Source: AdobeStock / burdun
It has long been known that the “London” upgrade of Ethereum (ETH), which brought the highly anticipated EIP-1559, would help improve the estimation of transaction fees on the network. But according to research by Crypto exchange Coinbase, the upgrade has also brought more direct benefits to users, as the exchange has so far saved about ETH 27 – or USD 92,000 – in gas fees every day.
After the implementation of the new Ethereum Improvement Proposal (EIP) on 5. On August 18 this year, Coinbase developed its own “novel gas price algorithm” for on-chain transactions, said a new blog post by Yuga Cohler, a software engineer at the exchange.
According to him, it was this algorithm that allowed the exchange to calculate a suitable level for *max_priority_fee_per_gas * – one of the two transaction fee values that users can specify with EIP-1559.
And when the change was introduced by the exchange, results quickly appeared:
“On average, we saved about 9% on effective gas prices,” Cohler wrote, adding that “we improved our time from transfer to confirmation by 11 seconds.”
Compared to the situation before implementing EIP-1559, Coinbase said that their transaction fee savings are about 27 ETH per day and worth around USD 92,000 at current prices.
Furthermore, the Coinbase software developer noted that the savings are likely to be permanent due to the way the exchange conducts the transactions:
“We suspect that we can simultaneously save the gas price and improve the confirmation time by specifying a max_fee_per_gas that is significantly larger than the current base_fee_per_gas,” the Coinbase engineer continued, adding:
“This priority_fee_per_gas greater than the corresponding, incentives for miners, to include our EIP-1559 transaction in the next block,” Cohler wrote.
Until September 27 this year, transactions of ETH and other Ethereum-based tokens from Coinbase and its users were responsible for burning a total of ETH 13,800, giving an average daily burn of 254 ETH per day, a blog post said.
To take advantage of the big savings potential, Coinbase said it has introduced EIP-1559 on 95% of transactions, while still withholding some transactions on the legacy system to collect more data for comparison purposes.
Among other things, EIP-1559 introduced a mechanism that pays most of the transaction fee – the so-called base fee – from the users, while a smaller part – the inclusion fee – is paid to the miners, making the supply of ETH more deflationary.
The upgrade has been very welcomed by ETH holders, and the price of ETH has so far increased by 25% since the implementation of the firing mechanism. According to , a total of ETH 451,561 (USD 1,6 billion) have been burned under the mechanism so far.
Altair Mainnet Upgrade to Ethereum
Meanwhile, the Ethereum Foundation announced Tuesday that it is taking another step toward the upcoming “merge,” the nickname for the network’s transition from Proof-of-work to Proof-of-stake.
According to the announcement, the Altair Beacon Chain upgrade is scheduled to be activated on the Ethereum main network in the morning (UTC time) of October 27, and validators on the main network are “strongly advised” to be online during the upgrade.
The Altair Beacon Chain upgrade represents a “low stakes warm-up” for Beacon Chain developers and client teams prior to the merge, but will not affect normal end users of the network, the announcement said.