The co-founder of Ethereum (ETH), Vitalik Buterin, has called for reform of the kryptonie fee system, warning that the increase in transaction fees could undermine network security.
The idea is based on a paper that suggests that the increasing dependence of miners on transaction fees may encourage selfish mining practices in an attempt to extract greater profits, risking disrupting the way transactions are processed.
The last Ethereum 2.0 test network will be launched on August 4
Buterin’s comments occur when users report that the Ether’s transaction fee is 100 gwei. Mythos Capital founder Ryan Adams tweeted today that the Ethereum network must „find a way to get more value in every block.
Buterin advocates the application of the Ethereum Improvement Proposal (EIP) 1599 to reform the Ethereum fee. The idea is to burn the basic fees to reduce the miners‘ dependence on transaction fees. However, some in the community have not yet become enthusiastic about the proposal.
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Buterin’s post cites the 2016 paper On the Instability of Bitcoin Without the Block Reward, written by four Princeton University researchers, which outlines the risks associated with increasing transaction fees.
The paper was intended to warn of several threats to Bitcoin’s performance and security (BTC) that may arise as miners become increasingly dependent on transaction fees, as block rewards decline over time.
The researchers say that a high variation in transaction fees could incentivize „selfish“ mining practices as block rewards decline, predicting that miners may try to break out of „rich“ blocks to steal the rewards they contain.
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The Ethereum community is cautious
The EIP-1599 proposal would increase total network capacity to 16 million gas from the current 12.5 million, with base rates increasing or decreasing depending on whether capacity is above or below the 10 million gas target. The miners would only keep the tips paid to prioritize transactions, while the base rate would be burned.
The Ethereum community is far from finding a consensus in support of EIP-1559; Ethereum Name Service founder Nick Jonshon tweeted, „I know I’m a broken record in this regard, but aren’t you concerned about the lack of a formal analysis showing that 1559 is behaving as intended?
Concerns have also been expressed about the possibility of the miners manipulating the basic rates. Developer Fernando Nieto also criticized the 2016 document cited by Buterin, arguing that its underlying assumptions are wrong.