25 February, 2024

Ethereum’s EIP-6968 Gains Traction, Promises Revenue Boost for dApp Developers

7 months ago

12 Feb, 2024

  • Ethereum’s EIP-6968 proposal introduces the Contract Secured Revenue (CSR) token, enabling dApp creators to earn from transaction fees.
  • The CSR token under EIP-6968 could incentivize developers, potentially revolutionizing the Ethereum scaling sector.
  • EIP-6968, initially proposed in May, has gained increased attention following a presentation at the recent EthCC conference in Paris.

Ethereum developers have put forth an innovative proposal, EIP-6968, that could potentially revolutionize the Ethereum scaling sector. This innovative proposal could enable creators of decentralized applications (dApps) to earn a portion of the transaction fees generated on the advanced Layer 2 (L2) networks.

EIP-6968 introduces a novel token type, the “Contract Secured Revenue” (CSR), which would provide developers with the opportunity to claim a percentage of transaction fees each time users interact with their smart contracts. This could serve as an impetus for projects to collaborate, establish an L2 around shared objectives, and distribute sequencer fee revenue based on usage.

Kevin Owocki, one of the architects of the proposal, expressed his anticipation about the potential impact of this proposal on the L2 ecosystem. He envisages a virtuous cycle where smart contract developers are rewarded with revenue for the value they contribute to L2s.

Layer 2 solutions are instrumental in enhancing the scalability of the Ethereum network. They facilitate transactions off the main Ethereum blockchain (Layer 1 or L1), mitigating network congestion and reducing transaction costs. The introduction of CSR could incentivize developers to create and deploy their dApps on these networks, fostering innovation and community growth.

The revenue generated from CSR could be allocated for various purposes, such as funding dApp development, public goods, or incentivizing developers to join a network. EIP-6968, initially proposed in May, has garnered increased attention following a presentation by Owocki at the recent EthCC conference in Paris.

The proposal is essentially an advanced version of EIP-1559, which implemented Ethereum’s burn mechanism in August 2021. This proposed upgrade could be adopted by any network that uses EIP-1559.

Meanwhile, the Ethereum network recently celebrated its 8th anniversary. Since its inception, announced by the Ethereum Foundation on July 30, 2015, it has grown significantly. Ethereum and its native currency Ether have become the second-largest crypto asset in existence, boasting a market capitalization of $225 billion and more than 1,900 monthly active developers.

According to Ryan Sean Adams, co-host of Bankless, the Ethereum network has secured $400 billion in value, $3.6 billion in annualized profits, and a total of 17.8 million blocks of digital assets. The network also witnessed the successful implementation of the Merge upgrade in September 2022, transitioning from a proof-of-work to a proof-of-stake consensus mechanism.