Ethereum developer Anders Elowsson has proposed a unified multidimensional fee market for the Ethereum network. This builds on a previous proposal by the network co-founder Vitalik Buterin for the network to have a multidimensional fee market. According to the proposal, Ethereum can achieve capital efficiency by unifying all fee mechanisms on the network. This will be achieved by allowing each transaction to specify the maximum amount it can pay for inclusion, and the fee is applicable across all dimensions. The proposal abstract reads: “Each transaction specifies the maximum amount of ETH it is willing to pay for inclusion using a single max_fee. Upon inclusion, the protocol ensures that the transaction is able to pay the gas for all dimensions, treating the max_fee as fungible across resources.” Interestingly, Buterin had proposed the multi-dimensional fee market as early as 2022, even before the network had completed the Merge that transitioned it from Proof of Work to Proof of Stake. At the time, Buterin’s proposal, under EIP-1559, noted the different fee demands for Ethereum transactions and the current mechanism does not fully account for them, leading to suboptimal gas costs. He said: “The scheme we have today, where all resources are combined together into a single multidimensional resource (‘gas’), does a poor job at handling these differences.” Buterin proposed addressing this by using multidimensional pricing based on two options. The first option would calculate gas fees for resources by dividing the base fee for each unit of resources by the total base fee. In contrast, the second option sets a base for using the resources but adds burst limits for each resource, along with priority fees. New Ethereum proposal called for fee unification Meanwhile, the contributions from Elowsson acknowledged the benefits of multidimensional fees, noting that they will enable efficient consumption of resources within the stipulated parameters. However, it states that implementing such a system using the current fee market design could affect user experience and economic efficiency because users have to set a maximum fee for each resource. Allocating a lower fee to one resource or the other could affect transaction completion. In order to address this, the EIP will allow users to set a single unified maximum fee, and allocation from the pool will be based on cost demands, ensuring capital efficiency. It said: “This EIP leverages the natural fungibility of the user’s fee budget by letting users set a single unified max_fee. Instead of partitioning funds into non-fungible buckets, a single pool of ETH can then be allocated dynamically to cover costs wherever they arise.” The proposal further noted that it will unify the two separate mechanisms for the Ethereum fee market, EIP-1559 for regular gas and EIP-4844 for blob gas, under the EIP-4844 design. It stated that this resolves the tech debt in the current Ethereum fee market. ETH rebounds as network develops Meanwhile, the new proposal highlights the continuous development of the Ethereum network, even after ten years of existence. The smart contract network continues to grow, further establishing its dominance as the global internet layer. According to Defillama data, Ethereum has a DeFi total value locked (TVL) of $81.559 billion and a bridged TVL of $480 billion. This is far above any other network, including Solana’s DeFi TVL of $9.74 billion and $50.057 billion bridged TVL. Interestingly, the proposal comes as ETH value sees a rebound, with the token gaining more than 4% in the past 24 hours to inch closer to $3,700. This represents a much-needed resurgence after the token fell almost 5% in the past week. However, the decline in value has not been without its impact, with Ether exchange-traded funds (ETFs) seeing $465 million in outflows on Monday, the biggest ever. Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.
