In Brief:
- xDai announced to add the support of EIP-1559 on its blockchain ecosystem
- xDai will start supporting EIP-1559 from November 11, 2021.
- They will implement the EIP-1559 upgrade starting from block no. 19,040,000
An Ethereum based side-chain, Xdai announced to add support of EIP-1559 on its blockchain ecosystem from November 11th. EIP-1559 is the basically gas fee burning mechanism that burns base fee rather than paid directly to miners.
The logic behind burning is to send gas fees paid in cryptocurrencies to a “burn address” where no one can use these cryptocurrencies. Owing to this, the crypto supply stays balanced and controls inflation. In August, EIP-1559 was launched with the London Hard Fork.
With the implementation of EIP-1559, xDai base fees will be burned within the protocol. This will create a discrepancy between the xDai balance on the network and the DAI balance from Ethereum locked in the xDai bridge. To fix this imbalance, the corresponding amount of DAI on the mainnet will need to be used as well.
The initial plan is to use the corresponding amount of DAI to purchase and burn STAKE on Ethereum, thus decreasing the STAKE total supply and providing a deflationary mechanism for the token. Block size will be increased to ~30M with the upgrade.
STAKE rewards for the validators will not be affected by the change. However, transaction fees rewards will be impacted. Just like Ethereum, xDai validators will also receive priority fees only.
Moreover, another leading crypto exchange, Binance smart chain announced to introduce a regular fee-burning mechanism, which will be a clone of EIP-1559, with the abbreviation BEP-95.
