The controversial Ethereum Improvement Proposal (EIP) 1559 would have burnt 970,000 Ether (ETH) — with a total value of $360 million — in the last year, if it had been implemented. EIP-1559 seeks to reduce transaction fees by introducing flat fees alongside a burn mechanism,
The findings, based on Dune Analytics data and published 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 user ‘Laur Science’ suggested it should be implemented in the next hard fork, adding:
“Hopefully, 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.”
Although the idea of burning fees has long been considered, even prior to Ethereum’s genesis block in 2015, EIP-1559 was the first serious proposal to suggest integrating the concept into Ethereum’s code.
The current proposal, first suggested 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 ‘basefee’. This fee is burnt and the incentive for miners comes from users adding a ‘tip’ on top of the base fee.
The proposal allows the basefee to be varied to help keep block size around 10m gas. Ultimately, the proposal has four design goals — predictable fees, consistent blocksize, increased security, and preventing economic abstraction (fees being paid in other tokens).
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 that Ethereum fees have surpassed Bitcoin