Fee Market Coming to Ethereum This Year Says Danny Ryan
The fee market Ethereum Improvement Proposal (EIP) 1559 is expected to launch this year according to Danny Ryan, an eth developer.
“R&D on this item has picked up steam in the past 12 months, and we optimistically will see 1559 fee mechanics on mainnet in 2021,” Ryan said.
Just recently there were suggestions this EIP is pretty much finished code wise, but it appears to have attracted some resistance from miners.
Ryan however says this improvement proposal is very beneficial for the ethereum network, stating:
“1559 style fee mechanics will be native to eth2’s sharded data layer. This will allow for a better UX to Ethereum’s data consumers when attempting to chuck data into the Ethereum network, most tangibly aiding rollups in confidently checking their block data into the beacon chain.”
The fee market proposal makes network fees more predictable by setting a base fee that targets 50% network usage, with the fee then increasing or decreasing accordingly.
That base fee is burned, changing the supply and demand mechanics, with users able to add an extra fee if they really want priority.
Once there is data sharding, this predictable fees mechanism will allow for more efficient usage of second layers like rollups, which host some of the data on-chain.
It is expected to go out after Berlin, the much delayed eth1 upgrade that doesn’t contain any juicy EIP as far as we are aware.
Berlin might go out by spring, with the fee market proposal then following perhaps even by summer, while Ryan says optimistically it should be out sometime this year.
At which point the scarcity of ethereum will change depending on network usage as a percentage will be burned every day through the base fee mechanism.
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