The EIP-1559 is expected to substantially bring down the average transaction fees. It is well known that persistently high transaction fees is a scalability problem and that it is not a mechanism design problem.
Also, EIP-1559 is expected to decrease the variance in transaction fees and the delays, which are experienced by users by virtue of the flexibility of variable-size blocks.
EIP-1559 is focused on improving the user experience by virtue of easy fee estimation, by an “obvious optimal bid,” which is outside of periods of rapidly increasing demand.
The short-term incentives for miners is to execute the protocol as intended. It is as strong under EIP-1559 as with first-price auctions.
Also impediments like double-spend attacks, censorship attacks, denial-of-service attacks, and long-term revenue-maximizing strategies like the base fee manipulation appears to be as strong under EIP-1559 like in the case of first-price auctions.
EIP-1559 will definitely decrease the rate of ETH inflation by virtue of the burning of the transaction fees.
In this regard, Sydney Ifergan, the crypto expert tweeted: “I see Ethereum (ETH) are exploring different designs to bring down the transaction fees. Hi-tech intellects and naïve investors making extreme behaviors in the ecosystem co-exist.”
The focus of alternative designs consists in paying base fee revenues forward to miners of the future blocks as opposed to burning them and also replacing variable user-specified tips by fixed hard-coded tip.
However, it is well known that EIP-1559’s base fee update rule are somewhat arbitrary and are to be adjusted with time. The variable-size blocks also enable a new and expensive attack vector like overwhelming the network with a sequence of maximum-size blocks.
The hardest part of all, the fuel cost in can never go down. It is very clear that Transaction Fee Mechanism Design for the Ethereum Blockchain are in progress.
Ethereum (ETH) Forks Changes Updates
When lot of changes are happening in the Ethereum Ecosystem, people who are holding Ethereum are wondering if they need to do anything. Many of them who have invested to now know anything other than buying and holding and selling when the entire mob does it. They are always lost when they hear about forks, changes and other updates in the ecosystem.
Several of them are not still clear about Ethereum. Several naive questions are here in the ecosystem. There are theories about whether this is good for ETC and also basic questions about reallocation of mining power and others. Some of them are even asking if it is the same hardware or otherwise.