With a 39% increase in commission fees received during the month of September, miners on the Ethereum network are opposing the new fee system upgrade as it may decrease their earnings.
Thanks to the rise of decentralized finance ecosystems (DeFi), which has increased surprisingly over the last few months, the miners of Ethereum (ETH) are seeing their profits through the commission rates processing transactions on the network increases exponentially. In September alone, Ethereum miners saw a 39% increase compared to the earnings received in August.
The data indicator in blockchain, GlassNode, points out that the earnings of ETH miners, during September, were 450.089 ETH, which is equivalent to about $167,8 million according to the current price of the cryptocurrency at the close of this edition.
Source: GlassNode
The data indicator chart also reveals that the profitability of mining in Bitcoin (BTC) is declining dramatically against Ethereum, as during this same period, Bitcoin miners' earnings fell by about 34%. Now, Ethereum miners are facing another debate: the approval of the Ethereum Improvement Proposal (EIP) 1559, which proposes a reform to the network's miner commission system.
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Community survey
Beiko Team, ConsenSys project manager, recently revealed the results from a community survey applied to a total of 25 projects on the Ethereum network, including miners, DEX,
According to the results of this survey, 42% of the projects chose not to approve the proposal to improve the commission system, considering that it could negatively affect their profits. However, there was another 42% that showed a positive attitude towards EIP 1559, reveals Beiko, although there are still many doubts and concerns about its implementation. 17% of the projects remained neutral towards the proposal.
EIP 1559 seeks to reform the Ethereum fee market. Some of the projects that participated in the survey were: Bitcoin, Silver, Infuria, Kyber Network, ethers.js, POAP, TrueBlocks, Bitfly (etherchain.org/beaconcha.in), Nanopool y 0xBitcoinOf the remaining 25 projects surveyed, 14 did not want to be named in the report and one chose to remain anonymous so that their data would not be included in the report, Beiko said.
The opposition of the miners
Beiko's report reveals that if only the miners' responses to the survey are considered, 89% are against EIP 1559, while if miners are excluded, 60% of projects are in favour of implementing the proposal.
“When asked what their overall impression of EIP-1559 was, 10 projects (42%) had an overall positive impression of EIP-1559, 4 (17%) were neutral or not informed enough to have an opinion, and 10 (42%) had an overall negative impression of the EIP. Miners as a group were the most negative, with 8/9 (89%) of the responses being negative. If we exclude miners, 9/15 (60%) of respondents had a positive impression of EIP-1559.”
Of the 10 projects in the negative, 7 stated that they would not implement the EIP 1559 proposal, even if it is included in a fork in the network in the future. The rejection of these projects is due to doubts in the way in which the EIP will establish the base commission rates in the network, in addition to the fact that one of its potential benefits is the reduction of the Gas prices, and therefore a reduction in commission rates and network incentives.
According to Beiko, EIP 1559 seeks to better align incentives across the Ethereum network, preventing excessive profits for miners and allowing transactions on the network to be faster and cheaper for users. The ConsenSys project manager stressed that EIP 1559 “does not intend to drastically reduce Ethereum fees,” something worth clarifying in future communications about the EIP to dissuade all doubts and concerns about it.
Network congestion
The debate on the implementation of the EIP 1559 proposal is gaining momentum at present due to the network congestion and its high commissions, caused by the high demand for Ethereum to interact with applications, projects and protocols such as decentralized applications (dApps), gaming, and most importantly, DeFi. EIP 1559 seeks to impose a tip or base fee on miners as compensation for their work, removing the incentives that allow commissions to be manipulated on the network. High commission rates may be a great benefit for miners today, but in the future they may hinder and discourage user participation in Ethereum-based projects.
On the other hand, the increase in Ethereum commission rates are also attracting more miners to join the network, a fact that is undoubtedly benefiting the network by exponentially increasing its hash rateOn October 7, the Ethereum network hash rate broke its all-time high, exceeding 250 terahashes per second (TH/s).
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