Two Ethereum community members, Kevin Owocki and Devansh Mehta, proposed a dynamic fee structure for the Ethereum application layer to strike a balance between revenue generation for app builders and fairness in fee extraction.
The April 27 proposal outlined a simple equation that uses a square root function that proportionally lowers the percentage of fees as the funding capital allocated to a particular project grows. Owocki and Mehta explained:
„For smaller funding amounts, the fee follows a square root function (sqrt(1000 x N)), providing proportionally higher returns to make building mechanisms for smaller pools worthwhile. For example, if the funding pool is $170,000, then the root of 1000 x 170,000 equals $13,038.4 or 7% is taken as overhead.”
The authors of the proposal added that fees would be capped at 1% once a particular application’s funding pool crossed the $10 million level, ensuring that small app builders can develop decentralized applications without excess fees wh

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