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The world of decentralized finance (DeFi) and Web3 applications on the Ethereum network is constantly evolving. One of the persistent challenges has been finding the right balance between ensuring the network remains sustainable and secure through fees, while also making it affordable for users and profitable for the developers building innovative applications. High Ethereum gas fees have often been a barrier to entry and usage. Now, a new conversation is emerging about potentially rethinking the very core of how fees are handled on the network. A significant development in this ongoing discussion is a recent proposal put forth by Kevin Owocki, founder of Gitcoin, and Devansh Mehta. Reported by Cointelegraph on April 27, this EIP proposal aims to introduce a dynamic structure designed explicitly to address the tension between generating revenue for application builders and extracting fair fees from users. It’s a fascinating concept that could reshape the economic landscape for decentralized applications (dApps) and the broader Ethereum network. At its heart, the proposal suggests moving towards a fee model that is not just based on network congestion (like the current EIP-1559 model primarily is) but also takes into account the success or funding level of the project being used. The core mechanism mentioned is a dynamic structure that would use a square root formula. Think of it this way: instead of a flat percentage or a fee purely dictated by network demand, the fee percentage extracted from a transaction or interaction with a dApp would be inversely related to the project’s funding or revenue, albeit in a non-linear way determined by the square root. As a project’s funding increases, the percentage of the transaction value or related metric taken as a fee would gradually decrease. This sounds counter-intuitive initially, but the goal is to allow smaller, newer projects to keep a larger share of potential protocol revenue, while larger, more established projects contribute relatively more in absolute terms, even if the percentage is lower. The precise details of how “project funding” or revenue would be measured on-chain are crucial and would need robust mechanisms, potentially involving oracle networks or standardized reporting methods. The proposal is still in its early stages, but the core idea is to create a fee mechanism that is more aligned with the economic reality of the applications running on Ethereum, rather than just the underlying network’s operational costs and demand. The current Ethereum fee structure, significantly improved by EIP-1559 (which introduced base fees and burning), has made fees more predictable but hasn’t solved the issue of high costs during peak network usage. Furthermore, it doesn’t inherently provide a built-in mechanism for dApps to generate protocol-level revenue simply from being used. Developers often rely on tokenomics, transaction fees *within* the dApp’s logic (separate from gas fees), or other business models. This proposal stems from the recognition that a healthy ecosystem needs both a robust base layer (Ethereum) and thriving applications built on top. If dApps struggle to find sustainable revenue models, innovation can be stifled. If blockchain fees are prohibitively high, users are priced out. The proposal attempts to bridge this gap by creating a system where using a successful dApp directly contributes revenue back to the dApp creators, while also contributing to the network, all through a transparent, protocol-defined fee. Key issues the proposal aims to address include: One of the most compelling aspects of this EIP proposal is its direct focus on enabling and boosting dApp revenue. Unlike traditional gas fees which primarily compensate validators and contribute to ETH burning, this proposed structure envisions a portion of the fee being directed back to the dApp itself. This could be a game-changer for developers. Imagine a popular DeFi protocol or an NFT marketplace. Under the current system, they earn revenue through trading fees, listing fees, or other application-specific charges defined within their smart contracts. Gas fees are an external cost paid by the user to the network. With this new proposal, a percentage of the transaction value or activity could be automatically split, with one part going to the network (potentially for burning or validator tips) and another part going directly to the dApp’s treasury or a designated address. This creates a direct, protocol-supported revenue stream tied to usage. This could significantly impact the viability of open-source or public goods dApps that struggle with monetization. By baking revenue extraction into the protocol layer itself, it provides a more reliable and transparent funding mechanism, potentially reducing reliance on grants, donations, or complex tokenomics designed purely for revenue generation. How might this new structure affect the overall blockchain fees users pay? This is a critical question. The