Doge developer Ross Nicoll proposed a 50% reduction in fees as they deem them necessary for the next step in the evolution of the coin as we can see more in our latest Dogecoin news.
DOGE developer Ross Nicoll proposed a plan to reform the fee policy on controversial meme token Dogecoin and with the monumental rise of the coin this year, the network fees increased as well. In turn, this led to an unnecessary dis-incentivization of the on-chain transactions. To counter the problem, the developers are looking at fee policy changes that will see a 50x reduction in fees at a minimum. This could solidify Dogecoin’s attempt to re-invent itself as a payment cryptocurrency but given the Lightning Network offers, cheap BTC transactions, and the plethora of cheap transaction tokens out there, will this turn to reality?
The Dogecoin fee change proposal is up! https://t.co/nYRahWVJoY
— Ross Nicoll (@JRossNicoll) June 27, 2021
The original fee structure set by Dogecoin developers focused on reducing on-chain spam and it centered around 1 DOGE per kilobyte fee which will provide cheap transactions and be balanced enough to prevent large amounts of spam. To further discourage network spammers, the developers recommended a minimum output size of 1 DOGE, and the smaller ones were penalized with a 1 DOGE fee. However, the above was not enforced on the network except as a default in the software and it wasn’t until late 2018 that this policy started to get enforced at the relay code level of Dogecoin nodes. The upshot was the discovery of major numbers of non-compliant transactions per default policy as the 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 the transactions were not implemented correctly due to the missing wallet implementations as most wallets simply implemented BTC-like calculations. The proposed changes were looking to give decision power to the miners back rather than on the relay network. This includes incorporating greater reconfigurability of the fee-related parameters and improving the sovereignty of individual node operators.
In order to achieve this, the developers proposed different implementations. The most complex is the complete overhaul of the fee structure that involved the minimal relay fee and dust limit that sets a default block inclusion fee and restores the functional fee transaction space in blocks while lowering the default fee rate. In comparison to other tokens, the fees on the network are low and the current average fee comes in at $0.49. The developers want reduced fees to encourage more free-flow transactions and the outflow of DOGE from exchanges. Elon Musk for example signaled his approval by saying it is important to support the plans.
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