Ethereum (ETH) Eyes Simpler Fees as Network Activity Surges

By design or not, Ethereum (ETH) is once again at the crossroads of innovation. Namely, Ethereum co-founder Vitalik Buterin and developer Anders Elowsson have proposed a plan to streamline the token’s fee structure and eliminate the complexities of Ethereum’s fee management, made worse by prohibitive gas costs in times of congestion.

The codename of the proposal is EIP-7999.

EIP-7999 Spells Predictable Fees

Building on the previous upgrades like the 2021 EIP‑1559, which introduced the notorious base free burn that reduced the total supply of ETH, and the 2024 Dencun upgrade, which effectively slashed the average gas fees by 95%, the new proposal aims to set a maximum fee that will cover all resource costs. The plan is to allow ETH users to specify a maximum fee for multiple resources instead of relying on the convoluted component management that we have today.

If adopted, the new structure would replace the current system of calculating multiple separate components, such as storage and computation, with a more straightforward method of paying a unified fee.

It is a delicate concept that Buterin & Elowsson hope will make the user experience more predictable, eliminate guesswork, and reduce failed transactions due to under-pricing. The EIP-7999 fee structure should also make Ethereum casinos even more efficient. All that, mind you, while maintaining Ether’s market leadership in fee revenue – $2.48 billion in 2024. Currently under community review and fiery back-and-forth in developer forums, the new fee structure is slated for sometime in 2026.

The Gas Challenge

On the cusp of innovation in 2015, the gas fees started to weigh on Ether only two years in. The token’s momentous growth, fanned by a surge in decentralized applications (DApps), led to network congestion and transaction costs that almost made ETH untenable. The DeFi summer of 2021 only made the matter worse, with average gas fees blowing past $50.

To quench the fee fire, Ethereum first introduced EIP‑1559 in August 2021. The upgrade effectively controlled the damage in moderate scenarios and reduced the average fee; however, periods of high congestion still led to increased fees.

Enter March 2024 and the Drecun upgrade, which introduced momentous scalability changes and cut fees down 95%, from $80+ on average to only $0.39. The token itself has suffered since, dropping in price by over 50% at one point, but still keeping its crown for fee revenues. Tron and Solana are catching up quickly, though.

ETH Gaining Momentum

Meanwhile, Ethereum’s network activity continues to spike. Transaction volumes recently reached their highest point in a year, with investors cueing in despite the new SEC staking protocols introducing uncertainty. According to Dune Analytics, more than 36 million ETH, or nearly 30% of its total supply, is locked in staking contracts, signaling broader retail and institutional support.

Speaking of institutional adoption, Buterin recently expressed support for public and corporate entities buying and holding Ether. In a podcast he did recently, the ETH co-founder opined that “companies buying into ETH treasury firms instead of holding the token directly gives people more options, especially those with different financial circumstances.” And with crypto treasuries killing it on Wall Street recently and holding nearly $12 billion in ETH, the token has only to gain.

Ether is winning on the market front, as well. Trading at $3,920, it boasts a nearly 40% monthly gain over Bitcoin and is well-positioned to ride the incoming altcoin pump in the coming months. Some crypto analysts predict a surge of up to 500% as soon as in October, but a more likely scenario is 200%-400% in and around November. Either way is fine by ETH, since the surge signals that the token stands a lot to gain from newfound investor appetite. With news of a more simplified fee structure, that appetite will only widen.