Ethereum community leaders Kevin Owocki and Devansh Mehta have introduced a proposal to reshape how fees are managed at the application layer, aiming to better support smaller developers and foster broader ecosystem growth.
The proposal outlines a dynamic fee model where applications would initially pay higher fees when their funding pools are small, with fees decreasing as the pool size increases. Specifically, fees would scale according to the square root of the funding amount, creating a structure where early-stage projects face greater costs that gradually diminish as they grow. Once a project’s funding pool surpasses $10 million, the fee would be capped at 1%.
Owocki and Mehta argue that the current fee structure does not adequately support new and smaller developers, particularly as competition from alternative blockchains like Solana intensifies. Their proposed system is designed to make it easier for smaller teams to get started while still ensuring that larger, more successful projects contribute proportionally to the network’s sustainability.
The new model is part of a broader discussion about the future of Ethereum’s application layer, as the community seeks to refine both its economic incentives and its competitive position within the rapidly evolving blockchain landscape.
If adopted, the proposal could significantly reshape the economics of building on Ethereum, encouraging greater innovation and participation while ensuring long-term financial health for the ecosystem.
