EIP-1559: The Transaction Pricing Revolution of Ethereum

EIP-1559 is an important proposal aimed at addressing the transaction pricing issues of the Ethereum network. This proposal was put forward by members of the Ethereum community in November 2018 and made significant adjustments to the existing transaction pricing mechanism.

Core Contents of the Proposal

The core change of EIP-1559 lies in transforming the original market auction mechanism into a model of base fee plus tips. Specifically:

1. Base fee: Each block has a fixed base fee, but it is dynamically adjusted based on network congestion.
2. Tips: Users can decide whether to add a tip to incentivize miners to prioritize packaging transactions.
3. Dynamic Block Size: Introduce a scalable block size design to cope with short-term network congestion.

The adjustment of the base fee follows a certain algorithm, which is increased or decreased based on the gas consumption of the previous block. It is noteworthy that the base fee will be directly burned and will not belong to the miners.

Impact on All Parties

Miner:

• Earnings may be affected as the base fee portion is no longer received.
• Can only receive block rewards and tips paid by users.

User:

• No longer need to worry about estimating gas prices.
• You can set the maximum amount you are willing to pay to avoid excessive spending.
• The trading experience has significantly improved, especially for users who frequently interact with smart contracts.

Investor:

• The deflationary effect of Ether may be enhanced as some fees are burned.
• May have a positive impact on the price of Ether

Implementation Prospects

Although EIP-1559 has significant advantages in improving the usability of the Ethereum network, its implementation still faces challenges:

• The mining community may strongly oppose this as it undermines their profits.
• The specific implementation time has not yet been determined and may be introduced in a future hard fork.

Overall, EIP-1559 is a proposal with far-reaching implications that can both enhance network performance and potentially have a significant impact on the economic model of Ether. However, considering the resistance that may be encountered, there is still uncertainty about whether it can be successfully implemented.