The Dogecoin fee structure, which Dogecoin developer Patrick Lodder posted on Reddit 2 days ago, will reduce all transaction fees as well as reduce costs, a change that will allow node operators to encourage miners to verify transactions much cheaper.
The new fee structure, which Dogecoin developer Patrick Lodder published with his team the other day, and which Elon Musk said ‘Need to be supported’, is expected to settle gradually with various software updates.
Although it was introduced in 2014, the purpose of the fee structure model, which was first implemented in 2018, was to prevent on-chain transaction spamming. In this design, transaction fees take 1 DOGE per kilobyte of transaction data and 2.16 DOGE from average transactions.
However, with the tremendous price increase in Dogecoin this year, these fees have become much more expensive. Currently, many DOGE investors hold their coins on centralized exchanges because withdrawals to personal wallets have become expensive. Transactions below 1 DOGE do not reach the miners this time and often remain unconfirmed.
What will change in Dogecoin?
Most of the proposed change for Dogecoin are aimed at bringing a freer system where miners and node operators drive rates, as CoinDesk reports:
- Cheap transaction fees will drop from 1 DOGE to 0.001 DOGE… Initially, node operators on the Dogecoin network will be able to set these cheap transaction fees.
- The dust limit will be reduced to 0.01 DOGE, thereby paving the way for micro-transactions. In the cryptocurrency industry, “dust” is the split rate of small tokens. Generally, such operations are neglected. The “dust” limit is extremely high in the current Dogecoin model. What was considered “dust” in US dollars last year is now much more valuable due to the increase in the price of Dogecoin this year. Lowering the dust limit to 0.01 to 1 DOGE will make them accepted by miners. By using the dust limit parameter, node operators will also be able to control the dust limit.
- Thanks to the increase from the current fee of -0.00001 DOGE to the block inclusive creation rate of 0.01 DOGE, miners will confirm the transaction on the nearest block. Spam transactions will also be prevented.
- A lot more operations can be done in “empty fields”. “Blank spaces” often remain unused, as even cheap transaction fees rise. “Blank spaces” are a shared/divided area of a block where mining can be done without any block addition fees.
- In the second software update, when 30 percent of the network starts trading at 0.01 DOGE per kilobyte, the recommended minimum fee rate will also be reduced to 0.01 DOGE.
“Transactions will be approved in a reasonable time”
Ross Nicoll, one of the Dogecoin developers, made the following comments on the subject:
“The purpose of Dogecoin transaction fees is to prevent spam. We try to provide recommended values for users to trust. If these values are used, transactions will be confirmed within a reasonable time frame. While there are default minimum fees in the offer, of course anyone can change their nodes to use alternative values.”
As it is known, the proposal was also supported on Twitter and Reddit, especially by Elon Musk, but it is stated that there are some problems.
For example, a developer named Udi Wertheimer responded to the proposal on Github, saying that the development team should lower fees according to market conditions, which will encourage a more robust and dynamic free market. Wertheimer also drew attention to the uncertainty associated with this transition and the possible DDoS attacks to nodes.Share this article