The Ethereum community has introduced a proposal to modify its app-layer fee structure, led by Kevin Owocki and Devansh Mehta. The initiative seeks to address the diverse needs of small- and large-scale developers.
Owocki, founder of Gitcoin, and Mehta, an active community contributor, introduced a square-root based fee structure. This method aims to provide equitable support across different funding pools, affecting the Ethereum ecosystem significantly.
Fee Changes: 1% on $10M+ to Boost Small Developers
The proposed fee structure change may attract smaller developers by reducing costs. It proposes a 7% fee on $170,000 pools but only 1% on those over $10 million.
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The proposal outlines a square-root based fee structure designed to benefit smaller funding pools and cap fees for larger ones, aiming to support both small-scale builders and larger application developers. — Kevin Owocki, Founder, Gitcoin
Impact of Past and Evolving Economic Models
EIP-1559 from 2021 offers a precedent, introducing transaction fee burning. Proto-Danksharding has recently reduced fees, aligning with Layer 2 solutions to shift economic incentives.
Insights from Kanalcoin suggest adjustments to Ethereum fees could result in notable market shifts. Historical trends indicate potential volatility in ETH and shuffling within DeFi and Layer 2 protocols based on fee changes.
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