Ethereum developers have decided to include EIP 1559 in the London hard fork scheduled for July. EIP 1559 implies burning ETH when paying commissions.
Based on the results of the last meeting of Ethereum developers, it was decided to include EIP 1559 in the London hard fork in July this year, despite the dissatisfaction of the miners. Five more EIPs could also be included in the update.
EIP 1559 will greatly change the transaction – it will be autonomously adapted to the requirements of the network and users will be able to pay only the commission that is actually required for the transaction. Typically, the user sends to the miner for a fee to include the transaction in the block. This gas fee will now be sent to the network itself as part of a “burn” called a commission (base commission), with only optional “tips” being paid to miners.
The proposal has received a lot of support from Ethereum app developers and users, given the current difficulty of choosing the right transaction fees. On the other hand, miners and mining pools are opposed.
ETH mining has become a particularly lucrative business lately. In February, ETH miners received $ 1.37 billion, which is 65.1% more than in January. At the same time, profit from commissions increased immediately by 122.1%. Ether miners received $ 644.4 million for mining blocks and $ 722.8 million in transaction fees. For the first time, transaction fees brought miners more money than block mining rewards.
Since January, Flexpool has launched a marketing campaign against EIP 1559, including Ethermine and SparkPool. More than 60% of the hashing power of the Ethereum network is now against this proposal. F2Pool is the largest pool in favor of the EIP.
At the last meeting, Ethereum developers decided to associate EIP 1559 with a delay in the activation of the “difficulty bomb”, which gradually increases the difficulty of mining on the Ethereum network. Geth development team leader Péter Szilágyi said the delayed EIP 1559 merge helped the danger that no one would fork Ethereum during the update rollout without facing some technical hurdles.
Mining pools have several options to enable EIP 1559 now that it is included in an upcoming update, and most of them involve active network action.
The most dangerous is a 51% attack on Ethereum, which will censor transactions using the EIP structure. However, this is unlikely given the financial incentives that discourage such attacks. For example, a successful 51% attack on Ethereum could drop the ETH rate, and not only in the short term.
A more affordable new option for income is the Miner Extracted Value (MEV) arbitrage strategy, which allows miners to use their position as arbiters to be included in blocks of profitable trades. As a reminder, trading bots that capitalize on Ethereum’s infrastructure deficiencies have generated $ 107 million in revenue in February and $ 314 million since the beginning of 2020.
