Ethereum with commissions less than USD 0.05: Vitalik Buterin insists on an idea from 2017

Vitalik buterin gives his opinion on the ideal cost of commissions in ethereum

The co-founder of Ethereum, Vitalik Buterin, spoke about rollups, second layer solutions that reduce the commissions paid for operating on the network. Regarding the commissions when using these instruments, he opined that “they need to reach USD 0.05 to be really acceptable”, although he remarked that “great progress is being made”.

The Russian-Canadian developer expressed his point of view with a reply to a post on Twitter in which the analyst Ryan Sean Adams talked about rollups, second layer solutions in Ethereum that allow operating with much lower commissions in that network.

In the image that accompanies the original publication, you can see how different rollups offer the alternative of paying fees of less than a dollar per transaction, less than half of what it would cost on the main network. All this in a context of high fees due to the congestion experienced by Ethereum in previous days.

In 2017, Buterin had expressed in a interview an opinion very similar to the current one. “The internet of money shouldn’t cost $0.05 per transaction,” he said back then, when the idea was to achieve scalability on the Ethereum mainnet.

On the other hand, in his reply on Twitter, Vitalik Buterin also assured that “even the proto-danksharding it may be enough to get to that for a while.” This method was included in the Ethereum improvement proposal (EIP) 4844, whose author is Buterin himself, and is an update of the current «danksharding«.

Vitalik buterin gives his opinion on the ideal cost of commissions in ethereum
For Vitalik Buterin, commissions on Ethereum can be further optimized. Source: @VitalikButerin/ Twitter

With this mechanism, the developer is referring to a division of the blockchain into 64 shards in which rollups would have their own dedicated space. Thus, these would increase their efficiency with the transition to Ethereum 2.0.

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The debate over the fees of the Ethereum network has been revived since Sunday, May 1, day in which the sale of lands of the metaverse of Bored Ape Yatch Club congested the network and multiplied the commissions to miners. As CriptoNoticias reported, transactions averaged $399 at one point due to the extremely high demand for non-fungible tokens (NFTs) developed by Yuga Labs.

What are rollups and why does Vitalik Buterin defend them?

In the early years of Ethereum’s life, it was thought that scalability would be achieved using its mainnet. However, Buterin, one of its co-founders, has been fighting for the development of scalability solutions in second layers for a long time, as this newspaper reported in 2020. Rollups are the main instrument that emerges in this area.

Rollups process or “wrap” a set of transactions on their own network. Once they have executed them, they transfer them in the form of compressed data packets to the Ethereum mainnet, so they can move thousands of transactions in one go and at minimal cost. They also do so without ever losing the security that Ethereum offers.

comparative table of commissions for transactions in ethereum according to roolups used
Rollups allow trading on Ethereum with much smaller transactions. Source: l2fees.info

At the close of this note, the average fees for sending ether (ETH) are USD 2.52, according to data from l2fees.info. Nevertheless, By using rollups you can reduce these costs to even less than $0.10. The same happens for the exchange of tokens in the network, whose commissions decrease considerably when using second layer solutions, as can be confirmed in the image above.

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