EIP-1559 Approved For Ethereum's London Hardfork Despite Miners ReservationsMarch 6, 2021
Ethereum Improvement Proposal (EIP)- 1559 is officially approved to be included in the upcoming London HardFork this July. The proposal was added despite the Miner community’s disapproval after an all-core developers call.
The EIP-1559 is believed to alter the transaction processing process where currently users pay a higher gas fee to get their transaction picked by the miners in the next block, with the new improvement the user would send the gas fee to the network directly, and then the network would assign a tip to miners. EIP-1559 garnered one of the highest support from the developer community while in contrast heavy backlash from the miner community.
Miner community’s reservations are understandable as under the current circumstances they make the most profit which is evident from the record mining revenue of $1.3 billion. In Fact, the daily gas fee costs are running into millions these days while other blockchains process the same volume for a fraction of transaction costs.
Ethereum network is currently reeling from a never-ending gas fee problem that has made the network quite difficult to use. The raging defi market seems to be the worst affected as the current average cost of $4 makes it quite difficult for anyone to even carry out simple swaps. The scalability issues added with the growing gas fee have made it quite costly to use and as a result, many traders and defi protocols have started to shift to other ERC-20 blockchains.
EIP 1559 Estimated to Reduce Miner Revenue by 20%-30%
The new Ethereum improvement proposal is estimated to reduce miner revenue by 20% to 35% at most, not 50% as previously thought. The new approach to this estimation is based on community efforts to help miners capture ETH that’s currently paid to arbitrageurs and liquidators.
Most of the mining pools are already against the proposal and it is estimated that 60% of the hash power providers are against the proposal. With such a high proportion of the miners against the proposal, one would believe that they would try to hard-fork the network, however many others believe miners won’t take that risk as that could have a direct impact on the price.
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