Ethereum Gas fees continue to rise, can the EIP-1559 proposal break the predicament?
The congestion problem of the Ethereum network has been around for a long time. On the evening of February 22, due to the violent fluctuation of ETH, the Gas fee of Ethereum soared for a short time. According to GasNow, if the transaction is to be completed within 15 seconds, the Gas fee is as high as 1220Gwei. On February 23, the Gas fee of Ethereum rose again, reaching 34337.81 ETH, second only to 40554.57 ETH on September 2, 2020, which is the second highest single-day fee of Ethereum.
What is the EIP-1559 proposal?
The Ethereum EIP-1559 proposal, first proposed by Ethereum Vitalik in 2018, is expected to make the fee market on the Ethereum blockchain more predictable and alleviate congestion. The founder of Ethereum, V God, previously commented that the introduction of EIP-1559 will solve the problem of "high gas fees" on the Ethereum network, which is very worth looking forward to and may become one of the big events in 2021.First of all, EIP-1559 proposes a new block network billing model. In the current Ethereum system, a high-price competition model is prevalent among miners. Miners tend to prioritize transactions with high fees in order to maximize their profits. Therefore, when the demand for transactions expands, the situation will quickly get out of control. The EIP-1559 scheme makes the block network fee include base fee + tip, in which the base fee is destroyed and will not enter the miner’s pocket, and the miner can only get tip + new block output reward. Since the basic fee will not fluctuate drastically due to immediate changes in network demand, users can avoid the inefficiency caused by the highest price competition to a certain extent (but the tipping model still uses the highest price competition).Secondly, the EIP-1559 proposal also introduces a block slack mechanism, which enables the Ethereum network to package large blocks when the transaction volume surges, and package small blocks when the transaction volume is small, so as to cope with instantaneous network congestion.Finally, EIP-1559 requires all transactions in the protocol to pay the base fee with ETH. Since the base fee in each transaction will be destroyed, and the greater demand for Ethereum’s block space will push up the base fee, yes Continued high demand for Ethereum block space will create deflationary pressure on the supply of ETH.Controversy over the EIP-1559 proposal
Although Ethereum core developer Danny Ryan predicts that EIP-1559 will be launched this year, there are currently voices of opposition to the EIP-1559 proposal. Several Ethereum mining pools are uniting to block the implementation of the currently controversial EIP-1559 proposal. They said the proposal unfairly cut into their profits.Tim Roughgarden, a professor of computer science at Columbia University, also said after conducting an economic analysis of EIP-1559 that the continued high transaction fees are a scalability issue, not a mechanism design issue. During periods when demand remains relatively stable, regardless of the mechanism employed, actual transaction fees cannot be expected to fall significantly below market settlement prices, he said.Regarding the EIP-1559 proposal, what users are most looking forward to is its solution to the high gas fee, but this expectation has inevitably turned into a misunderstanding of EIP-1559, thinking that with EIP-1559, the high gas fee can be eliminated or It is worthless to think that EIP-1559 will not reduce Gas fees.
In fact, the function of EIP-1559 is to reduce the extra money paid due to inaccurate gas price prediction through the block relaxation mechanism and fixed payment without guessing, but it cannot be extended to the fact that with EIP-1559 Gas fee will not It will reach tens of dollars or the Gas Price will not reach 1000gwei. The design purpose of EIP-1559 is to prevent users from wasting a lot of money on "excessive" Gas fees, and "excessive" refers to higher than the supply and demand point Yes, the extra money paid for inaccurate forecasts.
The original design intention of EIP-1559 is not to completely solve the problem of Ethereum’s high gas fees. As V God said, EIP-1559 is only a temporary solution, and improving the scalability of Ethereum needs to be solved by ETH2.0. But it cannot be said that EIP-1559 is meaningless, at least in the short term, before ETH2.0 is launched, it may be the best solution to let EIP-1559 explore more development directions.
This article only represents the personal views of encrypted notebooks and does not constitute any investment opinions or suggestions.
This article only represents the personal views of encrypted notebooks and does not constitute any investment opinions or suggestions.
