EIP 1559 and the Effect on Smart Contract Developers


While many Ethereum ecosystem stakeholders have been excited by Ethereum Improvement Proposal (EIP) 1559’s promises to shake up an increasingly congested network, its potential implications should not be overlooked when making decisions about how you interact with the blockchain in the future, particularly regarding smart contract developments. 

An Overview of Smart Contract Development

Smart contract development is a type of coding that is specific to blockchain technology and enables businesses, organisations, and people to enter into contractual agreements with one another without the use of a middleman. 

Smart contracts are automated and self-executing, which means that as long as all parties involved follow the original agreement and conditions of the contract, the contract will be executed precisely as intended.

Benefits of EIP 1559 for Smart Contract Developers

The EIP 1559 price proposes to add a fee market and the Base Fee method to the Ethereum network. This plan could provide smart contract developers with several advantages, including increased scalability, a more predictable fee structure, and a better user experience.

Scalability: Transaction fees become autonomous of network congestion by implementing the Base Fee protocol. When this is implemented, users will be able to propose transactions with complete faith that they will be verified at a low cost regardless of market conditions — an issue that is currently impeding activity on the Ethereum blockchain due to high gas fees caused by high congestion levels.

Predictable Fee Structure: The Base Fee mechanism aims to create a consistent and predictable transaction cost on the Ethereum network. This would allow users to submit transactions knowing how much they will cost, bringing much-needed transparency to the current fee structure, which is highly dependent on network conditions and miners’ preferences for certain types of transactions.

Improved User Experience: EIP 1559 prioritises user experience by simplifying both cost controls and transaction acknowledgement for users seeking to conduct efficient operations on the Ethereum blockchain. Once developed and implemented, this new system has the potential to simplify the entire process — from preparing a transaction to listing it on blocks — while significantly improving the throughput performance of Ethereum’s smart contracts-based applications.

Challenges of EIP 1559 for Smart Contract Developers

There are some potential challenges that smart contract developers may face under EIP 1559:

  1. Unavailability of wallets: Due to the complexity involved in implementing EIP 1559, many wallets and platforms might not be updated, leading to the unavailability of certain services.
  2. Security risks: The inclusion of new components into smart contracts may open up security vulnerabilities related to the way contracts interact with the network and other external services. Thus, all existing smart contracts must be thoroughly tested for any potential security flaws that could arise after EIP 1559 implementation.
  3. Cost optimisation issues: A different pricing mechanism for transactions would also require developers to analyse spending patterns for their applications and determine ways to further optimise gas costs accordingly. 

This becomes more difficult when multiple tokens are used within a product or service, because each token may require differently scaled pricing structures applied based on its individual dynamics and supply-demand constraints within the broader market trend parameters measured by market capitalisation at a large scale. (which is usually taken into consideration when optimising costs).


EIP 1559 can lower Ethereum gas costs, making it more accessible and cost-effective for smart developers to use. Furthermore, the metering system exerts control over radical pricing, potentially leading to a more predictable fee market for smart contracts to operate on. Although EIP 1559 has some drawbacks, the general consensus is that it could be advantageous to both developers and users. 

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