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 structure of fees – it will autonomously adapt to the requirements of the network and allow users to pay only the fees that are actually required to complete the transaction. Typically, the user sends a gas fee to the miner to include a transaction in a block. This gas fee will now be sent to the network itself as part of a “burn” called a base fee, with only optional “tips” being paid to miners.
The proposal has received a lot of support from Ethereum app creators and users, given the current difficulty in 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 block mining and $ 722.8 million in transaction fees. For the first time, transaction fees brought in more money for miners than block mining rewards.
In January, the Flexpool mining pool launched a marketing campaign against EIP 1559. Several large mining pools have joined it, 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, the Ethereum developers decided to link 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 ensure that no one forks Ethereum during the update rollout without facing some technical hurdles.
Mining pools have several options to stop EIP 1559 now that it is included in an upcoming update, and most of them involve actively hostile actions against the network.
The biggest threat is a 51% attack on Ethereum, which will censor transactions using the EIP structure. However, this is unlikely given the various 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.
Moreover, a new income option is becoming available for miners – the Miner Extracted Value (MEV) arbitrage strategy, which allows miners to use their position of arbitrators to be included in blocks of profitable trades. As a reminder, trading bots capitalizing on the flaws in Ethereum’s infrastructure have generated $ 107 million in revenue in February and $ 314 million since the beginning of 2020.
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