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Almost 1 million Ether would have been burned last year if the rate proposal had been approved

October 24, 2020

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The long-awaited EIP-1559 would have recorded nearly a million ETH burned in the last 365 days, but miners still reject the proposal.

The implement of the controversial Ethereum (EIP) 1559 upgrade proposal would have burned 970,000 Ether (ETH), worth a total of $ 360 million in the last year. EIP-1559 Is currently up to find ways to reduce transaction fees by introducing fixed fees along with a burn mechanism.

The findings based on data from Dune Analytics and published by DTC Capital director Spencer Noon, generated questions among some in the Ethereum community about why the proposal is still on hold. Twitter user ‘Laur Science’ suggested it should be rolled out at the next fork, adding:

“Hopefully we won’t keep discussing this for another two years while miners get too much $ ETH and undo it for $ USD, keeping the price of $ ETH in check.”

Despite the fact of burning fees taken into consideration before, even before Ethereum’s genesis block in 2015, EIP-1559 was the first serious proposal that suggested integrating the concept into the Ethereum code.

The current proposal, first suggested in 2018 by Vitalik Buterin, would dramatically change the way transaction fees are calculated. EIP-1559 proposes that all transactions have a standard flat rate called a ‘base rate’. This fee is burned and the incentive for miners comes from users adding a ‘tip’ on top of the base fee.

The proposal allows the base rate to help keep the size of the block around 10m of gas. Ultimately, the proposal has four design goals: predictable fees, consistent block size, increased security, and prevention of economic abstraction (fees that are paid in other tokens).

Since EIP-1559 will have an unforgettable impact on how miners earn income, it influenced pushback from the mining community that, since not so long have been enjoying record income. A week ago, Messari stated that Ethereum fees exceeded Bitcoin fees by a record two months.

That same day, ConsenSys developer Tim Beiko published the results of a survey of 25 Ethereum-based computers on the proposal. Of those surveyed, 60% answered in favor; however, eight of the nine mining companies consulted stated that they would reject the proposal if it were implemented as a hard fork.

Earlier this year, Metamask lead developer Dan Finlay raised concerns about assigning the responsibility to miners for correcting the ‘base fee’ parameters. Ultimately, Finlay suggested that the net effect of the proposal would be to make “the tip a kind of single price auction within each block that reproduces all the problems of the current market but with the additional complexity of this”.

Ethereum Name Service developer Nick Johnson expressed apprehension over the proposal due to “the lack of a formal analysis showing that 1559 performs as expected.”

Within a month of the Buterin Tweet, total transaction fees for Ethereum surpassed those for Bitcoin (BTC) before taking a sharp rise to all-time highs.

This is not the first time that EIPs have divided the Ethereum community due to misaligned goals. Last month, EIP-2878, which would cut block rewards by 75%, was also heavily criticized by the mining community.

By: Jenson Nuñez.