Will EIP 1559 bring Ethereum fork candy? Why did the miners ultimately choose to support it
Source: Babbitt
Author: Hasu and Georgios Konstantopoulos  
原文标题：《 EIP 1559 会带来以太坊分叉糖果？为何说矿工最终会选择支持它 》
Compiler: NBSP;
Note: The EIP-1559 proposal has created a huge divide of opinion within the Ethereum community, and the opposition has mainly come from the mining community, to which cryptocurrencyResearchers Hasu and Georgios Konstantopoulos analyzed five possible paths for miners, and they argue that all attempts to oppose the EIP-1559 proposal (including various alternatives) have been madeyCan adversely affect miners, so the best strategy for miners is to support the deployment of EIP-1559. The opinions of the article represent the original author only.
EIP-1559 is one of the most anticipated Ethereum upgrades of all time, radically changing the way users bid for transactions, among other benefits.
The EIP-1559 proposal now has overwhelming support within the community, is technically ready to be incorporated into Ethereum after the Berlin hard fork, and is now waiting for the coredevelopersOf the assessment process. More recently, miners have turned against the proposal, which is not surprising given that the scheme would burn up some of the transaction fees miners had previously received.
Although this may seem counterintuitive, our assumption is that the miner's best strategy is to support the deployment of the EIP-1559.
We test this hypothesis by examining the two most effective ways miners can protest this proposal :(1) fork Ethereum to create a rival coin without the EIP-1559 proposal, and (2) block EIP-1559 on Ethereum by setting BaseFee to zero.
After considering the feasibility and opportunity costs of these options, we found that any form of aggressive protest would do more damage to miners' long-term earnings than working with users.
Miners are structurally bullishETHAnd the Ethereum economy
EIP-1559 will affect miners' earnings and currently includes three sources:
Block subsidies of 2 ETH per block, plus additional incentives for tertiary blocks;
The cost for users to bid for their transactions to be included in the block space, regardless of their final position in the block;
Difficult to quantify, but highly valued miners can extract value (MEV), which most miners currently "outsource" to jump start and arbitrage bots, which bid against each other in Mppool for these revenue opportunities (which also leads to higher network fees and thus higher miner earnings).
After EIP-1559 is activated, miners will continue to receive the same income from the block subsidy and MEV. As long as the system is not congested (demand is below the maximum gas limit), the inclusion fee is burned. When demand exceeds the maximum gas limit, the two parties will bid for an additional first price, and the final bid fee will go to the miners.
In order to get those returns, the miners have toinvestmentOn mining hardware, power purchase agreements, and other capital expenditures. These investments make them structurally bullish on ETH and the Ethereum economy because they have to mine to make a return.
While we don't deny that EIP-1559 has the potential to reduce one of these three revenue streams, miners still have enough revenue streams in the future to protect Ethereum and its users. Even if all Basefee is burned and destroyed, MEV and block subsidies will remain an important source of income for miners. Finally, the deployment of this upgrade could also mark a turning point in demand for Ethereum users, ultimately contributing to the growth of the Ethereum economy as a whole.
The user is the Ethereum economy
To understand the dynamics of Ethereum, it's important to understand that all three revenue streams come from users and the applications and businesses that serve them.
Users create demand for ETH, which miners then sell in exchange for fiat coins and other tokens in the Ethereum ecosystem. Users' demands for transfers, transactions, loans and so on will generate congestion costs. Finally, their use of the DEFI application, such as decentralizationexchange(DEX), creating MEV and other opportunities in the form of price arbitrage for miners.
Users are the ethereum economy, miners to the networksecurityIn the form of providing services to them. It's a business relationship -- miners aren't offering this service out of goodwill, but in response to the financial incentives their users create for them.
Users have no moral (or other) obligation to pay miners more than is necessary to make Ethereum safe, and certainly miners have no moral (or other) obligation to continue mining if it is unprofitable.
Ultimately, the dynamic between users and miners can be explained by substitutability. Miners are unlikely to replace current Ethereum users as its primary source of revenue, but users are likely to replace some, if not most, of the current Ethereum miners.
After this basic relationship has been established between the miner and the user, we will apply the framework to various scenarios where the EIP-1559 is activated.
Scenario 1: Miners maintain an old chain without EIP-1559
We mention this only for completeness, because in many other blockchains, upgrading faces an inherently uphill battle. This is because it is often cheaper for users to stay on the existing blockchain without doing anything, and therefore easier to block new proposals.
