With complete official backing secured, the Ethereum Improvement Proposal (EIP)- 1559 looks certain to be included in the forthcoming London Hardfork scheduled for July. However, while the development has been largely welcomed among developers and the users (who are the core stakeholders), there is a growing negative perception among Etheruem miners towards the proposal.
But Etheruem miners are the only ones in the opposition quarters. Mining pools participants together with hash power producers have met the initiative with equal reservations.
EIP-1559 prompted by high trx fees on ERC-20 networks
According to the developers, the proposal was formulated to specifically address the current situation where users are forced to commit unreasonably high percentage of transaction value as gas fees, before funds can be successfully sent. However, when the EIP-1559 is finally implemented, all of that would change.
Users only need to register their transaction by releasing a gas fee, which the network picks and automatically assigns to a miner who in turn inherits the obligation to process the transaction, while keeping the gas fee as the incentive.
The situation is even worse in the DeFi ecosystem, where the minimum amount required to execute trade swaps hovers around $4. That added with the scalability problem of Etheruem network has forced many DeFi projects to explore alternative blockchain networks.
Miners’ revenue to be greatly affected
There are justifiable reasons why miners are all weary over the EIP-1559 initiative. From the onset of the current gas fee problem, daily records of profitability in miners’ revenue are being recorded, with the day-to-day average running into millions of dollars.
It is forecasted that the successful implementation of EIP-1559 will cause a 20%-30% reduction in miners’ earnings. Some observers have voiced concerns over the fact that miners might initiates a different hard-fork of the network to counter the impacts of the proposal.
However it is generally believed that majority of miners won’t take that route as it could negatively affect the price of etheruem, thus plunging their earning deeper down the slope.