The Ethereum Crisis Is Heading! EIP-1559 Is Not The Solution - Kakiforex.com - Financial Market Media No. 1 in the World The Ethereum Crisis Is Heading! EIP-1559 Is Not The Solution The Ethereum Crisis Is Heading! EIP-1559 Is Not The Solution
InstaForex

March 25, 2021

The Ethereum Crisis Is Heading! EIP-1559 Is Not The Solution

 The Coin Metrics report revealed transaction costs (gas) on the Ethereum (ETH) network will on average be worth over $ 10 in 2021, as opposed to 2017 and 2018 where it was worth just $ 5.70.


The surge in gas prices was partly driven by high ETH prices.


For the record, since the start of 2021, ETH has jumped 125% to its price at the time of writing, $ 1,702 despite a 19% correction after hitting an all -time high (ATH), $ 2,207 on Feb. 20. In line with that, gas prices also jumped by 532%.


Currently, Ethereum transactions are being auctioned off, meaning consumers who pay gas prices at high values ​​are the priority of miners over those who pay at low prices.



The full block quantity also caused the price of gas to rise. For example, since mid -2020 and the beginning of the DeFi era, blocks have reached 95%capacity. While for March 2021, the fullness for each block reached a rate of 97%-98%.


Block fullness rate or block fullness refers to each of the generated blocks having a limited number of transactions due to block size. The fuller a block is, the higher the cost.


Following that, Coin Metrics formulated EIP-1559 or known as Ethereum Improvement Proposal 1559 which is designed with the aim of changing the auction mechanism and burning some costs, will not solve the problem of high gas costs.


Only a scale solution is the answer to the issue for the long term.


According to Coin Metrics again: “If Ethereum is only able to process a few hundred transactions per block, gas prices will continue to rise as long as DApp usage increases. Gas prices will increase as long as there is high competition for block space. ”