Seeking to improve economic incentives within the Ethereum ecosystem, community members Kevin Owocki and Devansh Mehta propose a dynamic fee structure for decentralized applications (dApps). This proposal, introduced on April 27th, aims to balance revenue generation for dApp builders with fair fee extraction as network activity faces pressure from competition and declining users. Under this proposed model, a simple square root function will determine fees, with higher percentages for smaller funding pools and gradually decreasing rates as funding grows. For example, a project with $170,000 in funding would incur approximately 7% in fees. Notably, the proposal introduces a cap: once a project’s funding surpasses $10 million, fees will be limited to just 1%. This structure seeks to encourage early-stage development by providing sustainable revenue for smaller projects while supporting scalability for larger initiatives without excessive costs. The call for a revamped fee system arises as Ethereum’s dominance in developer adoption faces increasing challenges. In 2024, the Solana network attracted more new developers than Ethereum for the first time, onboarding 7,625 developers compared to Ethereum’s 6,456, according to industry data. While Ethereum remains the leading smart contract platform, its once-unquestioned position is now under pressure from growing competition. This decline in activity has been compounded by reduced demand for base-layer operations such as DeFi activities and falling transaction fees, with Santiment reporting that fees recently reached five-year lows. Institutional investors have responded to this slump, selling off their Ether (ETH) holdings as market sentiment weakens in the absence of strong bullish catalysts. The community looks to a redesigned fee structure to bolster economic incentives and support continued development on the Ethereum network. To learn more about this proposal and other developments in the blockchain space, visit DeFi Planet.