proposal aims for “fair fee extraction,” which suggests the intention is not necessarily to increase the total cost for users across the board, but rather to distribute where those fees go and how they are calculated based on context. The square root formula is key here. A square root function grows, but at a decreasing rate. For example, the square root of 100 is 10, but the square root of 1000 is about 31.6. If this were applied to a fee percentage (e.g., fee % = constant * sqrt(funding)), the fee percentage would increase as funding increases, but the *rate* of increase slows down significantly for larger projects. Conversely, if the formula is designed to *lower* the percentage as funding increases (as the Cointelegraph report suggests), the percentage drop would be steeper for initial increases in funding and flatten out for very large projects. Let’s consider a simplified hypothetical using the idea that the percentage *decreases* as funding *increases* via a square root relationship (note: the exact formula and its application are subject to the proposal’s details): (Note: This table is purely illustrative based on one possible interpretation of a square root relationship for decreasing fees with increasing funding. The actual formula and parameters in the proposal would determine the precise impact). This model suggests that using very successful, high-funded dApps might result in a lower percentage fee compared to smaller ones, potentially making interactions with popular protocols more affordable in percentage terms, though the absolute value might still be significant on large transactions. Conversely, it allows smaller projects to potentially earn a higher percentage on their initial usage, helping them bootstrap revenue. The total fee paid by the user would likely be a combination of this new dynamic dApp fee and the existing base fee mechanism from EIP-1559, plus validator tips. The proposal would need to clearly define how these layers interact to ensure fees remain predictable and manageable for users. Any significant change to the Ethereum network, especially one involving core economics like fees, must go through the rigorous Ethereum Improvement Proposal (EIP) process. This proposal by Owocki and Mehta is just the beginning of a long journey. The typical EIP lifecycle involves several stages: This specific proposal is currently in the very early “Draft” or discussion stage. It needs widespread community discussion, analysis by cryptoeconomic researchers, and consideration by core development teams. There will undoubtedly be many questions and potential criticisms regarding the practical implementation, security implications, and fairness of measuring and tying fees to project funding. Following the progress of this EIP proposal involves monitoring the Ethereum Magicians forum, developer calls, and community discussions on platforms like Twitter and Discord. It’s a transparent process, allowing anyone interested to observe and contribute feedback. If a version of this dynamic fee structure were ever implemented, it could have profound implications for the future of the Ethereum network and its ecosystem. It signals a potential shift in thinking about protocol design – moving beyond just being a neutral transaction layer to one that actively facilitates and supports the economic models of the applications it hosts. Potential positive outcomes include a more vibrant dApp ecosystem with clearer paths to sustainability, potentially leading to more innovation and better user experiences as developers have reliable revenue streams. It could also make Ethereum a more attractive platform for builders compared to other blockchains that might lack such built-in developer monetization features. However, the challenges are significant. The mechanism for measuring “funding” or “revenue” must be secure, decentralized, and resistant to manipulation. The formula must be carefully calibrated to avoid unintended consequences, such as creating excessive complexity or new avenues for rent-seeking. The interaction with existing fee mechanisms (like EIP-1559) needs thorough analysis. This proposal is a bold idea that sparks important conversations about the economic design space of decentralized protocols. It highlights the ongoing effort within the Ethereum community to evolve and adapt to the needs of its growing ecosystem, seeking innovative ways to balance the interests of all participants – users, developers, and the network itself. The proposal by Kevin Owocki and Devansh Mehta for a dynamic Ethereum fee structure represents an exciting potential evolution in how value flows within the network. By suggesting a mechanism that ties fee extraction to project funding using a square root formula, it directly tackles the challenge of balancing sustainable dApp revenue with the need for fair and accessible blockchain fees. While still in its nascent stages as an EIP proposal, the idea prompts crucial discussions about protocol economics, developer incentives, and user