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Vitalik Buterin Suggests New Fee Structure for Ethereum

Thu, 01/06/2022 - 12:20
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Arman Shirinyan
Vitalik Buterin shows the world a new way for user fees on the Ethereum network
Vitalik Buterin Suggests New Fee Structure for Ethereum
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Vitalik Buterin has released an official suggestion of a new fee structure for the Ethereum network, called "multidimensional EIP-1559," referring to the previously implemented EIP-1559 upgrade.

The suggestion in a nutshell

Behind the technical lingo, the calculations and formulas are simple suggestions that might, in fact, change the way fees work on Ethereum: the different amounts of gas will be used for different operations on the network.

Today, Ethereum utilizes a scheme in which the same amount of gas is being used for different needs on the network. For example, average transaction data and calldata spend only 3% of the gas on a block, while a "worst-case" block contains 67x times more data.

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The usage of a single resource for both worst-case and average-case scenarios does not work optimally. Put simply: users of the Ethereum network pay more when they could pay less for an operation on the network.

The new fee concept will create a fair structure in which gas will be used more optimally, allowing users to spend less on various types of operations like minting, transactions calldata and more.

Ways of realization

Buterin has suggested two ways of realizing the new fee structure on the network: the gas execution cost remains fixed and the operating costs depend on the type of resource used divided on the base fee.

The second, "purer" option, according to Vitalik, requires the implementation of a fixed base fee and unlimited block gas. Priority fees paid to those who produce blocks on the network equals base fees plus a percentage.

In addition to a more sufficient fee structure, the update will add another layer of protection to the network.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.