This was not possible with Ethereum due to difficulty bombs. In short, without a hard fork to reset the difficulty bomb, the mining difficulty would increase until the Ethereum network itself came to a standstill. This makes it impossible to stay on the old chain, and any EIP-1559 counterparty will use the same price to hard fork, at least to remove the difficulty bombs.
Scenario 2: Miners create a competing coin and replicate the state of Ethereum
A more feasible suggestion would be for miners to simply fork Ethereum and create their own competing coins (something like thisETC", or forked out of BitcoinBCH). Whether forking makes sense depends on the opportunity cost of doing so . In the case of EIP-1559, miners had to decide between digging up a new competing chain and the existing Ethereum chain.
This opportunity cost is not a joke, because as we mentioned earlier, in order to pay any revenue to miners, blockchain first needs to create value for users in order to receive valuable block subsidies, congestion fees, and MEV. Bitcoin and Ethereum have been forked dozens (if not hundreds) of times, but most forks have never gained traction with any users.
It's much easier to establish that traction when you can fork a blockchain state as well, as all successful forks in the past have done. In Bitcoin, the status is simply a list of the currency's ownership. BCH forked the list to take advantage of the existing supply of bitcoin and distribute it to allBTCThe holder drops in new coins.
But the state of Ethereum is much more complicated, involving not only the issuance of ETH, but also thousands of different tokens,Intelligent contract, applications, etc. These things can be bifurcated, too, but they're just skeletons on another chain.
For example, many of the large currencies on Ethereum (e.gStable currencyOr WBTC) are claims on an asset in the real world. Forking does not actually replicate these assets, and these tokens will continue to run on the EIP-1559 Ethereum blockchain, but have no value on the fork chain.
As a result, the remaining DEFI applications on the fork chain that rely on collateral, such as the stablecoin DAI backed by collateral or any form of AMM pool, also lose their meaning. In short, everything except ETH, including vital off-chain infrastructure such as prophets, clearing bots, etc., will explode and cause huge chaos on a forked chain.
While ETC was able to fork out from Ethereum in 2016, a similar event is no longer possible today. The emergence of tokenized assets and Defi made the state of ethereum non-forkable .
Scenario 3: Miners create competing coins with a new state
If the Ethereum state can't fork, what about competing coins that simply copy the security elements of the Ethereum state (such as the distribution of ETH) and start from a completely new state?
This is much more feasible than scenario 2, where other "stateless" forks of Ethereum, such as TRON and the more recentCurrency,Smart Chain (BSC) has proven this. The success of the latter, in particular, proves that leveraging Ethereum's virtual machine (EVM), existingThe walletHuge value of infrastructure (such as MetaMask) and developer tools. In addition, while dApps are not automatically replicated, they are very simple to deploy and new assets can be issued at a later time.
Given the rapid success of the BSC, whether it will be used on the marketPoWDemand for "unlicensed" versions of mining rather than centralized operators? The new blockchain could even raise the gas limit for users who are currently unable to use Ethereum due to high gas prices.
But on further reflection, this approach is also fraught with problems, and the problems revolve around the distribution of supply.
If the new chain decides to reset the ETH's supply allocation and starts at 0, it will lose the existing supply allocation. It will take years of high inflation to channel new supply allocations, making assets less attractive. BSC, by contrast, does not have this problem because Binance is the only block producer that does not require additional mining incentives.
But if the new chain replicates the distribution of ETH, then a lot of the new ETH will be in the hands of potentially hostile users, who may use the coins for a long time to keep prices down. This makes any block rewards for miners on the new chain worthless, and suggests that even "stateless" forks require a certain amount of support from existing users.
Scenario 4: Miner adds new chain, but blocks EIP-1559
As we have already analyzed, any attempt to create a competing coin is largely doomed to failure. That leaves open another possibility, the one most discussed by miners at the moment. In this case, the miner would join the new blockchain along with the user, but then inhibit the EIP-1559 mechanism from burning any ETH by controlling BaseFee to 0.
The method works as follows: The EIP-1559 controller determines the BaseFee of the next block by observing the size of the previous block. If the previous block exceeds the target gas limit (50% of the maximum gas limit), BaseFee is increased to limit the trading demand. If it falls below the target GAS limit, BaseFee is reduced to encourage demand.
