Crypto startup to create a tool for predicting ETH fees
- Germany's crypto startup, Upvest, recently raised up to $1 million which it already plans to use.
- The company will use the funds to continue the development of its tool for tracking ETH gas fees.
- The tool, aimed at businesses, collects various data regarding the ETH network, and recommends fees.
A crypto startup dealing in asset tokenization, Upvest, recently raised a bit over $1 million (€900,000). The company’s funds came in new funding from the European Regional Development Fund. The funds arrived as part of the ProFIT program of IBB (Investitionsbank Berlin).
Precise gas calculations for transaction fees
Upvest, based in Germany, already has an idea of what to do with the newly-received funds. The company plans to invest the money into its prediction tool, which can help people who want to trade in Ethereum calculate how high their gas fees will be.
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As every Ethereum trader knows, all ETH transactions consume gas, which is the name for transaction fees within the ETH ecosystem. The gas fees are then distributed to miners who are in charge of executing the mentioned transactions.
Upvest believes that estimating the gas fees for each transaction is risky and cost-inefficient. In other words, there is a fair risk of making the wrong estimate, and either overfunding or underfunding.
If the trader happens to overfund, they will have spent more money than they needed to. Not to mention that the cost will add up, which will also cause them to have to pay more than they needed to if they were more precise.
If the situation is reverse, and the trader underfunds their account, their transactions might not be processed, but dropped, instead.
How dod Upvest solve the issue?
Upvest, fortunately, came up with a solution. The startup’s plan is to create a transaction fee recommendation/estimation engine, which will come in the form of API. To make it, the firm plans to use machine-learning technology.
This technology would collect signals and data from the network in real-time. It would then include the number of transactions that are unconfirmed, as well as the number of active miners. By collecting all of this data, it would make an estimate of how much the size of gas fee should be in order for traders to optimize their costs, and neither overdo it, nor pay too little.
The company stated that the initial results show that cost efficiency goes up by 18%, which would indicate that confirmed transactions are not only faster, nut also cheaper. The startup also stressed that their API is for companies that are making a large number of transactions per day. The company is also keeping track of Ethereum’s progress on its way towards PoS, and that it has an idea how the tool will change alongside Ethereum.