EIP-1559 has more or less revenue from Ethereum miners one week after it went online?

EIP-1559 went live. Frankly speaking, this Ethereum improvement proposal was discussed for more than two years before it was finally launched. I believe many people know EIP. -1559 After the completion of the deployment of the Ethereum blockchain, it will have an impact on the income of miners. So how much impact has it had so far? Let us take a look together.

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In fact, EIP-1559 seems to be able to effectively accomplish two things:

1. Destroy Ether (ETH)

2. Limit the block size to an ideal goal

After the deployment of the Ethereum improvement proposal, it may not help users to predict transaction fees within a few minutes or hours, but it can eliminate the uncertainty of transaction pricing in the current online transaction boom. The following figure shows the network activities on the Ethereum 2.0 beacon chain in the past week, in which the network participation rate reached 97.1-99.4%, and the total amount of deposited ETH was 6,629.090 ETH, worth about 20.7 billion US dollars.

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New areas: Ethereum miners’ income remains stable

The Ethereum network used to use the first-price auction model, that is: each transaction is equipped with a bid, how much users give, how many miners receive, when the network is congested, in order to improve “efficiency”, there will always be users who increase transaction fees To increase the processing speed as soon as possible, which will actually lead to unfair competition.

The first price auction mechanism is actually more friendly to miners, but for the majority of users and ecological developers on the Ethereum network, it has the problem of increasing transaction costs.

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Last Thursday (August 5th), EIP 1559 was activated along with the other four EIPs (EIP-3198, EIP-3529, EIP-3541 and EIP-3554) bundled in the Ethereum “London” upgrade. After that, Most of the transaction fees granted to miners in the past will be burned and removed from circulation. So far, about 26756.06 ETH have been burned, accounting for 33% of the increase in the supply of new tokens. However, the decrease in transaction fee income does not seem to have a significant impact on the total income of Ethereum miners. According to Coin Metrics data, after the activation of EIP 1559, the average daily miner income in US dollars has increased by 7.1% and remained at two months. There are two possible reasons for this phenomenon: 

1. The price of ETH has risen. According to Anand Gomes, the co-founder of Paradigm, the upgrade of Ethereum “London” has pushed up the price of ETH and has also attracted some institutional investors. Although the original ETH income obtained by miners from the transaction has decreased, this part of the “loss” has actually been made up because of the increase in the price of ETH;

2. Absenteeism can still be rewarded in the block through the so-called “priority fee”. Since the upgrade of “London”, Ethereum users have paid 7,141 ETH “priority fee”, hoping that their transactions will be processed by miners first .

r2XYmrfUnb4wtAQD3N9enj71EwlaB27jUVmufJNv.jpegIn addition, the rise in the price of Ethereum and the surge in non-homogeneous token (NFT) trading activities have also made up for the loss of potential miners’ income caused by EIP-1559.

NFT trading activity on Ethereum surges

In addition to price activity, the number of on-chain transactions that transfer NFTs has increased by 75% in the past 7 days. This factor has also led to an increase in miners’ income. In recent days, the NFT with the largest transaction volume is the CovidPunks series. These Punks were sold on the same day as the Ethereum “London” upgrade and sold out within a few minutes.

In addition, in the past 7 days, the total sales of CovidPunks have exceeded US$200,000. Some users reported that the transaction failed due to insufficient transaction fees. When these NFTs started to initiate the transaction, the network transaction fee was less than 100 gwei (gwei is one billionth of ETH), but after an hour, Ethereum The gas cost soared to 400 gwei.

In addition, under EIP 1559, miners can still be rewarded through a feature called “priority fee”. As long as users are willing to pay the priority fee, their transactions will be processed in advance. Since the activation of the “London” upgrade, Ethereum users have paid a total of 7,141 ETH, which is worth approximately US$22.4 million at the time of writing.

Since miners will still be rewarded from part of the transaction fees on Ethereum, there is a surge in activities on the chain due to NFT airdrops or popular decentralized finance (DeFi) applications, and traders are willing to increase “priority fees” and other factors , Resulting in an increase in the total income of miners.

Most transactions are not formatted for EIP 1559

As mentioned in previous reports, the vast majority of Ethereum transactions are not formatted for EIP-1559, which means that users have not specified the minimum basic fee or priority fee. In these cases, the remaining transaction additional fees on Ethereum will be automatically split, one part will be used to pay the basic cost (this fee will eventually be destroyed), and the other part will be used to pay the priority fee rewards to the miners.

For users, transactions in the EIP -1559 format are usually cheaper than traditional Ethereum transactions. Therefore, more and more applications and service providers will accept this Ethereum improvement proposal. It may only be time for the entire network to accept EIP-1559. problem. Users and institutions that have not yet adopted it may just want to see if Ethereum has sufficient stability and effectiveness after deploying EIP-1559.

This article is partly from Yahoo Finance

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/eip-1559-has-more-or-less-revenue-from-ethereum-miners-one-week-after-it-went-online/
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