Kevin Owocki and Devansh Mehta, two Ethereum community members, have suggested a dynamic fee structure for the Ethereum application layer. This proposal aims to balance revenue generation for developers with fairness in fee extraction. They introduced a formula that uses a square root function to decrease the fee percentage as project funding increases. For smaller projects, the fee is based on the square root of the funding amount, which encourages developers to create applications for smaller funding pools. For instance, a funding pool of $170,000 would incur a fee of approximately 7%. Once a project crosses the $10 million mark in funding, the fees would be capped at 1%. This approach is designed to help smaller app builders avoid high fees while allowing for growth as projects scale. The proposal comes amid increasing calls for restructuring fee mechanisms within the Ethereum ecosystem as competition grows from other networks.

Source 🔗