Merchants who use builders to run their complex transactions can save a significant portion of their gas fees because they no longer pay for failed transactions.
Ethereum’s Shanghai upgrade, the next major post-merger upgrade, is scheduled for the second half of 2023. The upgrade would be a key milestone as it would allow holders who have staked their Ether
for years to systematically retire them and make the network more scalable.
In addition to some major scalability updates, the key event would also include several minor Ethereum Improvement Proposals (EIPs), including EIP-3651, EIP-3855, and EIP-3860. Among all the upcoming improvement proposals, EIP-3651, called WARM Coinbase, could be a game changer that can reduce network costs for some of the key parts of the network called builders.
Coinbase here is the name of the software that builders use to get new tokens on the network. Each new transaction on the platform must interact multiple times with the Coinbase software. The first interaction costs more as the software has to “warm up”, and then the fees go down as interactions increase. However, with the introduction of EIP-3651, the Coinbase software remains active to begin with, thus requiring a lower gas fee to gain access.
Doing this would reduce the cost of calls making transfers to the COINBASE address, which is often used by systems like Flashbots (don’t they have Twitter?)
— timbeiko.eth (@TimBeiko) March 4, 2022
As the name suggests, constructors are responsible for packaging Ethereum transactions into blocks, the so-called block constructors. These transactions are then forwarded to validators who place them in the correct order on the blockchain.
Related: Vitalik includes a new section in the Ethereum roadmap: The Scourge
Merchants pay these builders to arrange transactions in a block in a certain order, which means merchants pay higher gas fees to validate their transactions sooner. Flashbots is currently the largest builder in the Ethereum ecosystem, accounting for 80% of retransmitted blocks.
While validators using constructors will benefit more from the update, merchants using constructors to run their trades can also benefit as they will no longer pay transaction fees for failed trades. Currently, merchants are also charged for failed transactions, as miners must confirm transactions with the chain, whether they are successful or not.
The testnet version for the Shanghai upgrade, called Shandong, went live on October 18, and Ethereum developers will work on various implementations until September 2023.