The data confirm three of IP-1559's predictions: an application rate of less than 25% and a 23% decline in miners' earnings

原文 : data verifies three expectations of ip-1559: utilization rate less than 25%, miners' income down 23%

原文来源： Carol, Tong ,  PANews 

The highly regarded reform plan of Ethereum IP-1559 has been online for more than 10 days. According to the monitoring of Dune Analytics, as of August 19 (around 11:00 PM Beijing time), IP-1559 has destroyed 62981 ETH, equivalent to about 195 million US dollars.

As planned by core developers Vitalik Buterin, Eric Conner, and Rick Dudley, the IP-1559 proposal will address the mismatch between ethereum transaction fee volatility and the social cost of transactions, And provide new ideas to reduce unnecessary delays in user transactions and long-term response to the potential risks of blockchain security caused by the absence of block rewards. Beyond that, however, the market has three big guesses about IP-1559: can IP-1559 improve the trend of high transaction costs? Can deflation be achieved? Will it significantly reduce miners' earnings?

To verify these expectations and conspeculations, PAData analyzed the on-chain data of IP-1559 after its launch, and found that:

1) A total of 54,493 ETH was destroyed in the 12 days after IP-1559 was launched, and the average proportion of the total destruction per day in the nominal mining income was about 22.84%, that is, the income of miners supporting IP-1559 decreased by about 23%.

2) THE cumulative Tip (Max Priority Fee) of 1878 ETH will be paid within 12 days after ip-1559 goes online, and the average proportion of the total daily Tip to the actual mining income (destroyed) is only about 1.02%. The miners who supported IP-1559 received very little fee income.

3) As of August 16 (24:00 standard time), the average number of transactions using IP-1559 rule accounted for about 15.72% of the total transactions of the day, and the maximum was less than 25%. The application rate of IP-1559 was still low. In smaller time units, however, the application rate of IP-1559 exceeded 50% at one point on August 19 (02:00 UTC), the highest ever.

4) After THE launch of IP-1559, the Gas price did not decrease, the number of transactions was basically stable, and the average utilization rate of block capacity decreased from 97.26% to 53.02%, which means that the current network status will not increase the Base Fee, and thus the transaction Fee.

5) After the launch of IP-1559, under the condition of incomplete use of this standard, the daily total income of mining decreased from 21,700 ETH to 15,300 ETH this year, with a decrease of about 30%. Even compared with the income level of 17,400 ETH in July, the decrease reached 12%. It is expected that with the increase of IP-1559 application rate, the decrease of mining revenue will be more obvious. But there is no evidence yet that miners are shifting to off-contract markets such as MEV.

6) After THE launch of IP-1559, the average production of new tokens per block is about 2.08 ETH (including tertiary block rewards), but the average destruction of each block chain is about 0.74 ETH, and the average daily deflationary blocks account for about 2.47% of the total blocks on that day. This means that only about 156 blockchains have achieved deflation on an average day, but overall deflation has not been achieved, and it is far from achieving deflation.

Ip-1559 has destroyed more than 50,000 ETH, but the current transaction usage is still less than 25%.

According to the tracking monitoring of Dune Analytics, by August 16 [1], IP-1559 had destroyed 54493.46 ETH in total, 4541.12 ETH per day, and the highest single-day destruction was 5383.87 ETH. The daily total destruction accounted for an average of about 22.84% of the total nominal mining revenue (including the full fees paid by users and all block incentives), with the highest daily percentage of about 26.06%. This means that with the incomplete use of IP-1559, current miners' daily earnings have fallen by an average of about 23 per cent.

Another aspect of ip-1559 reform is that users can pay Tip (Max Priority Fee) according to the actual transaction demand. According to statistics, the total Tip paid by users is about 1877.73 ETH as of August 16. The total Tip amount paid per day is about 156.48 ETH and the total Tip amount per block per day is about 0.024 ETH.

In terms of percentage, the daily Tip total accounted for an average of about 1.02% of total actual mining revenue (total dedestroyed), and the maximum daily Tip was about 1.68%, which means the actual transaction fee was less than 2%. On average, fees accounted for about 6.69 percent of total mining revenue for bitcoin and 16.06 percent for Ethereum, according to PAData's tally of data on the bitcoin and Ethereum chains last year. In contrast, ethereum IP-1559's current fee revenue is still at a relatively low level when it is not fully applied. However, the current state of the ethereum network has remained basically stable, which provides a possibility for realizing one of the original intentions of IP-1559 -- to deal with the hidden dangers of blockchain security caused by no block reward in the long run.

Currently, IP-1559 has not been applied to every on-chain transaction. According to statistics, as of August 16, the average proportion of transactions using IP-1559 in the total transactions of the day is about 15.72%, and the highest proportion in a single day is about 24.71%. Although the current overall application rate is less than a quarter, two trends deserve attention.

Firstly, during the 12 days of observation, the application rate of IP-1559 showed a significant upward trend, and the application rate on the 16th day increased by about 19 percentage points compared with the first day. It is expected that this application rate will increase rapidly in the future. Second, according to the latest data from Dune Analytics, in smaller time units, the application rate of IP-1559 at one point exceeded 50% on August 19 (02:00 UTC), the highest ever.

