EIP-1559 Is Ready. Or is it?
Ethereum Improvement Proposal 1559, a long awaited update to Ethereum’s core codebase, was rumored to be ready for deployment yesterday in a leaked Discord conversation on Twitter. The proposal aims to change Ethereum’s transaction fee mechanism to improve user experience and reduce ether inflation. Most Significant As EIP-1559 is viewed by the broader Ethereum community…
By: Owen Fernau •DeFi News
Ethereum Improvement Proposal 1559, a long awaited update to Ethereum’s core codebase, was rumored to be ready for deployment yesterday in a leaked Discord conversation on Twitter.
The proposal aims to change Ethereum’s transaction fee mechanism to improve user experience and reduce ether inflation.
As EIP-1559 is viewed by the broader Ethereum community as one of the most significant improvement proposals ever to be implemented, rumors that it is ready to be deployed made waves. The tweet garnered hundreds of likes and retweets.
In the Discord screenshots, Ethereum creator Vitaik Buterin asks developer Micah Zoltu to confirm whether he meant to say in a previous message that EIP 1559 is ready and should be deployed, to which Zoltu responded, “Yeah, essentially.”
Clients Not Ready
Readiness, however, is not black and white as Tim Beiko, Ethereum core developer responded on Twitter, saying “I disagree 1559 is ready to ship now.”
The developer followed up by posting an EIP-1559 Mainnet Readiness Checklist, which shows, as Beiko said on Twitter, no Ethereum clients as having a final version of the proposal implemented.
Currently, Ethereum users pay a fee for every transaction they sign on the network. The fee pricing follows a first-bid auction whereby miners pick transactions from users who are willing to pay the highest fee.
EIP-1559 proposes to introduce a “base fee”, which, like the current mechanism, will protect against spam on the Ethereum network. Crucially though, the fee would be burned instead of sent to miners. This would “at least modestly decrease the rate of ETH inflation,” according to computer scientist Tim Roughgard’s evaluation of the proposal.
Lower Inflation Rate
EIP-1559 has been lauded by Ethereum enthusiasts. If the proposal makes the currency more deflationary, with constant demand, it should become more valuable.
The base fee would change a predictable amount block-to-block, allowing the user experience of choosing a gas price to be abstracted away by Ethereum wallet providers’ interfaces.
If the proposal is implemented, users will still be able to add a “tip” to their transactions to speed up their inclusion in the blockchain – similarly to how Ethereum currently functions. EIP-1559 also features a varying blocksize: if blocks are too full, the base fee will increase a set amount, if blocks’ gas falls below a chosen threshold, the base fee will decrease.
Conversely, EIP-1559 may cut into miner revenue, as they are currently receiving all transaction fees as payment for keeping the network secure. Twitter user matterhorn_eth, who originally posted the Discord screenshot, worried that “as soon as any meaningful conversation happens (around 1559’s implementation), it’s hijacked by anon miners.”
There are also communication issues with EIP-1559’s release. Any pieces of software that signs transactions will need to make upgrades if the proposal ships.
Still, investor David Lach expressed many people’s enthusiasm saying he “had no idea that EIP-1559 is already done and ready to be merged. Let’s put some pressure to get it in production”