Community Poll Review - June 2024

How do you think you did on this quiz? Let's review the questions together below:

1️⃣

What is the purpose of gas fees?

Gas represents the computational resources needed to execute transactions on Ethereum. Thus, users must pay in proportion to the computational effort their transactions require.

This encourages users and developers to design efficient code execution, reducing the gas fees for each transaction. Simultaneously, it deters network spamming activities by imposing financial costs to every transaction.

2️⃣

How does the current gas fee mechanism work?

The fees for each transaction consists of:

Base fee
Priority fee

Base fee is a protocol-reserved price that ensures a transaction get to be included in a block. It adjusts based on the previous block size relative to the target 15M gas limit (flexible up to 30M). If the target of 15M gas limit is exceeded, base fee increases by 12.5% per block, making transacting on Ethereum to be expensive & reduce demand on the network. This is aiming to maintain an equilibrium state on the network at all times.

Priority fee is a tip for validators to prioritise transaction inclusion in a block. Higher tips can outbid competing transactions to be included into a block first.

3️⃣

How does EIP-4844 impact the gas price on Ethereum?

EIP-4844 introduces a separate blob fee market for rollups to commit data to Ethereum, and the increased demand in blob transactions will not cause a spike in gas fees for other transactions.

Before EIP-4844 is live on Ethereum, rollups commit alot of data to Ethereum & are constantly among the top 10 gas spenders on Ethereum. After EIP-4844, they are no longer the top gas spenders on Ethereum. This effectively decouples the data storage needs into its own fee market.

4️⃣

What impact could decoupling network resources into their own fee markets have?

By decoupling network resources into their own fee markets, just like how EIP-4844 separates the data storage needs into the blob fee market, transaction costs will match the specific network resource a user uses.