underway, and complete deployment is scheduled in the first quarter of this year.