The Ethermine mining pool operator, Bitfly, has launched in beta software to implement the Maximal Extracted Value (MEV) arbitrage strategy. It is designed to compensate miners after the activation of EIP-1559.
Announcing #Ethermine MEV beta! 🥳
In order to compensate the upcoming mining reward reduction caused by the adoption of EIP-1559 we have launched our MEV beta program.
80% of our MEV revenue will be distributed alongside the mining block rewards.
— Bitfly (@etherchain_org) March 17, 2021
MEV automates the sequencing of transactions on the blockchain based on potential arbitrage opportunities. Over the past 24 hours, profits could amount to $3.8 million, according to MEV-Explore.
Ethermine estimates that, thanks to the initiative, mining revenues could rise by 1-10%. Bitfly will distribute 80% of this amount together with the reward for the found block. Five percent will go to supporting the ecosystem through grants via @gitcoin, with the remainder — to developing the MEV strategy.
Earlier, another mining pool announced the MEV beta test — Flexpool.
EIP-1559 is aimed at replacing the existing fee market, based on auctions, fixed price and burn mechanism. The proposal will form part of the planned July the London hard fork. In February the share of fees earned amounted to 52.9% of miners’ total revenue, which reached a record $1.36 bln.
Ethermine, which accounts for 20% of Ethereum’s hashrate, became the initiator of a campaign against EIP-1559. The operator confirmed the stance remains unchanged, citing security concerns. The mining pool pledged not to participate in “hostilities” against the network.
A few more words on EIP-1559
We opposed EIP-1559 because of security concerns. These concerns could get mitigated by adopting EIP-3368. Independent of the outcome (EIP-1559 & EIP-3368) we’ll never endorse nor pariticipate in any kind of hostilities by miners against the network.
— Bitfly (@etherchain_org) March 17, 2021
As a reminder, Ethereum developers also introduced EIP-3368. The proposal envisages an increase in block rewards for miners to 3 ETH and its reduction to 1 ETH over two years.
Co-founder Vitalik Buterin presented the mechanism for a rapid merge of the current network with the Beacon Chain, the second version of the protocol.
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