Vitalik Buterin Proposes New Ethereum Fee Structure
Vitalik Buterin, creator of Ethereum, has proposed a a new fee structure for the second biggest cryptocurrency by market capitalization.
In a new blog post, the crypto billionaire lays out “Multidimensional EIP-1559”, and mentions how different resources and functions of the Ethereum network demand different amounts of gas, yet all of them are bundled together. Therefore, the same amount of gas is being used for different requirements, and Ethereum users are often paying more than the network technically requires them to.
Buterin admits the EVM is forcing “sub-optimal” gas prices on users.
“Shoehorning all resources into a single virtual resource (gas) forces the worst case / average case ratio to be based on usage, leading to very suboptimal gas costs when the usage-based ratio and the ratio of the burst and sustained limits that we know clients can handle are very misaligned.”
While Buterin lays out mostly non layman-friendly math equations, the proposal boils down to two main solutions using ‘multi-dimensional’ fee structure.
The first proposal would be to calculator gas costs for each resource individually by dividing the base fee of one unit of a resource by the base gas price.
The second proposal is to set a base fee for resources but including a burst gas limit rather than having fixed fees. This solution also includes “priority fees’ which would be based on a percentage.
Buterin’s proposal comes months after EIP-1559, which restructured Ethereum’s fee structure to burn a portion of gas fees rather than sending them to miners. While it was hoped that the fork would also lower gas fees, that hasn’t materialized yet.
The Ethereum founder's proposal is still in a discussion phase, and it's unclear whether or not it will end up being implemented.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.