EIP-1559 – cementing the financial worth of ETH




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4 COMMENTS

  1. This EIP includes a resolution to the theory of what is called within the community *”economic abstraction”* (i.e. the possibility of using another token to pay for gas, as opposed to ETH).

    Some people conclude that this undermines the value of the ETH-coin, and it’s foremost use-case. I’ve read other claiming that technically speaking, this would be a herculean task to undertake, and would be highly unpractical for a variety of reasons.

    – Vitalik Buterin has already responded to this theory, long ago:

    *“In Ethereum as it presently exists, this is absolutely true, and in fact, if Ethereum were not to change, all parts of the author’s argument (except the part about proof of stake, which would not even apply to Ethereum as it is today) would be correct.”*

    Source: [https://hacked.com/ethereum-death-through-economic-abstraction/](https://hacked.com/ethereum-death-through-economic-abstraction/)

    ​

    Secondly, EIP-1559 introduces *”a base network fee based on network demand, creating better fee price efficiency and reducing the complexity of client software”*.

    While the community has been preoccupied with governance-related topics, which are also important. I do believe it is time to give this topic the discussion it deserves. This is with regards to Ethereum 1.0.

    Kind regards,

  2. Makes excellent sense. The functioning of the blockchain is predicated on security, security is predicated on value, and value ultimately on scarcity. User fees based on demand allow for a hypothetical steady state of inflation if properly matched with issuance, and translate adoption into value for token holders.

  3. Since the MINFEE change in each block is only a maximum change, not a required change, what is the incentive for a miner to ever increase MINFEE?

    The MINFEE is burned, not given to the miner. Only the extra above the MINFEE goes to the miner. So if the miners lower MINFEE whenever they can and never increase it, demand for gas will more often exceed the 16M max limit, and miners will get more revenue as people raise their premiums to outbid each other.

    So it seems to me that the “default” formula should actually be enforced by the protocol.

    (I tried to ask this on the official discussion on Magicians but my account is new and my comment has been on hold for four days.)

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