Ethereum’s spectacular performance throughout the past several months has been haunted by its underlying network’s transaction fees which are precisely at their highest levels ever. Ethereum gas price woes have caused severe pain to the users of the network. Among the numerous improvement proposals that were discussed, the one that stood out was the controversial EIP 1559.
The advocates of this proposal often tout EIP 1559 as a potential solution to bring down the transaction fee caused by the DeFi upsurge, NFT, and stablecoin explosion. But CoinMetrics, in a latest verdict, stated that it might not fix the current high gas prices and make the transaction fees significantly less expensive.
According to the recent Ethereum Gas Report by the platform, high transaction fees are fundamentally a scalability problem. Hence, since the ETH network can only carry out a few hundred transactions per block, the problem of high fees will continue to linger as long as the usage of decentralized applications [DApp] keeps rising. Gas prices will continue to be high as long as there’s high competition for block space.
Having said that, the report also went on to acknowledge that Ethereum scalability solutions are on the way, which could potentially be the “true long-term solution” towards decreasing transaction fees.
“Although it likely won’t fix the high fee problem, EIP-1559 will help improve Ethereum’s user experience by making fees more predictable. EIP-1559 should help reduce variance in gas fees and give users a clearer picture of the actual fee they’ll need to pay.”
So What Will Lessen The Ethereum Gas Crisis?
According to CoinMetrics, several layer 2 solutions and Ethereum 2.0, could solve the problem in the long-run.
Through different ways, the ETH network’s scalability solutions could increase the number of transactions that can be processed per block. This, in turn, will facilitate in alleviate the congestion that has resulted in high fees. The report further mentioned,
“There’s a lot of progress being made towards L2 solutions, including Optimism, Loopring, and Immutable X, just to name a few. Thanks to the debate around EIP-1559, Ethereum 2.0 may even come sooner than previously planned. But most solutions have a lot of complexities, and it will take time to incorporate scalability solutions across the network.”