{"id":90460,"date":"2020-10-16T06:46:28","date_gmt":"2020-10-16T03:46:28","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/almost-1m-ether-would-have-been-burnt-in-past-year-if-fee-proposal-approved\/"},"modified":"2020-10-16T06:46:28","modified_gmt":"2020-10-16T03:46:28","slug":"almost-1m-ether-would-have-been-burnt-in-past-year-if-fee-proposal-approved","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/almost-1m-ether-would-have-been-burnt-in-past-year-if-fee-proposal-approved\/","title":{"rendered":"# Almost 1M Ether would have been burnt in past year if fee proposal approved"},"content":{"rendered":"

“# Almost 1M Ether would have been burnt in past year if fee proposal app<\/a>roved <\/strong>”<\/p>\n

The controversial Ethereum Improvement Proposal (EIP) 1559 would have burnt 970,000 Ether (ETH) \u2014 with a total value of $360 million \u2014 in the last year, if it had been implemented. EIP-1559 seeks to reduce transaction fees by introducing flat fees alongside a burn mechanism,<\/p>\n

The findings, based on Dune Analytics data and published<\/a> by the Head of DTC Capital Spencer Noon, have raised questions among some in the wider Ethereum community as to why the proposal has not been implemented already. Twitter<\/a> user \u2018Laur Science<\/a>\u2019 suggested it should be implemented in the next hard fork, adding:<\/p>\n

\u201cHopefully, we don’t keep discussing this for two more years while miners get too much $ETH and dump it for $USD, keeping the $ETH price in check.\u201d<\/p><\/blockquote>\n

Cumulative ETH burnt with EIP-1559. Source: <\/em>Dune Analytics<\/em><\/a><\/figcaption><\/figure>\n

Although the idea of burning fees has long been considered, even prior to Ethereum\u2019s genesis block in 2015, EIP-1559 was the first serious proposal to suggest integrating the concept into Ethereum\u2019s code.<\/p>\n

The current proposal, first suggested<\/a> way back in 2018 by Vitalik Buterin, would drastically change how transaction fees are calculated. EIP-1559 proposes that all transactions have a standard flat fee called a \u2018basefee\u2019. This fee is burnt and the incentive for miners comes from users adding a \u2018tip\u2019 on top of the base fee.<\/p>\n

The proposal allows the basefee to be varied to help keep block size around 10m gas. Ultimately, the proposal has four design goals \u2014 predictable fees, consistent blocksize, increased security, and preventing economic abstraction (fees being paid in other tokens).<\/p>\n

As EIP-1559 will significantly impact how miners earn revenue it has triggered push-back from the mining community who have recently been enjoying record revenues. A week ago Messari stated<\/a> that Ethereum fees have surpassed Bitcoin fees for a record breaking two months.<\/p>\n

That same day ConsenSys developer Tim Beiko published the results of a survey of 25 teams building on Ethereum about the proposal. Of those surveyed, 60% responded in favour, however, eight of the nine mining firms queried asserted they would reject the proposal if implemented as a hard fork.<\/p>\n

Earlier this year, Metamask lead developer Dan Finlay, expressed concern<\/a> behind placing the responsibility on miners to fix the \u2018basefee\u2019 parameters. Ultimately, Finlay suggested<\/a> the net effect of the proposal would be to make, “the tip a sort of single-price auction within each block that reproduces all the problems of the current market but with the additional complexity of this one\u201d.<\/p>\n

Ethereum Name Service developer Nick Johnson, stated<\/a> his apprehension of the proposal due \u201cthe lack of any formal analysis that shows 1559 behaves as intended.\u201d<\/p>\n

In July, responding to ever increasing gas fees, Vitalik Buterin once again called on EIP-1559 as the ultimate solution.<\/p>\n

\n

Transaction fee revenue is now nearing half as high as block reward revenue. This actually risks making ethereum *less* secure because of https:\/\/t.co\/Dase8SL30z<\/a>. Fee market reform (ie. EIP 1559) fixes this; another reason why that EIP is important. pic.twitter.com\/eqU3tAMh67<\/a><\/p>\n

\u2014 vitalik.eth (@VitalikButerin) July 21, 2020<\/a><\/p><\/blockquote>\n

Within one month of Buterin\u2019s Tweet, total transaction fees for Ethereum passed that of Bitcoin (BTC) before taking a steep ascent to all-time highs.\u00a0<\/p>\n

This is not the first time, EIPs have divided the Ethereum community due to malaligned goals. Last month, EIP-2878, which would reduce block rewards by 75%, was also criticised heavily by the mining community.<\/p>\n<\/div>\n