According to reports, EIP 1559 may not lower Ethereum’s fee per transaction, which has already risen from what it was in 2017/18.
The most conversed topic in the community was the high-cost fees of transactions for Ethereum. According to CoinMetrics, the cost presently is close to twice what it was in the 2017/18 era. Regardless, the news outlet cautioned the community as there might be no solution in sight looking at EIP 1559 release.
Ethereum network is the most widespread blockchain network used in the crypto space. But, one issue that has been haunting it for a while is scalability. Being the technology behind the most recent trends like Decentralized Finance (DeFi), Non-fungible tokens (NFTs), and operating several stablecoins has caused many slowdowns while transacting. The high contract fees could even touch the $30 mark in some cases. These are some problems that have caused Ethereum scalability issues.
CoinMetric took a deeper look at the costs of a transaction from the previous bull market in 2017/18 and found out that three years ago, the transaction fee of Ethereum was $5.70 even though they were heavily-employed throughout the ICO craze. The paper issued by CoinMetrics also mentions that the typical transaction cost is more than $10 for the majority of this year. Moreover, since the 18th of January 2021, the cost of transactions for Ethereum has risen nearly every day.
The paper does agree on the increase in the price of Ethereum is also a factor driving the cost of transaction fees but, CoinMetric still believes overcrowding of Network to remain the key source of the problem.
Not much hope from EIP 1559
To overcome many issues, the developers are presently working on a big fix deemed the Ethereum 2.0. However, that could still be years ahead before being released to the public. Therefore, the developers are also shifting towards PoW or Proof of Work updates.
The upcoming update is said to release this summer called London Fork, which will also have EIF 1559 to reduce some transaction fees. It will achieve that by deploying an algorithm that calculates transaction fees rather than relying on the users to specify. The max size of a block would set to 25M gas doubling from its previous of 12.5M. However, the target block size will remain the same.
Although, the above mention advancements should decrease the typical fees theoretically. However, the reality is far from it since the notable factor for pumping fees so high is the scalability issue, which is still unaddressed until Ethereum 2.0 releases. Perhaps the solution can come from the likes of Cartesi and Polygon.