Will EIP-1559 be a Solution to Ethereum’ High Gas Fee Issue?
It is clear that the continuously congested blocks account for the all-time high gas prices.

According to the report by Coin Metrics, an analytics provider, after having delving into the world of Ethererum transaction fees, it is notable that they remain the highest-ever levels and even a highly anticipated upcoming network upgrade is unlikely to ease the condition. Currently, median fees on Ethereum have been consistently over $10 for most of 2021. Comparatively, the average Ethereum transaction fee reached just $5.70 at the height of the 2017/2018 bullish market.

It attributed some of this increase to the increment in ETH prices themselves which will make gas more extortionate. Since the beginning of 2021, ETH has surged 125% to current prices despite a correction of 19% from its all-time high of $2,050. However, over the same period, the median gas price has increased by 532%.

Organically, different types of transactions require different amounts of gas — a simple ERC-20 token transfer uses much less gas than a complex smart contract operation for an automated market maker for example. However, it noted that DeFi itself is cannot result in the high gas fees, it is simply more transactions in general.

Since January 2020, the amount of gas needed per transaction has went downwards. This explains that increased transaction complexity is not accountable for high transaction fees.

Ethereum transactions are currently auctioned, with those paying more gas taking miner priority and getting faster transactions than those that have set a lower gas limit.

The report noted that the current high fees are because the blocks are consistently full, around 95%, and have been since mid-2020 and the DeFi boom. For March 2021, Ethereum blocks have been 97%-98% full, data based on the research.

It is expounded that miners need to specify which transactions to include when mining new blocks and each block can only include a limited number of transactions (on average 160 to 200) due to the maximum block size. Thus, it is still too soon to conclude if the long-awaited EIP-1559 network upgrade, which has been designed to change the auction mechanism and burn some of the fees, can solve the problem of high gas costs, seems like only scaling solutions will be the true long-term fix. It is only can be said that the upgrade will only help make fees more predictable as the root of high fees is the scalability problem.
['Bibox Exchange']
['Ethereum Blockchain', 'Blockchain Technology']