In-depth analysis of the impact of EIP-1559 destruction on miners' income
Editor's Note: This article comes fromGolden Finance, reprinted by Odaily with authorization.
Editor's Note: This article comes from
, reprinted by Odaily with authorization.
analyze
secondary title
analysis target
Set three levels of lower limit, median and upper limit for the amount of miners' income destroyed.
secondary titleETHanalyze
We believe the impact of EIP-1559 on miner revenue and ETH holders has not been fully explored. The main reason why this analysis is more difficult than before is that DeFi continues to generate arbitrage opportunities, and the value that miners can extract has accounted for a large part of their income.
Here are some introductions about the impact of EIP-1559 on miners’ income:
EIP-1559 mainly affects the income of miners from the following three aspects:
1. Each block will provide 2
rewards, uncle blocks will have additional rewards.
2. The user bids for the handling fee for packaging and uploading, and the final position of the transaction in the block will not be affected.
3. Miners earn a very large amount of income by choosing whether to insert transactions at a certain point in time. This income is called the value that miners can extract, but the amount is very difficult to quantify. At present, most miners "outsource" this operation. "Give the front-running arbitrage robot, the robot will bid for the tip auction in the transaction memory pool.
After EIP-1559 is launched, miners will continue to earn the same income from block rewards and miner extractable value. If Ethereum is not crowded and the demand is lower than the maximum value of Gas, the transaction fees obtained will be destroyed. After the demand exceeds the maximum value of Gas, traders will hold another first-price auction, and the proceeds will go to the miners.
Fortunately, last week, Flashbot released a dashboard of value that miners can extract. This project can identify transactions that contain miner extractable value by looking for specific miner extractable value generation patterns, the whole process is based on examining the calls in each transaction execution. After combining the overall returns, we can now correctly classify the different types of transactions.
Chart 1: Setting an Absolute Lower Limit
By using the data from the flashbots website, we can set the absolute lower limit of the value income miners can extract. Figure 1 is based on the assumption that there are no other miners extracting value revenue beyond the range discovered by the flashbots. But based on the approach below, we found that many protocols and transaction types were still missing and could only be added later.
Therefore, we believe that this assumption is not valid, but it can provide an absolute lower limit of value income that miners can extract for further analysis.
Exhibit 2 assumes that flashbots are able to correctly classify 67% of miners’ extractable value revenues. We graph this assumption by multiplying the fraction of value miners can extract from all fees by 1.5.
Chart 3: 50% of correctly classified miners can extract value
Exhibit 3 assumes that flashbots correctly classify 50% of the current miner extractable value. We graph this assumption by multiplying by 2 the fraction of all fees that can be extracted by miners.
Chart 4: 33% of miners who correctly classify can extract value
Flaws of this analysis
in conclusion
1. For transactions that do not contain miners’ extractable value, when the transaction is congested, traders will also pay tips, so miners will also get some extra tips, which is the orange area in the figure.
