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Tuesday, May 24, 2022

Vitalik Has Proposed A New Fee Structure For Ethereum

Vitalik Buterin, the co-founder of Ethereum, has decided to improve the fee structure of the cryptocurrency yet again, after changing it recently. The proposal has been titled Multidimensional EIP-1559 and was laid out as a blog post on Wednesday in which the founder noted that most of the different resources used in the EVM have quite a few different demands in terms of its gas usage.

He further added that there have been different limits for short-term burst capacity which is directly in contrast with the sustained capacity within the EVM, where he cited examples of block data storage, block state size changes, as well as witness data storage. 

Vitalik Buterin Has A New Plan For Ethereum

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Vitalik believes that the main problem that has been plaguing Ethereum is that channeling every single form of resource into a single one would definitely lead to very sub-optimal gas costs when the limits end up misaligned. Buterin then went on to outline the fairly complicated changes that he has proposed with a lot of technical math going his way- but to put it in a nutshell, the proposal was all about offering two interesting solutions through pricing multidimensionally. 

The first option, according to Vitalik, would be to calculate the cost of gas for resources such as storage and call data by dividing the base fee for every single unit of the resource by the total base fee in the end. The base fee is simply a fixed-per-block network fee that is included in the Ethereum Improvement Proposal 1559 algorithm.

The second proposal, albeit a little more complex, would set a base fee for using resources but would then include severe burst limits on every single resource. There would also be a majority of priority fees, which have been set as percentages and end up being calculated by multiplying the percentage of the base fee.  

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Vitalik has stated that the major drawback to this multidimensional fee structure is that most of the block builders would never be able to simply accept transactions in order of high-to-low.  

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