The Ethereum blockchain is one of the most popular ones in the crypto market and has the attention of a large audience. According to reports, the current fee structure of the Ethereum network is being revised by the co-founder of Ethereum, in an attempt to improve it.
Vitalik Buterin, the co-founder of the network, believes that calculating the gas prices for various resource usage can help revise the current fee structure for Ethereum.
Ethereum is the second-most popular crypto asset in the market and has an undeniable value and significance. Major entities have been in favor of the popular altcoin and some even anticipate that it will outperform the flagship crypto asset in the future.
Therefore, if you are also interested in stepping into the crypto space then make sure you choose the best crypto exchange to buy Ethereum.
On the other hand, if you want to trade Bitcoin or Ethereum then sign-up on Phemex today with our link and claim a bonus of up to $4,100 on your initial deposit. (Bonus may vary based on deposit amount)
Claim up to $4100 in Bonus
Could the Improved Fee Structure Affect ETH’s Price?
Vitalik Buterin announced an improved fee structure in a post a few days ago. The proposal has been titled “Multidimensional EIP-1559”.
According to Buterin, there are different resources in the Ethereum Virtual Machine (EVM). All the different resources also vary in terms of gas usage demands.
There are also different limits for short-term “burst” capacity and “sustained” capacity within the EVM. Buterin cited some data and stated the following:
“The scheme we have today, where all resources are combined into a single multidimensional resource (‘gas’), does a poor job at handling these differences.”
The co-founder of Ethereum did acknowledge that the changes he is proposing may be quite complex and technical. However, his proposal offered two possible solutions, which require “multidimensional” pricing.
Here are the two potential options:
- The first option is related to the base fee, which is fixed and included in the EIP-1559 algorithm. This option would calculate the gas cost for resources such as storage and call data. This would be achieved by dividing the base fee for each unit of these resources with the total base fee.
- The second option is a bit more complex. It will set a base fee for every resource but it will also include burst limits on each resource. This option will also include “priority fees” set as a percentage. This fee will be calculated by multiplying the percentage with the base fee.
There is also a drawback of the multidimensional fee structure, which is that “block builders would not be able to simply accept transactions in high-to-low order of fee-per-gas.”
The improved fee structure has been proposed, however, it is yet to be approved. This can take time since the next big priority is the upgrade. The Ethereum network is getting ready for its merge with Beacon Chain, which will end proof-of-work. Once the merge and the improved fee structure are achieved only then can we see how the price of the ETH token will be affected.
What Should Crypto Investors and Traders Know?
Ethereum is undoubtedly one of the most significant digital assets in the market and has a huge customer base. Even though its price has declined in the past few weeks, it has not affected its value.
The most popular altcoin is currently trading at $3,209 (at the time of writing).
Therefore, if you are interested in buying this altcoin then you can take a look at our Ethereum buying guide and choose a suitable platform.
As a beginner, you can click on SwissBorg or Kraken (U.S. citizens), if you are looking to buy digital currencies such as BTC or ETH.
Up to 50% discount on fees