experience on the Ethereum network. Its potential benefits – fostering dApp sustainability and potentially creating a fairer fee landscape – are significant. However, the practical hurdles related to implementation, measurement, and potential unintended consequences require careful consideration and robust debate from the community. This proposal is a testament to the continuous innovation happening within Ethereum. Whether this specific model is adopted or not, the conversation it has started is invaluable, pushing the ecosystem to think creatively about building a more balanced, sustainable, and prosperous future for decentralized applications and their users. To learn more about the latest Ethereum network trends, explore our article on key developments shaping Ethereum price action. Disclaimer: The information provided is not trading advice, Bitcoinworld.co.in holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

Ethereum Foundation Executive Director Clarifies: Pectra Upgrade Has Nothing to Do with the Controversial EOF, the Former Will Be Released on Schedule Tomasz K. Stańczak, executive director of the Ethereum Foundation, released an important clarification on the EOF debate, saying that there is a major controversy over EOF, but there is a key misunderstanding that needs to be clearly resolved: the current EOF discussion has nothing to do with the upcoming Pectra upgrade on May 7. The Pectra upgrade does not include EOF and is not intended to include EOF. All content of Pectra will be released as planned on May 7. CoinDesk previously reported that the Ethereum "EVM Object Format (EOF)" improvement proposal has been included in the Pectra hard fork, which is expected to be executed later this year or early next year. The EOF proposal will make a series of minor changes to upgrade the Ethereum Virtual Machine (EVM). EOF will make smart contracts more developer-friendly, especially for those who use the Solidity or Vyper programming languages to build decentralized applications, but may break existing smart contracts. Developers have added a new version that allows DApp builders to choose which version of EVM to use when deploying code.

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Pi Network has now revealed the approval of a new decentralized application (dApp) called Fruity Pi . Created by Canadian gaming firm Article 19 Group, which has worked with giants such Disney and Nintendo, Fruity Pi adds an uplifting moment to the Pi Network environment. This game allows users to play while using Pi tokens directly to make transactions within the application. This approval is also marked by the provision of a purple check mark, indicating that Fruity Pi has been officially verified in the network. As the Consensus 2025 summit in Toronto approaches, the Pi Core Team is making progress within the Pi Ecosystem. A recently added DApp, Fruity Pi, has now been approved by the PCT with a purple check mark. It is also expected that the PCT will accelerate the deployment and… pic.twitter.com/KUjzxhUvdb — Dr Altcoin (@Dr_Picoin) April 24, 2025 Fruity Pi offers a simple yet interesting concept: players match fruits to get prizes. On the other hand, what makes it different is the full integration with the Pi wallet, so users can use their tokens to buy items or access premium features. Furthermore, this step is considered a concrete effort in developing the utility of Pi Coin, which previously relied more on hope. Just imagine if in the past using tokens was only limited to claims, now it can be used directly in real games. Meanwhile, CNF previously reported that Pi Network had announced the long-awaited mainnet migration roadmap for the community. However, the announcement received mixed reactions, due to the lack of details regarding the implementation schedule or other updates such as a decentralized exchange. This disappointment seemed to be somewhat alleviated by the presence of Fruity Pi and other breakthroughs designed to accelerate the ecosystem. On April 22, 2025, crypto analysts noted striking activity from whales who withdrew around 41 million Pi Coins from exchanges within 48 hours. Not only that, this step was said to be an accumulation signal that could push the price of Pi towards $5. Strong support at the $0.60 level and increasing utility, such as through Fruity Pi, are considered major factors in this optimistic projection. Furthermore, the day before the announcement of Fruity Pi, Pi Network also confirmed their presence as one of the sponsors at the prestigious Consensus 2025 event, which will be held at the Metro Toronto Convention Centre in mid-May. This emphasizes the project’s ambition to expand its global reach. In addition, CNF also reported earlier that Pi Network has launched Pi Ad Network, opening up new monetization opportunities for developers through in-app advertising, with the requirement that advertisers purchase and use Pi. Meanwhile, as of press time, Pi Coin is swapped hands at about $0.6533, slightly down 0.13% over the last 24 hours.