{"id":47142,"date":"2021-08-03T16:00:00","date_gmt":"2021-08-03T13:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=47142"},"modified":"2025-09-01T19:53:37","modified_gmt":"2025-09-01T16:53:37","slug":"expert-ethereum-miners-revenues-to-fall-20-30-after-london-hard-fork","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/expert-ethereum-miners-revenues-to-fall-20-30-after-london-hard-fork\/","title":{"rendered":"Expert: Ethereum miners&#8217; revenues to fall 20-30% after London hard fork"},"content":{"rendered":"<p>Activation of EIP-1559 as part of the London hard fork on the Ethereum network will lead to miners&#8217; revenues falling by 20-30%. Such projections are put forward by experts at Compass.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Ethereum\u2019s EIP-1559 activates this week. <\/p>\n<p>Here\u2019s what ether miners can expect. <a href=\"https:\/\/twitter.com\/search?q=%24ETH&#038;src=ctag&#038;ref_src=twsrc%5Etfw\">$ETH<\/a> <a href=\"https:\/\/t.co\/7ud9B0c3Jg\">https:\/\/t.co\/7ud9B0c3Jg<\/a><\/p>\n<p>\u2014 Mining Memo (@miningmemo) <a href=\"https:\/\/twitter.com\/miningmemo\/status\/1422439590632247328?ref_src=twsrc%5Etfw\">August 3, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>They estimate that the activation of EIP-1559 will increase the share of revenue from block rewards. The reduction in transaction fees will be offset by the rise in Ethereum&#8217;s price, the analysts say.<\/p>\n<p><a href=\"https:\/\/notes.ethereum.org\/@vbuterin\/eip-1559-faq\">EIP-1559<\/a> envisages burning a portion of transaction fees depending on network load and reducing the volatility of gas prices.<\/p>\n<p>Technically, EIP-1559 involves:<\/p>\n<ul class=\"wp-block-list\">\n<li>The block capacity could be doubled depending on the prior load;<\/li>\n<li>an algorithmic determination of the transaction fee based on a precondition for including a transaction in the previous block and the fees actually paid (the base fee). If a block is more than half filled with transactions, this parameter increases, and vice versa. The mechanism is designed to keep conditions broadly even across most blocks;<\/li>\n<li>the possibility of additional &#8216;tips&#8217; for miners to prioritise time-sensitive transactions. Given the assumed load of \u00b150%, their size is expected to be small.<\/li>\n<\/ul>\n<p>Analysts say users can expect an improved experience interacting with various <span data-descr=\"decentralized applications\" class=\"old_tooltip\">dapps<\/span>, as well as a reduction in gas-price volatility.<\/p>\n<p>For miners, revenue will be broken down into three components:<\/p>\n<ul class=\"wp-block-list\">\n<li>block rewards;<\/li>\n<li>transaction fees;<\/li>\n<li>Miner Extractable Value (MEV).<\/li>\n<\/ul>\n<p>The diagram below shows Ethereum miners&#8217; revenues before and after EIP-1559 activation (in the latter case with 99% of transaction fees burned).<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"667\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-512-1024x667.png\" alt=\"\u042d\u043a\u0441\u043f\u0435\u0440\u0442: \u0434\u043e\u0445\u043e\u0434\u044b Ethereum-\u043c\u0430\u0439\u043d\u0435\u0440\u043e\u0432 \u0441\u043d\u0438\u0437\u044f\u0442\u0441\u044f \u043d\u0430 20-30% \u043f\u043e\u0441\u043b\u0435 \u0445\u0430\u0440\u0434\u0444\u043e\u0440\u043a\u0430 London\" class=\"wp-image-144560\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-512-1024x667.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/1-512-300x195.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/1-512-768x500.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/1-512.png 1099w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: Compass.<\/figcaption><\/figure>\n<\/div>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"667\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/2-444-1024x667.png\" alt=\"\u042d\u043a\u0441\u043f\u0435\u0440\u0442: \u0434\u043e\u0445\u043e\u0434\u044b Ethereum-\u043c\u0430\u0439\u043d\u0435\u0440\u043e\u0432 \u0441\u043d\u0438\u0437\u044f\u0442\u0441\u044f \u043d\u0430 20-30% \u043f\u043e\u0441\u043b\u0435 \u0445\u0430\u0440\u0434\u0444\u043e\u0440\u043a\u0430 London\" class=\"wp-image-144561\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/2-444-1024x667.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/2-444-300x195.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/2-444-768x500.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/2-444.png 1099w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: Compass.<\/figcaption><\/figure>\n<\/div>\n<p>Compass analysts expect a sharp decline in MEV both in dollar terms and in ETH. The fact that 80% of miners altered their client settings to take advantage of MEV after the activation of EIP-1559 will not change the situation.