Ethereum, who was previously considered the uncontrolled king of decentralized applications and smart contracts, is facing many challenges today. The rapid growing popularity of a competition network like decreasing transaction fees, decreasing on-chain activity and solana Ethereum Has raised concerns about stability and future. In the same backdrop, two Ethereum Folk Members Kevin Owocki and Devansh Mehta have proposed a new dynamic rate style which tries to establish a balance between the income and fairness of the network.
What is the proposed Dynamic Rate Construction?
Owocki and Mehta have presented an easy but effect methetic model, with the fee calculation according to √ (1000 x n), where N is an allocated funding pool to a project. This model gives small projects a chance to perform more review, while the fee rate on large projects decreases.
For example, if an application has received a funding of $ 170,000, fees = √ (1000 x 170,000) = $ 13,038.4 i.e. about 7% fees.
What benefits for small and big developers?
The biggest feature of this model is that it incars small developers. The fee is taken slightly more than the low -capital projects so that they can remain permanent, while the fee has been capted at 1% for projects that get more than $ 10 million funding. This also provides incentives for scaling at large level.
Ethereum’s declining fees and activity
In April 2025, according to onchain analytics firm Santime, compared to five years Ethereum’s gas fee at the most lowest level with $ 0.01 Reached. The main reason for this is the decline in demand for Defi and other smart contract operations. Due to this, transactions on the network are decreasing and there is a huge decline in total fees revyanue.
Reaction of Institutional Investors
With a decline in the utility of Ethereum, many institutional investors have begun to read or sell their ethe holdings. As long as there is no solid and positive change, market sentiments towards Etreum are constantly weakening.
Solana’s growing strength
In 2024, Solana, leaving behind Etreum, connected 7,625 new developers to its network, while Etreum added 6,456 new developers. This means that the monopoly position of Etreum is now in danger. According to the report of Electrical Capital, Solana has now become the second most featful choice of developers.
Conclusion
This time for Ethereum is of intraosphere and strategy rebuilding. The new fee model proposed by Kevin Owocki and Devansh Mehta is a positive step, which can incase developers and secure the economic structure of the network. However, amidst the declining confidence of emerging competitions and investors such as Solana, Etreum will have to prove itself again through innovation and community support.
