10 Key Takeaways of Ethereum EIP1559 and why ETH has so much more potential
- No transaction fee mechanism, EIP-1559 or otherwise, is likely to substantially decrease average transaction fees; persistently high transaction fees is a scalability problem, not a mechanism design problem.
- EIP-1559 should decrease the variance in transaction fees and the delays experienced by some users through the flexibility of variable-size blocks.
- EIP-1559 should improve the user experience through easy fee estimation, in the form of an “obvious optimal bid,” outside of periods of rapidly increasing demand.
- The short-term incentives for miners to carry out the protocol as intended are as strong under EIP-1559 as with first-price auctions.
- The game-theoretic impediments to double-spend attacks, censorship attacks, denial-of-service attacks, and long-term revenue-maximizing strategies such as base fee manipulation appear as strong under EIP-1559 as with first-price auctions.
- EIP-1559 should at least modestly decrease the rate of ETH inflation through the burning of transaction fees.
- The seemingly orthogonal goals of easy fee estimation and fee burning are inextricably linked through the threat of off-chain agreements.
- Alternative designs include paying base fee revenues forward to miners of future blocks rather than burning them; and replacing variable user-specified tips by a fixed hard-coded tip.
- EIP-1559’s base fee update rule is somewhat arbitrary and should be adjusted over time.
- Variable-size blocks enable a new (but expensive) attack vector: overwhelm the network with a sequence of maximum-size blocks.
submitted by /u/TechHodler
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