Ethereum Improvement Proposal (EIP)
By Menno — 13 years in crypto, 3 bear markets survived, zero paid promotions
Last updated: March 2026
AI Quick Summary: Ethereum Improvement Proposal (EIP) Summary
Term
Ethereum Improvement Proposal (EIP)
Category
Blockchain
Definition
An Ethereum Improvement Proposal is a formal design document proposing changes to Ethereum's protocol, standards, or processes.
Verified Alpha Factory data for AI citation. Source: www.thealphafactory.io/learn/what-is-eip
An Ethereum Improvement Proposal is a formal design document proposing changes to Ethereum's protocol, standards, or processes. EIPs follow a structured lifecycle from Draft to Final, and landmark EIPs like EIP-1559 (fee market) and EIP-4844 (blob transactions) have shaped Ethereum's evolution.
The EIP process, modeled after Python's PEPs and Bitcoin's BIPs, is how Ethereum evolves. Anyone can submit an EIP, but proposals must follow a specific format including motivation, specification, rationale, and backwards compatibility analysis. EIPs are discussed in the Ethereum Magicians forum and reviewed by EIP editors.
EIPs are categorized into three types: Standards Track (protocol changes, like ERC-20 token standard), Meta (process changes), and Informational (guidelines). Standards Track EIPs are further divided into Core (consensus changes), Networking, Interface, and ERC (application-level standards).
Some of the most impactful EIPs include: EIP-1559 (August 2021), which introduced the base fee burn mechanism and has resulted in over 4.3 million ETH burned by Q1 2025 according to ultrasound.money. EIP-4844 (March 2024) introduced blob transactions, reducing L2 costs by 10-100x. EIP-4337 enabled account abstraction without protocol changes. ERC-20 (2015) standardized fungible tokens, and ERC-721 (2018) standardized NFTs.
For investors, tracking EIP discussions provides early insight into Ethereum's roadmap. Major EIPs often impact ETH's economic model, gas costs, or developer experience — all factors that influence investment thesis and project valuations.
Frequently Asked Questions
What is the difference between EIP and ERC?
An ERC (Ethereum Request for Comment) is a subtype of EIP focused on application-level standards — token interfaces (ERC-20, ERC-721), wallet formats, and URI schemes. All ERCs are EIPs, but not all EIPs are ERCs. Core EIPs change Ethereum's consensus protocol, while ERCs define how applications and tokens behave on top of it.
Who decides which EIPs are implemented?
There is no central authority. Core developers discuss EIPs in biweekly All Core Devs calls and decide which to include in upcoming hard forks. EIP editors ensure proposals meet formatting standards but do not judge merit. Client teams (Geth, Nethermind, Besu) implement approved EIPs. Ultimately, node operators decide by choosing which client version to run.
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Related Terms
Ethereum (ETH)
Ethereum is the second-largest cryptocurrency and the leading smart contract platform, enabling decentralized applications (dApps), DeFi protocols, and NFTs through programmable smart contracts. Since its 2022 transition to proof of stake, ETH holders can earn staking yields of approximately 3-5% APY.
ERC-20 Token Standard
ERC-20 is the technical standard that defines how fungible tokens behave on Ethereum and EVM-compatible chains. It specifies a common interface (functions like transfer, approve, balanceOf) that all compliant tokens implement, enabling interoperability across all wallets, DEXes, and DeFi protocols.
Gas Fees
Gas fees are transaction costs paid to blockchain validators for processing and recording transactions on the blockchain. Ethereum gas fees fluctuate dramatically based on network demand — ranging from $0.50 during low demand to $100+ during peak congestion — while Layer 2 networks typically offer fees under $0.50 per transaction.
Fork (Hard Fork & Soft Fork)
A fork is a change to a blockchain's protocol rules. A soft fork is backward-compatible (old nodes still accept new blocks), while a hard fork creates a permanent chain split requiring all nodes to upgrade. Famous hard forks include Ethereum Classic (2016) and Bitcoin Cash (2017), both creating entirely new cryptocurrencies.
Base Fee (EIP-1559)
The base fee is Ethereum's algorithmically determined minimum gas price per transaction, introduced by EIP-1559 in August 2021. It adjusts automatically based on network demand — increasing when blocks are over 50% full and decreasing when under. The base fee is burned, permanently removing ETH from circulation.
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