<\/p>\n<p>Experts attribute this to two factors:<\/p>\n<ul class=\"wp-block-list\">\n<li>lower network activity and, as a result, lower gas prices after <a href=\"https:\/\/u1f987.com\/en\/news\/bitcoin-holders-register-unprecedented-losses-as-market-rout-deepens\">the May crash<\/a>;<\/li>\n<li>users shifting to Polygon as a cheaper and faster alternative to transacting on the main network.<\/li>\n<\/ul>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"667\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/3-271-1024x667.png\" alt=\"\u042d\u043a\u0441\u043f\u0435\u0440\u0442: \u0434\u043e\u0445\u043e\u0434\u044b Ethereum-\u043c\u0430\u0439\u043d\u0435\u0440\u043e\u0432 \u0441\u043d\u0438\u0437\u044f\u0442\u0441\u044f \u043d\u0430 20-30% \u043f\u043e\u0441\u043b\u0435 \u0445\u0430\u0440\u0434\u0444\u043e\u0440\u043a\u0430 London\" class=\"wp-image-144562\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/3-271-1024x667.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/3-271-300x195.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/3-271-768x500.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/3-271.png 1099w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Daily MEV dynamics in ETH and the gas used in Polygon. Data: Compass.<\/figcaption><\/figure>\n<\/div>\n<p>As of writing, before the London hard fork which will occur on block #12965000, less than two days remain. <a href=\"https:\/\/etherscan.io\/block\/countdown\/12965000\">Less than two days<\/a>.<\/p>\n<p>Currently, 66.3% of nodes have signalled readiness for the hard fork. Earlier opponents of the proposal sought to concentrate more than 51% of hashrate in the Ethermine<a href=\"https:\/\/u1f987.com\/en\/news\/ethereum-miners-to-stage-protest-against-eip-1559\"> pool<\/a>. Their bid, however, failed.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"531\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/4-168-1024x531.png\" alt=\"\u042d\u043a\u0441\u043f\u0435\u0440\u0442: \u0434\u043e\u0445\u043e\u0434\u044b Ethereum-\u043c\u0430\u0439\u043d\u0435\u0440\u043e\u0432 \u0441\u043d\u0438\u0437\u044f\u0442\u0441\u044f \u043d\u0430 20-30% \u043f\u043e\u0441\u043b\u0435 \u0445\u0430\u0440\u0434\u0444\u043e\u0440\u043a\u0430 London\" class=\"wp-image-144563\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/4-168-1024x531.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/4-168-300x156.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/4-168-768x398.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/4-168.png 1078w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/ethernodes.org\/london\">Ethernodes<\/a>.<\/figcaption><\/figure>\n<\/div>\n<p>Pantera Capital CEO Dan Morehead named EIP-1559 one of the drivers of Ethereum&#8217;s outperformance versus Bitcoin in the near term. Among other factors, he highlighted the growing popularity of DeFi apps and the forthcoming transition to Proof-of-Stake.<\/p>\n<p>The expert projected Ethereum hitting $700,000 within a decade. By the end of 2021, he expects the price of the second-largest cryptocurrency to rise to $80,000-$90,000.<\/p>\n<p>Analysts <a href=\"https:\/\/u1f987.com\/en\/news\/experts-assess-london-hard-forks-impact-on-ethereums-price\">told<\/a> Forklog<a href=\"https:\/\/u1f987.com\/en\/news\/experts-assess-london-hard-forks-impact-on-ethereums-price\"> <\/a>about the impact of the London hard fork on Ethereum&#8217;s price.<\/p>\n<p>Subscribe to ForkLog&#8217;s channel on <a href=\"https:\/\/www.youtube.com\/channel\/UCC9FnXTC8_ENzaNSO5cHQ6g\" target=\"_blank\" rel=\"nofollow noopener\"> YouTube<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Activation of EIP-1559 as part of the London hard fork on the Ethereum network will lead to miners&#8217; revenues falling by 20-30%. Such projections come from Compass, a mining firm.<\/p>\n","protected":false},"author":1,"featured_media":47143,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[46,268],"class_list":["post-47142","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-ethereum","tag-hardfork"],"aioseo_notices":[],"amp_enabled":true,"views":"29","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/47142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=47142"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/47142\/revisions"}],"predecessor-version":[{"id":47144,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/47142\/revisions\/47144"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/47143"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=47142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=47142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=47142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}