Vitalik proposes new ‘multidimensional’ Ethereum fee structure

Vitalik Buterin, co-founder of Ethereum, has put his thinking caps on again to try and improve the current fee structure.

The “Multidimensional EIP-1559” proposal was posted on Jan. 5, in which Buterin pointed out that different resources in Ethereum Virtual Machine (EVM), have different gas usage requirements.

He also stated that there are different limits to short-term “burst”, as opposed to long-term “sustained”, capacity in the EVM. He cited block data storage and witness data storage as examples.

“The current scheme, in which all resources are combined into one multidimensional resource (‘gas), is not able to handle these differences.

He explained that if these limits are not properly aligned, the problem is that all of the resources can be channeled into one resource.

Buterin explained his complex proposed changes using a lot of technical math. In a nutshell though, the proposal offered two possible solutions to “multidimensional pricing.”

The first option calculates the gas cost of resources like call data and storage. This is done by subdividing the base fee per resource by the total fee. The EIP-1559 algorithm includes a fixed-per block network fee as the base fee.

This second option, which is more complicated, sets a base charge for resources use but also includes burst limitations on each resource. The second option would include “priority fees”, which are calculated by multiplying the base fee by the percentage.

He said that the downside to multidimensional fees is that block builders wouldn’t be able accept transactions in low-to-high order fee-per gas. They would need to balance the dimensions and solve other mathematical problems.

Related: Ethereum supply briefly turns into deflation when gas prices spike

The priority at the moment is the next major upgrade, so it remains to be seen if the proposal will be approved. The Ethereum network is currently preparing for “the merger”, which will dock Ethereum’s blockchain with the Beacon Chain, effectively ending Proof-of-Work. The Kintsugi testnet is being tested and full deployment is expected to take place in the first quarter.

EIP-1559 was deployed as part of the London upgrade in August to burn a portion the transaction fees to make gas pricing more predictable. According to the burn tracker, 1.36million ETH valued at $4.7 billion at current prices have been destroyed since it was made live.

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Eileen Wilson

Eileen Wilson –Technology and Energy My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.

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