Dogecoin (DOGE) developer proposes 50x reduction in fees, wins Elon Musk approval
Developer Ross Nichol is publicizing plans to reform the fee policy on controversial meme token Dogecoin.
With Dogecoin’s monumental rise in value this year, network fees have also risen. In turn, this has led to an unnecessary dis-incentivization of on-chain transactions. To counter this problem, devs are looking at fee policy changes which will see a 50x reduction in fees at a minimum.
This may also help solidify Dogecoin’s attempt to re-invent itself as a payment cryptocurrency.
But, given that the Lightning Network offers quick, cheap Bitcoin transactions, not to mention the plethora of already cheap to transact tokens out there, is there the appetite to make this a reality?
Dogecoin devs want miners to have more control
The original fee structure set by Dogecoin developers focused on reducing on-chain spam. It centered around a 1 DOGE per kilobyte fee, which would provide relatively cheap transactions, yet be balanced enough to prevent large amounts of spam.
Also, to further discourage network spammers, developers recommended a minimum output size of 1 DOGE. Smaller outputs than that were penalized with an additional 1 DOGE fee.
However, the above was not enforced on the network except as a default in the software.
It wasn’t until late 2018 that this fee policy began to get enforced at the relay code level of Dogecoin nodes. The upshot to this was the discovery of significant numbers of non-compliant transactions per the default policy. Investigations showed:
“Approximately 8% of all transactions were taking advantage of the “free tier” inherited from Bitcoin Core. Meaning no fees were paid at all.Another ~11% of all transactions were not implementing fees correctly due to missing wallet implementations. Many wallets simply implemented Bitcoin-like fee calculation.”
The proposed changes look to give decision power back to miners instead of the relay network. This also includes incorporating a greater configurability of all fee-related parameters and improving the sovereignty of individual node operators.
To achieve this, devs propose several different implementations. The most complex is a complete overhaul of the fee structure involving lowering the minimal relay fee and dust limit, setting a default block inclusion fee, restoring a functional free transaction space in blocks, and lowering the default fee rate.
The DOGE community responds
In comparison to other tokens, average fees on the Dogecoin network are relatively low. The current average fee comes in at around $0.49. Versus $7.12 for Bitcoin and $4.17 for Ethereum.
Nonetheless, devs want reduced fees to encourage more free-flowing transactions and the outflow of DOGE from exchanges.
Tesla CEO Elon Musk, the unofficial “DogeFather,” has signaled his approval by saying it’s “important to support” these plans.
Important to support— Elon Musk (@elonmusk) June 28, 2021
Social media comments have also, on the whole, voiced a resounding approval of the proposal. Some even going as far as saying this is a critical step in the evolution of Dogecoin.Source