It’s a raising problem to the people running programs on Ethereum network as the cost of Ethereum has increased some 500% since April. The increment in gas fee issue needs immediate fixing if dapps can be run reliably on the world’s leading smart-contract blockchain.
There is an update proposal namely Ethereum Improvement Proposal (EIP) 1559 is expected to reduce transaction costs by reshaping the network’s fee market. The update may bring a high change and Ethereum teams are working on implementing blockchain’s software.
The proposal, EIP 1559
EIP 1559 implements algorithm price discovery in an attempt to solving fee pressure. EIP prices out certain users when demand gets too high and also dynamically changes the size of blocks depending on the number of transactions. This has been done in two parts one is a burnt base fee (BASEFEE), which will reside at a set level, for transacting and another is a tip to miners. The tip which is compensation to miners can be increased to skip the transaction line hoped to alleviate congestion.
Actually just because of the fee issue of Ethereum, it’s completely unfair to dump the existing model. EIP 2593 written by MetaMask developer Dan Finlay lets a user fine-tune a transaction fee to the lowest amount possibly by slowly escalating the transaction fee until a miner decides to include it into the next block. As Ethereum developers liked the idea, this one can be used in addition to EIP 1559 as a tweal to the latter’s tipping feature.
Ethereum transactions will be paid in the blockchain’s native token with EIP 1559. The base fee is designated in ETH, paid to the network and then burnt when a transaction takes place, decreasing the outstanding supply of ether after a long period of time.
A new deflationary pressure into Ethereum’s economic model is raised here because of the burning issue can give the network a high value proposition in the long term. On the off chance, BASEFEE is burning lots of ETH, it can take the value of ETH to high.
Expectation for larger mining incentives
As the base will be constant, it’s better for users and it cuts user’s worry about their sent transactions. Ethereum will not pay mining rewards at all at some point and miners may have the most lose from the proposal as gigantic transaction fees are unlikely to take place under the new system. The new system is devoid of network congestion issue. Mining pools expect a better fee model design. It is expected that Ethereum network will be prioritized as a better network upon maximizing every block reward.