Proposed Ethereum Upgrade Could Allow Layer 2 Developers To Share Fee Revenue
EIP-6968 Would Introduce ‘Contract Secured Revenue,’ Allowing DApps To Earn A Share Of Transaction Fees Generated By Their Users
By: Samuel Haig •DeFi News
Ethereum developers are proposing an upgrade that would let popular dApps earn a share of the transaction fees they generate on Layer 2.
EIP-6968 proposes a new type of token providing “contract secured revenue” (CSR), allowing developers to claim a percentage of the transaction fees generated by users interacting with their smart contracts.
“With CSR, now projects can band together, create an L2 around their shared memes/values, [and] share sequencer fee revenue based on who drives the most usage,” tweeted Kevin Owocki, one of the proposal’s co-authors. “If adopted, this would allow smart contract developers who deploy on L2s to access a potentially lucrative revenue stream.”’
New revenues generated could fund dApp development, public goods, or enable incentives for developers to join a network.
While Owocki first outlined EIP-6968 in May, the proposal has gained renewed traction following a presentation by Owocki at the recent EthCC conference in Paris.
Funding Development With Transaction Fees
EIP-6968 seeks to shake up the highly competitive Ethereum scaling sector, with CSR providing a new type of incentive for developers.
While Layer 2 rollups are presently the leading scaling solution, top L2 teams including Arbitrum, Polygon, and zkSync are already investing resources into building infrastructure for Layer 3 networks.
L3s typically comprise “app-chains” that host a single dedicated decentralized application. Owocki described EIP-6968 as enabling “ecosystem-chains,” described as a step forward from app-chains.
The proposed upgrade is a modified version of EIP-1559, which went live in August 2021 and introduced Ethereum’s burn mechanism. The authors note that EIP-6968 could be used by any network using EIP-1559.
“Using protocol rewards of an L1 to fund smart contract development would be a big change to the way the current market works,” the proposal reads.
“I’m excited to see what kind of traction this creates within the L2 ecosystem, and envision a virtuous flywheel where we see smart contract developers receive revenue for the value they bring to L2s,” Owocki wrote on the Ethereum Magicians forum.