Developers are continuing to work on a crucial upgrade for the Ethereum network that should help alleviate the sky-high transaction prices that are currently plaguing it.
In the latest update from developer Tim Beiko, he reports that there have been more bug fixes in the large state testnet for EIP 1559. The testnet aims to re-create conditions similar to the Ethereum mainnet to test whether nodes can handle blocks that are ‘200% full.’
There have been more preparations for the next major network upgrade, dubbed Berlin, which will usher in a number of other EIPs including one which defines a new transaction type.
What is the EIP 1559 Fuss About?
Ethereum network fees are currently calculated in an auction-type mechanism that works by having everyone submit bids for how much they’re willing to pay to have their transaction picked up by a miner.
The miners will naturally prioritize the highest bids which lead to network congestion and very long waits for everyone else paying less in gas.
EIP 1559 is a proposal to modify this system so that everyone pays just the lowest bid that was included in the block. The fees would be dynamically adjusted depending on network load and demand which would allow wallets and protocols to automatically set lower and more accurate gas fees.
Ethereum co-founder, Vitalik Buterin, has shared his thoughts on variable block sizes that may occur once the proposal is implemented. In his own words;
“EIP 1559 does NOT cause much higher risk to clients than a fixed gas limit,”
There has also been some pushback from miners, who are the ones benefitting from sky-high gas prices.
Don’t hold your breath for cheaper Ethereum transactions, however, as the estimated timeframe for the deployment of this long-overdue upgrade is toward the end of 2021.
Ethereum Gas Crisis Worsening
As Ethereum transactions on the network surge, gas prices are again at painful levels for the majority of users.
ETH prices slightly topped their previous all-time high during late trading hours on Jan. 19, as ETH moved above $1,400 for the first time in three years. Gas prices have also taken an upturn as trading and activity on the network intensifies.
According to BitInfoCharts, the average transaction cost is now $8.50. This is about half of its record average high of $16.50 on Jan. 11, 2021. If this rally is only just beginning, then gas fees are going to get a whole lot worse which is why EIP 1559 cannot come soon enough.