Key Takeaways
- Vitalik Buterin wrote today that Ethereum’s fees would not be “truly acceptable” until they are below $0.05.
- He highlighted the development of proto-danksharding (EIP-4844) to help reach that target.
- Ethereum scaling solutions (e.g. Layer 2) are likely to be key for Ethereum’s competitiveness for years to come.
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Vitalik Buterin has said that fees on Ethereum will only be “truly acceptable” if they are lowered to under five cents. He did highlight the progress being made to that end, though.
Buterin Sets a Standard
Ethereum’s co-founder and one of the crypto space’s most beloved voices has set an ambitious target for fees on the Ethereum network.
Today, Ryan Sean Adams of the popular Bankless podcast shared a screenshot of the fees on various Ethereum scaling solutions and used these relatively low fees to claim that Ethereum was inexpensive. Vitalik Buterin responded somewhat dubiously:
“Needs to get under $0.05 to be truly acceptable imo. But we’re definitely making great progress, and even proto-danksharding may be enough to get us there for a while!”
The screenshot showcased fees (for the relatively inexpensive transaction type of sending ETH) ranging from two cents (for the optimistic Layer 2 rollup Metis Network) to $0.85 (for the optimistic rollup Arbitrum One). In the middle, Loopring came in at $0.12, ZKSync at $0.19, Polygon at $0.25, Boba Network at $0.48, and Optimism at $0.57.
In noting the progress on the road to sub-nickel transactions, Buterin mentioned how proto-danksharding could be sufficient for some time. As part of Ethereum Improvement Prosoal-4844, “blobs” of data, a new transaction type, would be introduced and accepted. The data blobs can be persisted on Ethereum’s Beacon-node for a short while, and require minimal disk space without being needed for Ethereum Virtual Machine execution. This improvement proposal could reduce rollup fees by factors of 10 or more, “and enable Ethereum to remain competitive without sacrificing decentralization.”
Ethereum’s recently-delayed merge to Proof-of-Stake will facilitate sharding, in which Ethereum’s chain can be broken up into concurrent threads, and this should help Ethereum scaling solutions expeditiously scale to new capabilities. However, that is likely to happen in the more distant future, so Ethereum will be reliant on scaling solutions (e.g. rollups) for at least the medium term. To further that end, Buterin proposed EIP-4488 last November. Like EIP-4844, it is meant to help Ethereum scaling solutions reduce fees even more than they already do.
The fee problem on Ethereum was front and center last weekend in to one of the most significant drops in NFT history—Yuga Labs’ $310 million Otherside metaverse NFT drop. Those trying to acquire an Otherdeeds non-fungible token spent over 60,000 ETH (worth around $165 million) on fees, though this was partly due to Yuga Labs’ subpar code.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.
