EIP-1559 Proposal: A Major Change in Ethereum's Transaction Pricing Mechanism

The EIP-1559 proposal aims to address the transaction pricing issue on the Ethereum network. This proposal was put forward by members of the Ethereum community in November 2018 and made significant adjustments to the transaction pricing scheme of the Ethereum network.

The main changes include:

1. Adjustment of transaction fee structure: transition from the original market auction mechanism (where higher bids are prioritized for packaging) to a model consisting of a base fee plus a tip.

2. Dynamic Block Size: Introduce a scalable block size design to address instantaneous network congestion.

3. Dynamic Adjustment of Base Fees: The base fee for each block will be automatically adjusted based on network congestion. When the gas consumed by the current block exceeds the target gas limit, the base fee will increase; conversely, it will decrease.

4. Transaction Packaging Mechanism: Users can set a cap on the base fee and tip for each transaction. During network congestion, the tip is used to incentivize miners to prioritize packaging the transaction.

5. Transition Plan: The proposal includes a transition period, during which half of the blocks will continue to use the original bidding mechanism, while the other half will adopt the new fee mechanism, gradually transitioning to the new plan.

Impact on miners:

The most notable aspect of the EIP-1559 proposal is that the base fee will be burned instead of being paid to miners. This change could significantly impact miners' earnings, as they will only receive a fixed block reward and tips from transactions, losing part of their original transaction fee income.

Impact on users:

1. Simplified trading process: Users no longer need to estimate the gas price when packaging transactions; they only need to set the maximum amount they are willing to pay.

2. Reduce transaction costs: Avoid situations where you pay excessive fees due to inaccurate gas price estimations.

3. Improve trading efficiency: Alleviate the problem of transactions being in a pending state for a long time.

4. Enhance user experience: Especially for developers and users who frequently interact with smart contracts (such as DeFi participants), using the Ethereum network will become more convenient.

Impact on Investors:

Due to the burning mechanism of base fees, EIP-1559 may bring a certain deflationary effect to Ether, which is seen as a positive factor by some investors. However, the actual driving forces behind price changes may be more complex.

Summary:

The core feature of the EIP-1559 proposal is to improve the usability of the Ethereum network while weakening the transaction packaging profits of miners. Although the proposal has significant implications both technically and economically, its final implementation remains uncertain due to potential strong opposition from the mining community. The Ethereum community will need to seek a balance between various interests to promote the implementation of this important upgrade.