Ethereum community members propose new fee structure for the app layer
Kevin Owocki and Devansh Mehta proposed a dynamic fee structure for Ethereum's application layer to balance revenue for app builders and fairness in fee extraction. Their April 27 proposal introduces a square root function to lower fees proportionally as project funding increases. For smaller funding amounts, the fee is calculated using sqrt(1000 x N), providing higher returns for smaller pools. Fees are capped at 1% for funding pools exceeding $10 million, promoting decentralized application development without excessive fees. This proposal responds to calls for reforming fee structures amid competition from other networks. In 2024, Solana onboarded more developers than Ethereum, with 7,625 compared to Ethereum's 6,456. Despite this, Ethereum remains the leading ecosystem for developer talent. However, Ethereum fees reached five-year lows in April 2025 due to decreased demand for smart contracts, prompting institutions to reduce Ether holdings as investor sentiment declines.
