Ethereum miners to stage protest against EIP-1559

On April 1, Ethereum miners will pool their hash rate in the Ethermine pool, which opposes the adoption of the EIP-1559 proposal. The protest will last 51 hours.

Ethereum Miners on April 1st, what’s this move about?https://t.co/Io1UsGi51Q

— Red Panda Mining (@RedPandaMining) March 8, 2021

EIP-1559 is aimed at replacing the existing fee market, based on auctions, with a fixed price and a burning mechanism. The proposal will become part of the July London hard fork.

In February, Ethereum miners’ revenue from validating transactions jumped 122.1% relative to January. The share of fees earned 52.9% of total revenue, which reached a record $1.36 billion.

EIP-1559 has divided mining pools into two camps. Opponents were Ethermine and SparkPool, which—along with a number of other participants—account for 60% of the network’s hash rate.

“For educational purposes,” the opponents of the proposal plan to direct computing power to Ethermine. If they manage to accumulate more than 51% of the hash rate, then theoretically miners could make unilateral changes to the protocol.

«This is a demonstration of the miners’ power to coordinate actions, not a willingness to attack the network; there is no such objective. This shows a scenario where a potential attacker would weigh the price. He could rent large amounts of hash rate and create the risk of double-spending or block reorganization», — explained Michael Carter, founder of the Bits Be Trippin mining blog.

Supporters of EIP-1559 believe that its adoption could reduce the overall circulating supply of Ethereum and, consequently, lead to a rise in the coin’s price.

«If demand is high enough, more Ethereum will be burned than created. I sometimes joke: if Bitcoin, with its limited issuance — a store of value — would this apply to us given shrinking supply?, —asked Vitalik Buterin, co-founder of the second-largest cryptocurrency.

As noted, Berlin upgrade in the Ethereum network is scheduled for block 12,244,000, which will be mined around April 14. The final version includes changes to the gas-cost calculation algorithm (EIP-2565 and EIP-2929), as well as new transaction types (EIP-2930 and EIP-2718).

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