If there’s one thing this summer’s DeFi boom taught us, it’s that the Ethereum gas fee structure needs reform.<\/p>\n
Although things have calmed down since the summer, rip off fees, and stuck transactions<\/a> are still a problem for Ethereum users. So much so, a failure to address the problem will only give rival blockchains an edge in stealing market share.<\/p>\n The issue comes down to Ethereum’s auction transaction pricing mechanism. Under this system, users are encouraged to outbid others to get their transactions mined onto the blockchain quicker.<\/p>\n This incentivizes miners to fill new blocks with transactions that make them the most money. As such, the auction system leads to “bidding wars” of ever-increasing gas fees. Also, the knock-on effect sees low-profit transactions left in the network queue.<\/p>\n Core developers are well aware of the problem. Their response is the Ethereum Improvement Proposal (EIP) 1559<\/a>, which looks to tackle the fee mechanism.<\/p>\n The original paper from 2018 that introduced EIP 1559:https:\/\/t.co\/eav6Y1MtIR<\/a><\/p>\n — vitalik.eth (@VitalikButerin) June 30, 2020<\/a><\/p><\/blockquote>\n\n