Ip-1559 implements three expectations

After the proposal of IP-1559, the market has three main guesses: can IP-1559 improve the trend of high transaction costs? Can deflation be achieved? Will it significantly reduce miners' earnings? With the official launch of IP-1559, on-chain data representation has answered these questions.

Gas Prices no longer high?

Ethereum's average Gas price has not declined recently, but has risen slightly. According to statistics, before the launch of IP-1559 this year, the monthly average Gas price of Ethereum was about 98.6 Gwei, but this was mainly affected by the high Gas price in the bull market in the first five months. After June, the average Gas price fell below 50 Gwei and the lowest average price reached 26.9 Gwei. However, after ip-1559 was launched, the average Gas price was 59.72 Gwei, which increased by about 85% compared with the average price in July and 122.01% compared with the average price in June.

In fact, IP-1559 was not designed to reduce Gas prices, but rather to make Gas prices predictable and thus more efficient. The predictability of Gas prices primarily refers to the predictability of the Base Fee, which is closely related to block capacity utilization. As per the rule, the Base Fee will be increased by up to 12.5% when the utilization rate of the block capacity exceeds 50%; When the utilization rate is 50%, the Base Fee remains unchanged; When utilization falls below 50%, the Base Fee will be reduced by up to 12.5%.

According to statistics, this year, before the launch of IP-1559, the average actual usage of each ethereum block capacity was about 97.26%. After the launch, the average actual usage of each ethereum block capacity was about 53.02% as of August 16. Among them, except on the launch day, the block capacity utilization rate was about 69.08%, and the rest of the time, the block chain capacity utilization rate fluctuated slightly within the range of 51.5%±0.1%, and the network status remained relatively stable, which made the commission fee of IP-1159 relatively stable recently.

This can also be seen from the recent trend of monthly average number of transactions on the chain of Ethereum. According to statistics, this year, before the launch of IP-1559, the monthly average number of transactions on Ethereum was about 1,232,400, and the monthly average number of transactions in the last two months (June 1 to August 4) was about 1,173,100. After ip-1559 was launched, average monthly transactions of Ethereum in August were about 1.1530 million, which was basically the same as before. This also means that the underlying stability of block capacity usage is a relatively stable demand for on-chain transactions. While the recent NFT boom may see a surge in demand for a short period of time, it is not enough to change the overall state of the network.

Less money for miners?

Ip-1559 destroyed all Base fees paid by users, which effectively affected the mining income of miners. In the current situation of incomplete application of IP-1559, according to statistics, this year, before the launch of IP-1559, the average daily mining revenue of Ethereum was about 21,700 ETH. After the launch, the average daily mining revenue dropped to 15,300 ETH, a decrease of about 30%. Even compared to the average daily mining revenue in the last two months (June 1 to August 4), IP-1559 still reduced the average daily mining revenue by more than 7%. It is expected that with the increase of IP-1559 application rate, the decrease of mining revenue will be more obvious.

For now, though, the drop in mining revenues has not forced miners to turn to markets outside the agreement, such as trying to get more MEV. According to MEV-Explore, there was no significant increase in the total daily MEV generated after IP-1559 was launched. In fact, since July this year, the highest single-day total of MEV has not exceeded 450 ETH, a sharp drop from earlier this year when it was often in the thousands. Moreover, from the perspective of MEV sources, miners currently receive only 11.7% of MEV through fees. According to PAData's long-term observations, the miner's share has remained relatively stable, always below 12%. It will take longer to see if the future pushes miners to the outside market.

Will Ethereum deflate?

Ip-1559 will destroy some ETH in circulation, which may lead to deflation of ETH. However, based on the current implementation of the online situation, the overall deflation is not yet coming.

According to statistics, since the launch of IP-1559, as of August 16, each new token of Ethereum has generated an average of 2.08 ETH per block (including tertiary block rewards), but the total amount of each block destroyed per day is only about 0.74 ETH. Also, the destruction amount of each block is only 36% of the new output of tokens on a daily basis, and the destruction amount is much smaller than the new output. On the whole, the whole network is still in the state of additional issuance every day.

Although deflation as a whole is still some way off, there are pockets of local deflation every day. According to Dune Analytics, after the launch of IP-1559, as of August 16, the average percentage of daily deflationary blocks in the total block production of Ethereum was about 2.47%, and the highest percentage of daily deflationary blocks was about 3.38%. This equates to an average of 160 deflationary blocks per day, with a maximum of 215 deflationary blocks per day.

Currently, IP-1559 has been up for a short time and the adoption rate is low. As the adoption rate increases, the impact of this proposal on the Ethereum network will be more significant. But the impact can be dynamic, and other ecologies associated with Ethereum can be responsive at any time. The impact of this upgrade is likely to be long-term and should be kept on the radar of any party involved.

Data Description:
[1] All deadlines in this article are at 24:00 GMT (00:00 UTC). Special time nodes will be specified separately.

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