Vitalik Buterin Proposes Potential Solution Using Ethereum "Multidimensional" Pricing

The Ethereum network is currently preparing for a "merger". (photo credit: pixabay)

JAKARTA – Ethereum co-founder Vitalik Buterin has re-implemented his thinking in a bid to improve the current fee structure for the network.

The proposal titled “Multidimensional EIP-1559” was laid out in a blog post on January 5 where Buterin noted that different resources in the Ethereum Virtual Machine (EVM) have different demands when it comes to gas usage.

He adds that there are distinct limits to short-term "explosive" capacity as opposed to "sustainable" capacity in EVMs citing examples of block data storage, witness data storage, and block state size changes.

“The scheme we have today, where all the resources are combined together into one multidimensional ('gas') resource, does a poor job of dealing with these differences.”

Multidimensional EIP 1559:https://t.co/bGFzXIbpZN

— vitalik.eth (@VitalikButerin) January 5, 2022

The problem is that funneling all the disparate resources into a single source leads to “very suboptimal gas costs” when these limits are not aligned, he added, as quoted by Cointelegraph.

Buterin outlines his proposed changes which are quite complex with a lot of technical math, but in short, the proposal offers two potential solutions using "multidimensional" pricing.

The first option will calculate gas costs for resources such as call data and storage by dividing the base cost for each unit of the resource by the total base cost. The base fee is the fixed network cost per block included in the EIP-1559 algorithm.

The second, more complex option establishes a basic cost for using resources but includes a burst limit on each resource. There will also be a “priority fee” set as a percentage and calculated by multiplying the percentage by the base fee.

He stated that the drawback of a multidimensional fee structure is that “the block builder will not be able to simply accept transactions in the order of high to low cost per gas.” They have to balance dimensions and solve additional math problems.

It remains to be seen if the proposal will be passed as the current priority is the next big upgrade. The Ethereum network is currently preparing for a “merger” that will link the Ethereum blockchain with the Beacon Chain and effectively end Proof-of-Work. Testing is already underway on the Kintsugi testnet and full deployment is expected in the first quarter of this year.

EIP-1559 was deployed last August as part of a London upgrade to burn some of the transaction costs to make gas prices more predictable. Since going live, 1.36 million ETH worth about US$4.7 billion at current prices, has been destroyed according to the burn tracker.