Positive News For Dogecoin as a New Transaction Fee Change Emerges
A proposal published by Patrick Lodder on GitHub suggests that Dogecoin’s standard transaction costs should be reduced by 100x. The proposal starts by explaining the platform’s historical fee policy introduced in 2014 to eliminate on-chain spam.
The proposal indicates that in 2020, most transactions did not adhere to the default policy. In essence, almost 8% of the transactions employed a free tier model where no fees were paid, while 11% of transactions used a fee calculation model similar to Bitcoin.
The all-time high exchange rates for BTC and USD are also a significant contributor to the fee increase from the recommended 1 DOGE fee. This situation forces traders to store their DOGE holdings on centralized exchanges because of the perceived high cost of transferring DOGE from the exchange platform to a digital wallet. According to Patrick, transacting DOGE in the past was ten times cheaper than transacting Litecoin (LTC).
The Proposed Modifications
One of the changes suggested by the Dogecoin developer is to considerably lower the relay fee rates to a minimum of 0.001 DOGE. Future fee reductions are achievable if the default fee is reduced below the fallback charge. The second proposal calls for a change on the block addition fee rate, which aims at keeping spam transactions at bay by increasing the minimum block inclusion fee to 0.01 DOGE.
A free transaction space was also part of the proposal stating that certain exceptions can be considered to add transactions into this category. The fourth suggestion touched on lowering the dust limit to 0.01 DOGE. Lastly, the document proposes a reduction of the default fee charge to 0.01 DOGE.
More on the Proposal and its Response
The fee policy proposal expounds on another alternative, stating that the byte rounding function used in computing fees should be removed. Therefore, it is possible to accomplish a fee reduction of 2.5-5x for ordinary transactions. However, the alternative also makes spam transactions more costly with a rounded-up charge.
The proposal is receiving massive support, particularly from the majority of Reddit users who endorse the pitch. In addition, one GitHub user expresses his support mentioning that the changes are sensible and geared towards encouraging a dynamic fee market.
Elon Musk also acknowledges his idea on the modifications after replying to a tweet saying “important to support.” The proposed changes hope to be gradually implemented across different software releases.
The Dogecoin fee change proposal is up! https://t.co/nYRahWVJoY
— Ross Nicoll (@JRossNicoll) June 27, 2021