Popular Science | Understand Ethereum Improvement Proposal EIP-1559 in one article

DeFi's annualized yield of over 1,000 GWei has been driving up Ethereum's Gas Price crazily in the third quarter. From 20 GWei at the beginning of the year, it broke through 1,000 GWei after Uniswap airdropped iPhone 12 to everyone. The 50-fold increase is insane.

High transaction fees have made DeFi's dream of open inclusive finance impossible. Two years after CryptoKitties blocked Ethereum in 2017, how to reduce Ethereum transaction fees has once again become a hot topic. This time, in addition to the Layer 2 solution, another more sophisticated optimization solution has come into everyone's attention, namely EIP-1559 .

In the Ethereum network, there is an upper limit on how many instructions each block can process, which is what we call the Block Gas Limit. One of the main reasons for limiting the Block Gas Limit is that when it is higher than a threshold, the speed at which Ethereum FullNode synchronizes blocks may not keep up with the speed at which blocks are generated, causing the network to gradually become unavailable.

EIP-1559 is a proposal to improve the Ethereum transaction fee mechanism jointly proposed by Ethereum co-founder Vitalik Buterin and ethhub_io founder Eric Conner. The core idea is very simple - when the demand for network transactions is high, increase the Block Gas Limit, and when the demand is low, reduce the Block Gas Limit, so that the average Block Gas Limit over a period of time remains unchanged, but can dynamically cope with short-term demand peaks.

In EIP-1559, transaction fees are divided into two parts, one is the basic fee agreed upon by the entire network, and the other is the tip specified by the user. When the utilization rate of a block's Block Gas Limit is higher than 50%, the basic fee Gas Price will increase to 112.5% ​​of the original ; on the contrary, if the utilization rate is lower than 50%, the basic fee Gas Price will decrease to 87.5% of the original .

The generation of basic transaction fees for each transaction is part of the prosperity of the Ethereum ecosystem, and all participants should share this benefit. Therefore, in EIP-1559, all basic transaction fees will be burned directly to reduce the supply of ETH in the entire network. Since the burning of basic transaction fees will make miners unwilling to package transactions, all users who are anxious to send transactions to the chain can increase the tips in the transaction to encourage miners to package their transactions as soon as possible.

EIP-1559 was proposed in April 2019. 18 months have passed, and it is still unknown when it will be integrated into Ethereum. The slow pace of Ethereum ecosystem updates has once again been highlighted .

EIP-1559 is important because it can bring the user experience that people expect and break the current user-unfriendly status quo of the fee market.

In the next issue, we will introduce whether EIP-1559 is applicable and how to implement it in the Conflux network environment.

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