Currently, high gas costs on the Ethereum network are becoming real weapons against users, who find it unacceptable to have to pay high amounts to see their transactions confirmed on this blockchain.
Ethereum gas costs have been on the rise this week, peaking so far at over $38 USD per transaction, subjecting network users to a true death crusade. Throughout the history of Ethereum (ETH), the net blockchAin most used in the digital world for the creation of decentralized applications (dApps), smart contracts (smart contracts) and protocols DeFiThis is the highest gas cost ever seen on the network, which is causing great inconvenience and anger among users and participants of the thousands of protocols based on this blockchain, as almost all of the profits obtained are consumed.
To overcome this problem, Ethereum developers presented the improvement proposal EIP-1559 as a possible solution to the network's high gas costs, although it is a proposal that has been debated for some time among Ethereum participants, and is not to everyone's liking. Still, Ryan Berckmans, Ethereum developer, commented on his Twitter that EIP-1559 could see its arrival in July, along with the next hard fork, or Ethereum hard fork, called “London”.
Berckmans highlighted that EIP-1559 is presented as a powerful solution that will benefit ETH users and will also help scale the network to achieve more secure and reliable transactions.
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What is EIP-1559?
The Ethereum Improvement Proposal, EIP-1559, is a proposal designed and presented by Vitalik Buterin, co-founder of Ethereum, along with other developers, who in 2019 began to devise an effective way to change the network’s fee system and make it more suitable for its participants and users. In general terms, this proposal seeks to implement a novel system that allows predicting how much Gas must be paid for a transaction to be included in a block and quickly confirmed on the network, adjusting the block size when the network is in high demand and congested, to reduce fee costs. In this way, commission rates on Ethereum will remain relatively the same, regardless of how low or high demand the network has at any given time.
“A transaction pricing mechanism that includes a fixed network fee per block that is burned and dynamically expands/contracts block sizes to address transient congestion.”
As you can see, this is a system that promises great benefits for users and investors who use Ethereum, although not so much for the network's miners. In fact, it is these miners who oppose the activation of EIP-1559 in the blockchain, fearing that their profits will be strongly affected when it is implemented.
The opposition of the miners
The fear of Ethereum miners is due to the implications that the proposed improvement to network fees may have on their earnings. reported As reported by Bit2me News recently, most of ETH miners' revenue comes from transaction fees, not from mining itself, although this activity is still profitable within the network.
The data from The block show that so far this month, over 53% of mining revenue comes from commission fees – some $631 million to date.
Source: The Block
Although these revenues may be very attractive and favorable for miners, as we already mentioned, it is a deadly crusade for network users, who are seeing a large part of their earnings disappear because of this. Even the massive wave of liquidations in DeFi, which amounted to more than 117 million This February 22nd was a bloodbath for many traders and investors who were unable to close their positions in time and lost their money, due to the network's high commissions.
To seek consensus with this important part of Ethereum, the developers are calling for a meeting which will be held next Friday, February 26, with the network's miners so that they can express their concerns and proposals.
Optimism in Ethereum
On the other hand, although it has not yet been defined whether EIP-1559 will be activated in the “London” fork in July, and it is still a proposal under study and development, its possible arrival has filled developers and users of the network with great enthusiasm and optimism, since the proposal also implements a token burning mechanism that can make ether a deflationary cryptocurrency, since it would reduce the issuance and supply of ethers in the market; something that would undoubtedly boost its value in the future.
Some developers, such as Berckmans, dare to predict that the price of ETH could climb to $20.000 USD per unit, if the proposal is finally implemented within the blockchain network.
So, in essence, EIP-1559 is one of the most important upgrade proposals for the Ethereum network, after the long-awaited Ethereum 2.0, which began on December 1, 2020.
At the time of this edition, ETH is trading on the markets with a value of $1.650 USD, while transaction commission rates on the network are, on average, $20,6 USD.
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