EIP-1559 is not to reduce transaction fees, understand its design goals

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EIP-1559 is to achieve better user experience and network security.

Original title: “View | Who said EIP-1559 is to reduce transaction fees? 》
Written by: InfStones

Three companies that have been frequently seen recently:

“Can 1559 lower the gas fee?”

“Oh can’t be lowered”

“Then 1559 is useless.”

Recently, the developers of Ethereum stated that it is possible to implement a hard fork upgrade and implement EIP-1559 in July, and the discussion about 1559 suddenly increased. I found that when reporting this news, many media outlets explained EIP-1559 as follows:

EIP-1559 attempts to reduce transaction fees by introducing fixed fees and a destruction mechanism.

The first two points are indeed the second important feature of 1559, but the latter purpose is a bit inexplicable. It is hard not to make people wonder about this logical connection:

What? So amazing? Can the introduction of fixed fees and destruction mechanisms reduce transaction fees?

Especially on this problem that everyone feels uncomfortable with. If this problem can be solved, everyone’s attention will undoubtedly rise.

So now the prevailing opinion orientation has become:

I heard that 1559 can solve the current gas fee of 1000gwei

What can’t be solved

1559 It’s useless

EIP-1559 is innocent.

Wrong public opinion

For a long time, the Chinese community’s debate on EIP-1559 has focused on whether it can reduce the gas fee. This is very confusing. In fact, the Chinese community is not without a detailed English translation of EIP-1559, such as ECN. This and this .

However, as of the time of publication, the reading volume of the above two articles is about 200, far less than the other widely circulated EIP-1559 analysis article ” EIP-1559 is just a futile effort, no benefit “. In this article, the author clearly opposed EIP-1559 and provided a series of analytical proofs. I respect the author’s intellectual resources very much, but I have to say that the critical point of this article is problematic.

Sweeping the introductory part of the first paragraph, the author of the second paragraph expressed his criticism:

“Assuming that the market price of an item is high, do you think that depriving the producer (seller) of the economic income from this item can make the cost of obtaining this item lower?”

“But EIP-1559 just wants you to believe that cutting the income miners get from gas fees can bring down the gas price. How is that possible?”

In the second paragraph that follows, around this topic, the author uses a lot of space to cite an example of a hospital visit and analyze the problem through economics.

But there is no need at all. If EIP-1559 is really as stated in the above quotation, it is really an idiot proposal, and its huge problem can be seen without any analysis.

But the problem is that EIP-1559 is not for reducing gas fees.

Design Purpose of EIP-1559

Here is a very good collection of EIP-1559 resources.

Of course, the resources in this link are all in English, which is really unfriendly to friends in the Chinese community. Here I only quote the description of the four design goals of EIP-1559 in the first article Analysis of EIP-1559. If you are interested and able to read other articles, you will find that their descriptions of the design goals of 1559 are consistent. .

  • Better user experience. This is because in most cases, users only need to pay a fixed fee without clarifying the gas price, gas limit, and predicting gas changes, which leads to the problem of a very, very long time pending due to gas estimation errors. In this case, most transactions can be confirmed within 1 to 2 blocks.

  • Block relaxation mechanism. The block size is allowed to vary flexibly according to the amount of demand, allowing some blocks to become larger and some blocks to become smaller.

  • Better network security. The total amount of Bitcoin is constant, so in the final state, it can only rely on fees to retain miners and ensure network security. Ethereum uses EIP-1559 under the balance of inflation and miner incentives. It can continue to motivate miners through additional issuance of rewards, and at the same time 1559 burns Base fee curbs inflation.

  • The transaction fee must be paid in ETH. The original text here is Prevent economic abstraction, but in order to facilitate understanding, there is no need for such abstract words. The vernacular is that miners used to charge other fees to package blocks (there are many facts), but now they must burn ETH as a base fee. Strengthen the fee attribute of ETH.

The English promotion articles of EIP-1559 are almost all expounding the above-mentioned four design goals. I’m sorry, none of them mentioned that EIP-1559 is to reduce gas consumption or reduce gas price.

But is EIP-1559 so futile and “useless”?

I believe you will not make such a judgment after reading the four-point goal of EIP-1559.

Just take the user experience (UX) problem description. To clarify concepts such as gas fee, gas price, gas limit, etc., when you find that the gas calculated by the wallet is higher or lower than the actual need, you need to manually modify the gas price, and you have to test up and down anxiously according to the predicted value of the gas price. If you give less to pending (there will be the problem of acceleration), if you give too much, I feel aggrieved… Can such Ethereum move towards large-scale applications?

Respond to some popular opinions

A. “Users don’t need to waste a lot of money on excessive gas fees”

This is a sentence from the EIP-1559 introduction article cited by opponents that I often see, and extending it to EIP-1559 can reduce the high gas fee. I have to sigh the charm of language. Please understand exactly what is “excessive” . “Excessive” refers to higher than the supply and demand point. It refers to the extra money paid because of the inaccurate gas price forecast, not It is said that Gas Fitch is extremely high when the network is congested. Although the Gas was high at that time, it was in line with the relationship between supply and demand. Don’t misunderstand the design purpose of EIP-1559.

B. So EIP-1559 will not reduce the gas fee?

wrong! In many cases, EIP-1559 will actually reduce the actual gas fee paid by users. Through the block relaxation mechanism and fixed payment without guesswork, the above-mentioned “excessive” gas fee can be reduced. But please understand it correctly, don’t extend it to use EIP-1559 Gas fee will not reach tens of dollars / Gas Price will not reach 200gwei.

C. When the network is congested, after applying EIP-1559, a large number of transactions still need to wait?

Of course, this problem is the performance of the Ethereum network. EIP-1559 cannot improve the performance of Ethereum. It is not doing this. Please pay attention to all the statements of the EIP-1559 recommended article: ” Generally, transactions can be included faster.” In most cases where there is no congestion (and also include 100% of the spare capacity in the slack mechanism), compared with the unreliable Gas Price prediction, directly paying the Base Fee can guarantee the inclusion of transactions.

D. The cost of miners has decreased, and the departure of miners will reduce the security of the Ethereum network

Because of the rising price of Ethereum and the recent crazy fee income, a large amount of computing power has been attracted to Ethereum in the short term. But it must be noted that EIP-1559 was not released yesterday, and the discussion on it has lasted for at least two years. Knowing that this is a major trend that will reduce the income of miners, I still call on miners to invest in it. Reform will always be painful, and new miners will come.

Disclaimer: As a blockchain information platform, the articles published on this site only represent the author’s personal views and have nothing to do with ChainNews’ position. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.

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