After much contention and debate, Ethereum blockchain would finally have Ethereum Improvement Proposal (EIP) 1559 in its London hard fork that has been scheduled for July. The team of developers have stated that the new development would be officially added into the blockchain of the second largest crypto asset by market cap regardless of the sentiments held by the miners of the asset. This disclosure was made earlier today and it was also stated that five other EIPs could be joining EIP 1559 in the London hard fork.
EIP 1559 is a development that has been touted to help solve the issues of high transaction fees that have ravaged the Ethereum network recently. Notably, creators and users alike have been some of the major supporters of this proposal, however, miners and mining pools have registered their discontent about this proposal especially as it gathered momentum towards the mainnet.
We earlier reported that rumors were surfacing that the proposal was going to be launched in July though nothing concrete was established then. This announcement, however, proves our story right.
EIP 1559 Could Hinder Ethereum Miners Revenue Generation
One of the insteresting facts in recent times is that mining Ethereum has been quite profitable. Miners of the asset were able to record over $1 billion in February, with close to 50% of the revenue generated from transaction fees alone. The development of EIP 1559 would lead to a cut in how they are able to generate revenue through this method.
However, a new revenue generation model has become available for miners. Miners can take advantage of “miners extracted value (MEV)” which allows them to act as arbiters in how blocks are packaged to “front-run” profitable trades. This revenue model has become increasingly popular among traders in DeFi who bid gas prices in order to secure a position in the block.