Investment

The ethereum crisis with high gas charges will not be resolved by EIP-1559: Coin Metrics

The report by analytics service provider Coin Metrics has penetrated the world of Ethererum transaction fees, pointing out that they are still at the highest levels and that it is unlikely that even the much-announced impending network upgrade will alleviate the problem.

According to Ethernet content report According to Coin Metrics, the median charge for Ethereum was consistently above $ 10 for most of 2021. The average transaction fee for Ethereum was comparable to just $ 5.70 at the peak of the 2017/2018 bull run.

He attributed part of this increase to the increase in ETH prices themselves, which will make gas more expensive. Since the beginning of 2021, the ETH has risen 125% to current prices, despite a 19% correction from its all-time high of $ 2,050. At the same time, however, it was median gas price increased by 532%.

Different types of transactions require different amounts of gas – a simple ERC-20 token conversion consumes much less gas than a complex smart contract operation for an automated market maker, for example. However, he noted that rather than DeFi, which is the main cause of high gas charges, it is generally more transactions.

“Since January 2020, the amount of gas used per transaction has been declining.” This shows that the increased complexity of transactions is not responsible for high transaction fees. “

Ether transactions are currently being auctioned, with those who pay more taking the gas miner’s priority and faster transactions than those that set a lower gas limit.

The report states that the current high charges are due to the fact that the units are consistently full, around 95%, and are from mid-2020 and the DeFi boom. The research found that in March 2021, the Ethereum blocks were 97% -98% full.

Fullness of the Ethereum – CoinMetrics block

This explained that miners have to determine which transactions to include in the extraction of new blocks, and each block can only contain a limited number of transactions (on average 160 to 200) due to the maximum block size.

“So miners naturally prefer transactions with the highest gas prices because they will make more money if they are included.”

The report concluded that highly anticipated Network upgrade EIP-1559, which was designed to change the auction mechanism and burn part of the charges, is unlikely to solve the problem of high gas costs and only scaling solution will be a real long-term fix.

Coin Metrics explained that the upgrade will only help to anticipate fees, because the high fees are caused by the scalability issue.

“If Ethereum can only process a few hundred transactions (on average) per block, there will still be high fees if the use of DApp continues to increase.” Natural gas prices will continue to be high as long as there is strong competition in the block space. “


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button