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CDS Crypto News Ethereum Upgrade to Offer Revenue Sharing for Layer 2 Developers

Crypto News

Ethereum Upgrade to Offer Revenue Sharing for Layer 2 Developers

ugur31/07/20231 Mins read742

Ethereum Upgrade To Offer Revenue Sharing For Layer 2 Developers. Ethereum Have Proposed A Scaling Solution That Will Offer (Dapps) Option For Revenue Sharing

Developers of Ethereum have proposed a scaling solution that will offer decentralized applications (dApps) the opportunity for revenue sharing in terms of transaction fees that they generate on Layer 2.

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Ethereum Upgrade to Offer Revenue Sharing for Layer 2 Developers

EIP-6968 plans to introduce a type of token that offers contract-secured revenue (CSR). This will allow developers to receive a share of the transaction fees generated by users interacting with their smart contracts.

According to Kevin Owocki, one of the co-authors of the proposal, CSR will enable new projects to join and build a Layer 2 environment around their values, sharing sequencer fee earnings based on the user with the most usage. If accepted, it will provide smart contract developers on Layer 2 with a viable avenue for income generation.

These new income streams can be used to fund dApp development, public goods, and incentivize developers to join a network. EIP-6968 was first introduced in May 2023, and has gained momentum after a presentation by Owocki at the EthCC conference in Paris.

Road to Layer 3 network deployments

Given that Layer 2 rollups are the leading Ethereum upgrade solution, major Layer 2 players such as Arbitrum, Polygon, and zkSync have started pooling resources to create a framework for Layer 3 networks. Layer 3s consist of app chains dedicated to a single decentralized application. According to Owocki, EIP-6968 caters to ecosystem chains and is a step beyond app chains.

The proposed scaling is a new version of EIP-1559, which went live in August 2021 and introduced Ethereum’s burn mechanism. According to the authors, any network using EIP-1559 can also use EIP-6968.

The proposal suggests that using protocol rewards from Layer 1 to fund smart contract development could be a game changer. Owocki believes it will be interesting to see what kind of movement this will create in the Layer 2 ecosystem and for smart contract developers earning revenue for their contributions to Layer 2.