Vitalik Buterin proposes new changes to Ethereum gas fees
The Ethereum community is currently debating whether to implement the proposed changes that would change gas fees for transactions. Some want to increase them, some want them reduced and others are so far undecided on the issue. No matter what decision is made by developers, gaming could be impacted in a major way with the current status of ethereum’s blockchain.
Ethereum gas prices are a crucial part of the Ethereum network. Vitalik Buterin has proposed new changes to the system that would see the fees for transactions reduced by 50%. Read more in detail here: ethereum gas price.
This week, Vitalik Buterin, co-founder of Ethereum, presented a novel “multidimensional” approach to gas pricing. He believes that charging varying gas rates based on the resource utilized would provide customers with the best gas pricing.
Since DeFi’s launch in the summer of 2020, high Ethereum gas costs have been a recurring issue. People have been known to spend hundreds of dollars to access the network.
The anger over this scenario compelled developers to act, which they accomplished with the release of EIP 1559 on August 5, 2021.
EIP 1559 included a number of modifications, the most significant of which was the abandonment of the auction bidding mechanism in favor of a moving base fee structure. In other words, consumers bidding greater to have their transactions processed first would not boost gas fees.
According to an analysis of average gas prices in dollars, the months of June to August 2021 represent a time of (relatively) low gas prices, with prices hovering around $6/$7. However, after EIP 1559, gas prices have risen sharply, culminating at $62.84 on November 9, 2021. As of right now, the average charge is $37.33.
bitinfocharts.com is the source of this information.
With that in mind, some claim that EIP 1559 was a failure since the most important aspect in setting gas costs is network capacity (or lack thereof in this instance), not the mechanism employed to assign a transaction cost to an individual user.
As a result, how different would a “multidimensional” solution to the issue be?
Was EIP 1559, the Ethereum Improvement Proposal, a flop?
According to the raw figures above, EIP 1559 did not reduce gas prices, making it a failure in that regard.
Proponents of EIP 1559, on the other hand, claim that it was never intended to reduce gas prices, but rather to make them more visible and predictable.
The idea is that consumers would know how much it would cost to complete a transaction up front. They might then determine whether or not to proceed.
ConsenSys’ vision of the Ethereum network as a “global computer” does not now match the ordinary user experience.
Some claim that Ethereum is a victim of its own success and that the gas charge issue will ultimately be solved as a work in progress.
Buterin’s new “multidimensional” approach entails what?
Buterin remarked that various Ethereum Virtual Machine (EVM) resources have varied gas use needs in another effort to tackle the issue.
Further, he distinguishes between “burst capacity,” which is the amount of capacity we could manage for one or a few blocks, and “sustainable capacity,” which is the amount of capacity we would be comfortable having for an extended period of time.
“The current method, in which all resources are integrated into a single multidimensional resource (“gas”), fails to account for these distinctions.”
The updated “multidimensional EIP 1559” would modify the ratio of burst and sustained capacity using a mathematical formula. Buterin proposes two possibilities based on this:
The first step is to determine resource gas fees by dividing the total base cost by the base fee for each unit of resource. This would result in a per-block set base charge.
Alternatively, the basic charge for consuming resources is established, but each resource has burst restrictions. “Priority fees” would also be paid to the block manufacturer.