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Why does Fishpond support EIP-1559?

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Fishpond: Many peers have spoken out against EIP-1559.

Staying on the (B) Right Side of History: EIP-1559

Originally written by JK, F2Pool

Translation: RHYTHM 0x49

Chun, founder of Stakefish and co-founder of F2Pool, recently worked at the companyETHDenverDelivered an important speech on "Why Miners Embrace EIP-1559". In this presentation, Chun announced that F2Pool will officially support EIP-1559. In this article, F2Pool will explain in detail why it supports apps that can change the Taifang ecosystem. The EIP - 1559 proposals.

The State of Ethereum

As we all know, Ethereum has been in high growth mode for the past two years. Until now, the 2017 IC0 boom had been seen by many as temporary. For now, however, this is just the tip of the iceberg. With the crash in early 2018 and the bear market that followed, eco-builders didn't stop and created ecologies like DEFI, DAO, NFT, etc. on Ethereum. VW didn't react until early to mid-2020 and turned its attention to the ecological applications built on Ethereum. The clearest evidence can be seen in on-chain data, where the number of transactions on the Ethereum chain has surpassed the 2017 peak.

Photo source: bitinfocharts

The value of trading information on Ethereum blocks is increasing, and the need for block packaging is also increasing. The same can be seen in soaring gas bills. However, we do not yet see the gas bill falling below 10 Gwei.

Ethereum Gas Charges, Source: livdir

Reducing gas costs to a manageable level is not the core issue of this article. Because Ethereum is currently trying to roll out Ethereum 2.0 as a long-term solution to the scalability problem. Currently, there are Layer2 networks available or soon to be launched, which will ease the scalability issues of Ethereum applications until Ethereum 2.0 is rolled out. This article will explore how we can make the Ethereum experience better for users and builders. The stakes have never been higher for getting transactions included.

Gas charges on Ethereum are expected to keep rising over time, but this is art, not science. Gas fees become unpredictable in times of high volatility, new trading opportunities, interesting NFT or token sales, and volatility in bitcoin and Ethereum prices. In order to ensure that transactions are successfully blocked, users are subjected to wild fluctuations and unpredictable gas charges, as well as longer than expected queue times. Sometimes, in the worst case scenario, the gas bill runs out, the transaction packaging fails and the Ethereum is lost for nothing.

Solution: EIP-1559

There have been a large number of articles (Proposal EIP-1559,Will EIP 1559 lead to Ethereum fork candy and why miners end up supporting it?,The Last Piece of the Puzzle in Ethereum Monetary Policy,Vitalik ReviewEIP-1559 provides information about EIP-1559. In short, the core of EIP-1559 is a change in the way gas is paid to miners. At present, miners package deals mainly by selecting the highest bid (i.e., higher gas charges) in the Mempool.

Under the EIP-1559 proposal, the gas fee would be divided into two parts: the base fee and the tip. The base fee is the minimum price a user must pay in order to package their transaction into a block. If EIP-1559 passes, base fees will be destroyed. If a block contains a gas bill that exceeds the 12.5m limit, the block will raise the limit and the final cap of the gas bill will be 25M. The tip can be considered as an additional incentive for miners. Once the gas bill reaches the final cap of 25M, miners can pack in order of the tip rate, similar to the current first price pack.

While experts say that the EIP-1559 has many advantages, we'd like to highlight one thing that the EIP-1559 does: improve the user experience.

For applications and users, the EIP-1559 makes gas charges predictable and can be accurately estimated by looking at the base charges of the blocks being packaged, rather than being packaged at a price higher than the current average gas charges.

The EIP-1559 is led by Tim Beiko, who is a strong supporter of the EIP-1559 and is listening to the community's views. In his judgment, from a technical point of view (Tim Beiko's EIP-1559 Github) There are still some problems to be solved before the EIP-1559 is released. Ethereum EIP-1559 could launch as early as the "London" hard fork in July.

These are the known facts of EIP-1559, and we will discuss why we think the proposal should be supported.

Controversial EIP-1559

The largest group currently opposed to EIP-1559 are Ethereum miners. Miners have a point in opposing EIP-1559, because destroying the base fee would reduce their income. Of course, there is no complete economic analysis of what miners will earn after the launch of the EIP-1559. Setting up a mining business is challenging, and uncertainty about gas costs has created a new challenge for the future planning of the business.

As a result, many pools have spoken out against EIP-1559, most notably our peers Spark Pool and Ethermine.

The current debate over the proposal illustrates the coordination problems within the Ethereum community. It was very nice to be able to discuss the EIP-1559 before it was officially launched. In this case, neither the opposing side nor the supporting side is wrong.

The Ethereum ecosystem needs both the advocacy of the core team working to improve Ethereum and the difficulties and protests and suggestions that we miners and pools face on the proposal.

Then we make a decision based on what we have and what the facts are.

Why do we support EIP-1559

Ethereum is an ecosystem of many stakeholders, each of whom, in their own way, has contributed to the system and shaped the path it is today. Ethereum Core Contributors and Development Teams Paved the Way to Good Public Ethereum Beyond 2014-15. Miners are confident in this early version, keeping it safe even when there is no ecological build. Miners played a key role in keeping Ethereum safe in its early days and then attracting developers to its ecosystem.

Right now, there are thousands of applications and lots of builders on the Ethereum ecosystem. Now, the pendulum is shifting, as builders and users drive the value of Ethereum and cement its leadership in the world of decentralized applications.

Miners are already benefiting from the growing use of Ethereum. This is despite the fact that block rewards have dropped from 30,000 ETH per day in 2016 to 13,000 ETH per day today. However, in fiat currency terms, miners' block reward income has increased from $300,000 per day (at 10 USD/ETH) to $23.4 million per day (at 1,800 USD/ETH) today. This still does not account for MEV (miner extractable value) opportunities due to the prevalence of DEFI.

Right now, user and ecosystem applications on Ethereum are asking for network improvements through EIP-1559.

Historically, we've been taught a costly lesson by not uniting our core users and contributors. After The DAO hard fork, key developers and core contributors built on The foundation of The current Ethereum and helped it thrive to this day. Ethereum Classic (ETC) is still an evolving ecosystem, but has fallen far behind Ethereum in terms of usage and application appeal.

Today, the broad community and core developers support Ethereum's growth, including support for EIP-1559, and it is important to be on the side of users and core contributors.

Another reason we think we have to start EIP-1559 is because of market expectations. The current ETH price is likely to include the value generated by starting EIP-1559. Most members of the community, including investors, are optimistic about the launch of EIP-1559 and hope that the proposal will work. Because, this expectation has a very high expectation reflected in the ETH price. If the proposal is not passed, it could be bad for ETH prices in the short term. A fall in ETH prices could trigger a chain of events that could lead to further liquidation in both centralised and decentralized markets. Ultimately, miners will also be affected, as their income is determined by the price of Ethereum.

We are still open to hearing more about the EIP-1559. We will always keep an open mind and be willing to engage in productive discussions. So far, the only rebuttal to EIP-1559 centers on the short-term loss of miners' earnings. Based on this, FishPool F2Pool fully supports EIP-1559 and promotes the passage of this proposal. We hope that miners and mining pools will join us on the right side of Ethereum history.