Miners can technically control how many transactions they include, and therefore the block size, and thus BaseFee. If the miner does not dig only half-full blocks, BaseFee will never rise above zero, and therefore no costs will be burned. However, competition between different miners has made this strategy impossible in practice.
First, let's say a pool with 5% capacity tries to implement this strategy and will only mine half-full blocks or smaller (even if the demand is much higher than this level). At the same time, the other 95 percent of the computing power would dig up larger blocks, generating more revenue from fees, and BaseFee would increase anyway. A pool that controls 5% of its computing power quickly realizes that it is losing money and either gives up or loses its computing power. This suggests that self-interested miners want to include as many deals as possible, as long as there is competition between them.
So what happens if there's less competition? Imagine, for example, that 60 percent of the miners agreed to implement this strategy. The result is the same, because 60% of the cartel miners group each harvest half full state of blocks, the remaining 40% of the mine will dig up the complete block, and all the extra revenue from congestion fees and MEV, such basefee will increase over time, therefore, in this case, we call the unstable coalition.
The strategy works only if rival miners can find a way to eliminate the competition, so that no one else can dig large blocks. With 60 percent computing power, they can do this by implementing what's called Miner Activated Soft Forking (MASF). This Miner Activated Soft Forking (MASF) will invalidate blocks that are more than half full, so 60% of miners should ignore them. Now, 40 per cent of the miners are technically still able to mine the larger blocks, but 60 per cent will refuse to dig on top of those blocks, so all the deals and block rewards allocated by a few cartels will evaporate.
Now, you have to understand that Miner Activation Soft Forking (MASF) is nothing new. Today, miners can already form such cartels by, for example, capping gas caps to raise fees, charging more for big transactions, or setting a price floor. All of these strategies seem more profitable at first, but miners have good reason not to try them.
First, they require the co-operation of many parties who do not trust each other, which will be hard to achieve. But more importantly, MASF would be an unprecedented attack on the Ethereum network and its users. This would both destabilize the network at the consensus level and undermine user trust in Ethereum. This is already threatening the futureminingRevenue, but users can also be more active in opposing such censorship. For example, we want users to start broadcasting their transactions directly to friendly mine pools in order to deduct fees and MEVs from the review pool.
To sum up, Basefee manipulation is not a stable equilibrium for miners who do not implement MASF. But if the miners do implement MASF, it would be an unprecedented self-destructive attack on Ethereum, and of course their own investments .
Scenario 5: Miners join the new chain and implement EIP-1559 smoothly
Given the poor results for the miners in Scenario 1-4, we are convinced that their primary option is simply to cooperate with the user.
Even if miners make less money on the new chain (not necessarily), they still make a lot more than they would if they tried to create competing coins. Any such competing coin would have a value of close to zero relative to ETH and would not incur transaction fees due to congestion or MEV due to DEFI arbitrage opportunities.
In addition, implementing MASF to suppress BaseFee would be an unprecedented transparent attack on Ethereum and its users. We've never seen this kind of attack in real life, and for good reason. It may undermine the confidence of users and the value of ETH, as well as the economic activity taking place in the system, thus directly harming the interests of miners.
Possible concession
In addition to the five scenarios discussed above, we also discussed the different concessions that users might make to appease miners. The main ones are:
Increased block subsidies for new chains to compensate miners for their losses from burning basefee;
EIP-969: Change Ethereum's PoW algorithm to exclude ASIC miners in the network;
Instead of burning BaseFee, for example, distributing it to miners in the next N blocks;
However, we emphasize again that working with users to upgrade is already in the miners' best interest. As a result, the user does not need to satisfy the miners' needs or make any further concessions to them.
conclusion
These are our expectations for the impact of the upcoming EIP1559 conversion, and we are confident in our analysis. We look forward to discussing these arguments with the community at the upcoming EIP-1559 roundtable (February 26, 2021, 14:00 UTC).
1. There are other significant costs involved in bringing a new blockchain to market.
2. We highly recommend that you read this by Haseeb QureshiEthereum is now unforkable because of DEFI. His article lays out in great detail what would happen if someone tried to fork the state of Ethereum, concluding that this is simply not possible today.
3. For the formal analysis of the same argument, please refer to Section 6.2 and Section 7 of Timroughgarden's analysis.http://timroughgarden.org/papers/eip1559.pdf
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