Why is EIP-1559 needed?

Editor's Note: This article comes fromDecentralized financial community (ID: China_DeFi), reprinted by Odaily with authorization.

Editor's Note: This article comes from

Decentralized financial community (ID: China_DeFi)

, reprinted by Odaily with authorization.

By Tim Beiko of ConsenSys, one of the main leads of EIP-1559

Benefits of EIP-1559

EIP-1559 is a proposed change to the Ethereum fee market. The proposal will provide Ethereum with user experience, economic and security benefits.secondary title

UX Benefit: Include Transactions Faster

Transactions on Ethereum often take a long time to wait. Because blocks are always full, each new block is filled with the highest paying transactions since the previous block. If a transaction is not immediately included (which usually requires very high gas fees), it is difficult to estimate when it will be included.

According to EIP-1559, blocks can be up to "200% full", which means that if the gas limit is set to 12.5m, then blocks with up to 25m of gas will be valid. The block will also include the minimum price required for the transaction, BASE FEE. When the block is >100% full, BASE FEE will increase. when block

When <100% full it will drop.

This means that most of the time, blocks will have 100% "extra" capacity, and they can be filled with transactions. Therefore, as long as the transaction fee sent is higher than BASE FEE, and includes the miner's tip, it will be included in the next few blocks.

From transaction sending to transaction inclusion, BASE FEE will rise during this period. To help with this, transactions specify the maximum amount they are willing to pay for inclusion, the FEE CAP. The sender of the transaction will be refunded the difference between FEE CAP and BASE FEE (which has been canceled) and TIP (paid to the miner).

From another perspective, 1559 makes the included price of the transaction explicit in the protocol, rather than implicit as it is now.

For example, if the "market price" for inclusion is 100 gwei, and the user wants to ensure quick inclusion, the incentive today is to pay > 100 gwei (which is hard to estimate as that value is not part of the protocol), and all The bid will be used to calculate the transaction price. At 1559, if the BASE FEE is 100 gwei, the user can place a FEE CAP of 200 gwei, a tip of 3 gwei, and they only need to pay the BASE FEE and TIP that contain the block. The difference between 200 gwei FEE CAP will be refunded to the sender.

Better Transaction Fee Estimation

economic benefits

Another notable UX improvement of 1559 is that it makes it easier to estimate transaction fees, whether it is a 1559-style transaction or a traditional one.

As mentioned earlier, estimating the transaction price of the 1559 model is simple: set the above FEE CAP higher than the BAES FEE, or with the greatest willingness to pay, set the TIP to be enough to compensate the miners for whom it calculates the cost and risk blocks. price. (Wallets can default this value and update it over time, so end users don't necessarily need to manually set it).

Interestingly, 1559's simple fee estimates also make traditional transactions have better estimates (still supported). By looking at historical BAES FEE and TIP values, the transaction estimation service will be able to provide better estimates than currently available.

economic benefits

Transaction fees need to be paid in ETH

Also known as "preventing the economic abstraction of ETH". EIP-1559 requires all transactions to use the BASE FEE of the ETH payment protocol. While this may sound trivial, under the current fee market, there is no guarantee that transaction fees will be paid to miners in ETH, and even the miners themselves do not necessarily use it for their on-chain transactions.

In other words, today, one can pay miners off-chain (or on-chain in other assets like DAI, USDC, etc.) to include their transactions with zero gas fees. This could lead to ETH not being the primary currency of the Ethereum network.

In 1559, since BASE FEE will be burned during the transaction execution process and must be paid by ETH, the transaction fee needs to be paid on the chain. Obviously, miners are free to charge fees for other transactions, but they will need to obtain ETH to pay for transactions paid in another way BASE FEE, which is economically equivalent to users paying transaction fees directly with ETH.

Higher block space demand creates deflationary pressure

Given that BASE FEE is burned as part of every transaction, and as demand for block space on Ethereum increases so does BASE FEE, the continued high demand for block space on Ethereum will put deflationary pressure on the supply of ETH . In other words, the more people wanting to use Ethereum, the higher the BASE FEE, and the more Ethereum is burned overall and per transaction.

This fits with the philosophy of “minimum viable insurance,” creating a positive feedback loop between network usage and network value.

Benefits

Reduced risk of brachycephalic reorganization

As block transaction fees increase, miners have an increasing incentive to do small chain reorganizations near the head to capture high-paying transactions into their own blocks, rather than filling the pockets of competing miners.

In 1559, with the vast majority of transaction fees burned, miners had much weaker incentives to do near-head shuffling.