EIP-1559 is a network optimization intended to send a small portion of the fees associated with all ETH transactions directly to the network. The tokens would later be burned, thus reducing the total number of coins in circulation at any given time. As a result of this proposal, many expect that Ethereum’s current scalability issues and transaction fees will be significantly mitigated.
What’s more, If EIP-1559 goes into operation, it will have a significant impact on the overall revenue of Ether miners. It is said that as a result of this proposal, the profits of miners could drop by a whopping 50%, which partly explains why many miners refused to implement it and even advocated for an apparent takeover of the network, which could threaten its safety. .
However, to help ease the growing tensions within the Ethereum community, The ETH developer community suggested EIP-3368 certification. The proposal states: Instead of cutting block rewards immediately, they should be kept at 3 ETH for now, and gradually reduce them to about 1 ETH over the next 24 months.
Although EIP-3368 was introduced as a way to defuse tensions between miners and developers in Ethereum, it appears to have received little support, as most miners are still at a standstill with altcoin’s developer team.
Kirill Kuznetsov, the lead developer of the 1inch DeFi complex, told Cointelegraph that the upcoming EIP-1559 is putting miners in a bad position as it severely limits their commission share to a certain maximum, adding: “Deflation will not be able to deal with the amount of commission lost after the upgrade, so miners will earn many times less and may not even be able to pay for their computing costs.”
However, Kuznetsov believes that while miners have their own truth, so do developers, with each party looking for their best interests: “The former is concerned with your earnings, the latter is about your performance, as well as the user experience of the network. But without the first, the latter wouldn’t be necessary, so there has to be some kind of consensus.”
On the subject, Grim Reaper, founder of the pseudonym Pylon.finance – one of America’s largest ETH mining operations – told Cointelegraph that he understands being a miner and developer. The plight of both parties, highlighting the fact that ETH miners often have to wait three to five years just to break even, which hurts even more when you consider that they have spent years building the ecosystem.
Also, since most miners have planned their future earnings based on the current system, It is believed that a change as big as EIP-1559 will take everything away from miners who have built their entire lives on this unique activity, Adding:
“As a developer, I see the need for it because it helps users get involved where only the wealthy can buy when the gas is high. This slows down growth when the market is at its peak. I don’t think this EIP will solve the problem, apart from normalizing transaction costs.”
Moreover, he opined that if the proposal went into effect, the number of transactions taking place on the network would multiply exponentially – due to the new affordability of ETH – which in turn would create a host of congestion problems again, putting miners in a position to come together. More for less and they really leave the crowding problem unresolved.
While specialists anticipate a deflationary future and developers hope that transaction costs will be reduced, Grim Reaper believes that the crux of the problem, congestion, will not change little with the implementation of EIP-1559. “The guillotine has fallen on the miner, and it looks like Vitalik has real solutions on the horizon.”, He said.
Buterin suggests a “first aid” solution.
In reaction to the aforementioned miners’ protest, Ethereum co-founder Vitalik Buterin and other prominent developers associated with the network recently launched the attack and claimed that they had already bolstered their efforts by starting some minor modifications to the existing PoW framework in Ethereum’s beacon chain clients. Not only that, a recent blog mentioned:
“Like a clockwork mechanism, the Ethereum community has rapidly organized the possible solutions to this 51% potential attack. Vitalik describes how Ethereum can quickly perform a” fast merge “from proof of business to proof of stake with limited changes.
Providing his opinion on the matter, Kuznetsov believes that the changes proposed by Buterin and the company to prevent a 51% potential attack could be considered, at best, a temporary correction. However, even in the event of an attack, he indicated that the development team would likely move the network to Ethereum 2.0 as soon as possible. “The best mining pools have no reason to cheat on the network, that is, send invalid blocks”, He said.
Are miners to blame?
While most people seem to sympathize with the plight of the ether mining community, Reid, a broker borrowed from Harvest Finance – one of the productive farming aggregators – indicated to Cointelegraph that what miners are currently doing is similar to the popular documentary. Who killed the electric car? Adding:
“Just as there has been a concerted effort by the oil and auto industries to thwart any attempt to move towards electric vehicles, which will drastically affect their profit margins and monopolies in the auto industry, so Ethereum miners are trying to do the same: protect its dairy cow by any means regardless of the impact on Ecosystem or the end user. “
Alexi Lane, a spokesperson for Ethplorer – an Ethereum-focused analytics platform – believes that from the outside, it seems very clear that ETH miners don’t want to lose their profits, even at the expense of the network’s extinction. In your opinion, Miners simply want to make the most of what they can do now, but hopefully, there will be some solutions in the near future.
Finally, Grim Reaper thinks another fact looms large which is that if no one can reach any kind of consensus, ETH can fork out. ”The real problem is the nonsense storm that will come if ETH opens up and miners go to war. That would totally hurt what’s going on with DeFi“, He said.
March was extremely hectic for the Ethereum ecosystem, albeit for the wrong reasons. For example, On March 7, a number of ETH miners from around the world gathered to express their dissatisfaction with the Ethereum 1559 improvement proposal that is scheduled to start work sometime in July.