Although Tier 2 offers relatively cheap transactions, Vitalik Buterin said that all transactions must be less than $0.05 to be truly acceptable.
Ethereum co-founder Vitalik Buterin believes Tier 2 transaction fees need to be under $0.05 to be “truly acceptable.”
Buterin made the latest comments in response to a Twitter post by Bankless Podcast host Ryan Sean Adams, who shared a screenshot of average transaction fees for eight Ethereum Layer 2 platforms.
The data comes from L2fees.info, a website that compares the cost of Ethereum’s Tier 1 network to the Tier 2 network built on top of it.
The only Tier 2 that meets Buterin’s desired transaction fee of less than $0.05 is the Metis network of $0.02, however exchanging tokens on the platform still costs $0.14. From there, fees skyrocket, from $0.12 per transaction on Loopring to $1.98 per transaction on the Aztec network.
Tier 1 Ethereum is currently relatively affordable at $3.26 per transaction and a whopping $16.31 per token swap, but this will only be until Yuga Lab releases another collection of non-fungible tokens (NFTs) where fees can skyrocket to $14,000 per mint.
Adams stressed the importance of Layer 2 in making Ethereum accessible, noting that “it’s Ethereum and it’s inexpensive,” but Buterin suggested it didn’t exist yet:
“Must be less than $0.05 to be really acceptable imo. But we’re definitely making big strides, and even proto-dunksharding might be enough to make this possible for a while!”
Buterin’s affordable transaction goal is a long-standing goal, first formulated in a 2017 interview that “money on the internet shouldn’t cost more than 5 cents per transaction.”
In January, Buterin said he still supports that “100%” goal as part of a lengthy Twitter thread in which he discussed some of the most important things he’d said or written in the past 10 years.
“That was the goal in 2017 and it remains the goal now. That’s why we spend so much time on scalability,” Buterin said.
Related: ETH Gas Price Rises as Yuga Labs Makes $300M Selling NFTs to Otherside
Short-term gas price reduction
Proto-dunksharding, or EIP-4844, which Buterin mentioned in his response to Adams as pushing fees, is a recently proposed Ethereum upgrade that will implement the key elements of dunksharding – a new and simplified design of previous sharding projects. network without triggering sharding updates.
Proto-thanksharding will enable a new type of transaction called a “blob-carrying transaction” that will contain an additional 125 KB of data (blobs) that the Ethereum Virtual Machine (EVM) cannot access. The general idea is that this will help to significantly scale the grid in the short term while reducing congestion and competition for gas usage and hence lower gas charges.
“Since validators and clients still need to download the full contents of the blobs, proto-thanksharding is targeting throughput at 1MB per slot instead of the full 16MB. However, there is a significant scalability gain as this data does not compete with the gas consumption of existing Ethereum transactions,” Buterin wrote on his blog last month.
While the Ethereum roadmap is known for its flexibility, the shard chains are set to be updated in 2023 after the mainnet merges with the beacon chain.
Shard chains provide opportunities for storing data horizontally and inexpensively across the network, which in turn distributes load, reduces congestion, and speeds up transactions. Both Ethereum and its Tier 2 are expected to benefit greatly.