Ethereum insiders claim that the original ETH fees were targeting the $0.01-$0.02 range.

Ethereum stands out as a pioneering network known for its smart contract capabilities. However, recent developments have sparked debate over the fee structure. Steven Nerayoff, an early Ethereum Foundation advisor, raised concerns about increased transaction costs, a significant change from the network’s initial vision.

Ethereum’s fee structure under investigation

Nerayoff’s critique highlights the stark contrast between current reality and the initial intent of the Ethereum fee system. According to the Ethereum ICO legal advisory document, transaction fees, also known as gas fees, are intended to be minimal, ideally between $0.01 and $0.02, with a cap of $0.5 for complex transactions. This pricing was aimed at maintaining Ethereum’s accessibility and usability.

However, the network has seen gas bills skyrocket, especially during periods of high demand. These fees sometimes soared into the hundreds of dollars, depending on the type of transaction. Nerayoff attributes this change to an agenda driven by early investors and suggests that it disproportionately benefits a few major companies. He argues that these companies not only benefit from rising ETH prices, but also hold significant amounts of the cryptocurrency, allowing them to profit from mining and, more recently, staking activities.

Adding to the argument, Nerayoff points out inconsistencies in the fee structure when comparing ETH to modern blockchain networks such as Solana, XRP, and Cardano. These platforms have significantly lowered transaction costs, raising questions about ETH’s scalability and efficiency.

Ethereum’s scalability issues and layer 2 solutions

In response to these challenges, the Ethereum Foundation has been working to improve the transaction throughput of the base layer. However, the underlying strategy was to offload transaction processing to the Layer 2 (L2) network. L2 solutions such as Optimism, Arbitrum, Base, and zkSync Era aim to alleviate the load on the ETH main network, potentially reducing fees and improving transaction speeds.

Despite these efforts, ETH’s high gas fees remain an ongoing problem as the effects of fee reductions have not been fully realized. This situation has allowed new blockchain networks like Solana to establish themselves as more efficient alternatives, potentially threatening ETH’s market dominance.

The way forward for EDay

Ethereum’s journey is critical as it faces the dual challenge of maintaining its pioneering position in the blockchain space while adapting to evolving scalability and efficiency needs. A network’s ability to effectively implement scaling solutions and manage transaction costs is critical to determining its future relevance and competitiveness.

As the blockchain industry grows, investors, developers, and users will closely watch ETH’s decisions and developments to address these issues. The results of these efforts will not only shape the trajectory of Ethereum, but also impact the broader landscape of blockchain technology and digital assets.

Source: https://www.cryptopolitan.com/ethereum-insider-original-fees-0-01-0-02/