Quick take:
- Support for Ethereum Improvement Proposal 1559 is gathering traction.
- The ETH community is crowdfunding efforts to have it developed and implemented on the Ethereum blockchain.
- 43 ETH and $16,800 in DAI have been raised thus far.
- The EIP aims at solving the issue of high transaction fees such as the ones witnessed in mid June.
The Ethereum community has crowdfunded 43 ETH and $16,827 in DAI towards the development and possible implementation of EIP1559. The latter is an Ethereum Improvement Proposal that aims at solving the issue of high transaction fees brought about by network congestion as well as in cases where the sender erroneously inputs a larger than usual fee to process an Ethereum transaction.
The community fund is available via Gitcoin.co and provides an Ethereum address where any ETH based token can be sent. At the time of writing this, members of the Ethereum community have contributed the following digital assets.
- 43.48 ETH – approximately valued at $9,802 at a rate of $225 per Ethereum
- 16,723 DAI – approximately valued at $18,827
- 10 MCO – approximately valued at $41.15
- 15.45 USDT – approximately valued at $15.47
- 144 USDC – approximately valued at $144.64
- 0.0532 WETH – approximately valued at $12
Senior Ethereum developer, Eric Conner, has contributed $2,500 towards the EIP’s Gitcoin Grant.
I just gave $2,500 to the EIP-1559 Gitcoin Grant.
If you’re someone that wants to see this EIP happen, put your money where your mouth is and let’s work together as a community to get it funded.https://t.co/FJuOqM6ZMy
— eric.eth (@econoar) June 26, 2020
The Infamous 3 Ethereum Incidences with High ETH Fees
The drive to fund the development of EIP1559 comes only weeks after three Ethereum transactions on the 10th and 11th of June, shocked the crypto-verse due to the amount in fees paid by the sender.
In the first transaction, the sender spent 10,668 ETH ($2.6M) to send 0.55 Ethereum. For the second transaction, the same sender spent another 10,668 ETH to send 350 Ethereum. For the third transaction, a different sender spent 2,310 ETH ($530k) to send 3,221 Ethereum.
Due to the enormity of the fees in the first two transactions, Ethereum miners had reached out in a bid to solve the issue on the assumption that the high fees were inputted by mistake. However, when the sender did not reach out, the ETH fees worth over $5 million was distributed amongst miners. It would later surface that the transactions were by hackers who had gained partial control over an Ethereum wallet and were sending the transactions as a form of ransom.
How EIP1559 Solves High Transaction Fees
EIP1559 aims at replacing the current fee model with a mechanism that adjusts a base network fee according to the network demand. Furthermore, the Ethereum Improvement Proposal suggests that the BASEFEE to be decided by the protocol, and will be destroyed during each transaction. Miners will be incentivized separately using a GAS-PREMIUM. Ethereum users can additionally determine how high of a fee they will pay using a FEECAP.
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of EWN or any of its other writers. Please carry out your own research before investing in any of the numerous cryptocurrencies available. Thank you.