Ethereum EIP -3651 Shanghai upgrade looks to help cut down gas fees for users of the network. An important aspect of the upgrade is that traders do not have to pay for failed transactions.
The Ethereum Shanghai upgrade, the subsequent significant update after Merge, is scheduled for the second half of 2023. The update would be a significant achievement since it would permit holders who have staked their Ether for years to withdraw it in a methodical manner and make the network more scalable.
EIP-3651, EIP-3855, and EIP-3856 are examples of minor Ethereum improvement proposals (EIPs) that would be included in the key event.
Among the upcoming improvement proposals, EIP-3651, also known as WARM Coinbase, could be a game-changer that reduces network fees for builders, who are among the most important network participants.
Coinbase is the name of the program used by network architects to receive new tokens. Every new transaction on the platform requires numerous interactions with the Coinbase software. The initial interaction is more expensive because the program must “warm up,” but the fees decrease as the number of interactions increases.
Nonetheless, with the implementation of EIP-3651, the Coinbase software will remain warm to begin with, necessitating a reduced gas charge to access it.
Builders are responsible for packaging Ethereum transactions into blocks, hence their designation as block builders. Then, these transactions are transmitted to validators, who organize them in the blockchain.
These builders are compensated by traders to organize transactions in a block in a particular order. As a result, traders must pay greater gas prices to have their transactions confirmed sooner. Flashbots is currently the largest constructor in the Ethereum ecosystem, relaying 80% of all blocks.
While validators who use builders will benefit the most from the upgrade, traders who use builders to execute trades may also gain from the change, as they will no longer be required to pay transaction fees for failed trades. Traders are currently taxed for unsuccessful transactions as well, as miners must confirm all transactions to the blockchain, regardless of their success.
Shandong, the testnet version of the Shanghai upgrade, became live on October 18, and through September 2023, Ethereum developers will be working on multiple implementations.