EIP-3651 to cut gas fees for key network participants

The next major upgrade after the merge, Ethereum’s Shanghai upgrade, is expected in late 2023. The upgrade will be a significant milestone as it will allow holders who have staked their Ether (ETH) for years to systematically withdraw them to create a network. It’s more scalable.

Apart from some of the major scalability upgrades, the significant event will 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. reduce Network fees for major network participants called builders.

Coinbase here is the name of the software that builders use to receive new tokens on the network. Every new transaction on the platform requires multiple round trips to the Coinbase software. The first interaction is more expensive as the software needs to “warm up”. After that, the fee will decrease as the number of transactions increases. However, with the introduction of EIP-3651, the Coinbase software stays warm from the start, resulting in lower gas fees to access.

Doing so reduces the cost of calls that send money to COINBASE addresses that are frequently used by systems like Flashbot (no Twitter??).

timbeiko.eth (@TimBeiko) March 4, 2022

As their name suggests, builders are called block builders because they are responsible for packaging Ethereum transactions into blocks. These transactions are forwarded to validators, who sort them into proper order on the blockchain.

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These builders are paid by traders to place deals into blocks in a specific order. In other words, traders pay higher gas fees to validate trades faster. Flashbots is currently the largest builder in the Ethereum ecosystem with his 80% of relayed blocks.

Validators using builders will benefit most from the upgrade, but traders executing trades using builders may also benefit, as they no longer have to pay transaction fees for failed trades. Currently, traders are also charged for failed transactions, as miners need to check with the chain whether the transaction succeeded or failed.

A testnet version of the Shanghai upgrade, called Shandong, went live on October 18, and Ethereum developers will be working on various implementations until September 2023.