Data: after the upgrade of "London", will the income of Ethereum diggers be affected?

Published on 8/25/2021   570 views   0 Comments  

When the blockchain reached 1265000, Ethereum officially upgraded eip-1559, also known as "London upgrade". So far, Ethereum officially entered the ETH 2.0 era.

What about the upgraded Ethereum network? In this paper, the block chain data of the first two days after the upgrade of "London" is viewed. This paper analyzes it from the aspects of money burning fee, gasoline price, Ethereum inflation and eip-1559 transaction.

Burning cost

Burning cost is an indicator that most people pay more attention to. In the first two days after the upgrade of "London", Ethereum has burned nearly 9200 eth, accounting for about 0.01% of the total supply. After calculation, it burns eth at an average rate of 3.19 eth per minute.

(burning fee for the first 2 days after "London" upgrade)

At the time of writing, the 10 largest blocks burning eth were mined shortly after the upgrade, which also continued the trend prevalent last month. These crowded blocks were caused by another NFT airdrop.

(10 largest block mining)

Gas guzzlers are contracts that consume the most gas due to user interactionβ€œ After the "London" upgrade, they are also the largest burners in eth. Since the upgrading of "London", the top 10 gas consuming entities burned more than 4500 eth in the first two days.

(based on the chart of the entities that make up the top 25 most fuel consuming addresses)

Breaking down these addresses by type, we can find that NFT is the most, followed by decentralized exchange (DEX). These two addresses account for more than 2 / 3 of the top fuel consumption of eth combustion.

The two bridge contracts of polygon's POS chain and axie infinity's ronin chain provide an indicator for the future of Ethereum.

(gasoline consumption at each address)

However, gas guzzlers are the contracts that consume and burn the most gas. So far, the leaders are binance and coinbase. Overall, the top 10 spenders burned nearly 600 eth in the first two days after the "London" upgrade.

(top ten gas payers)

Looking at gas payors by type, centralized exchanges dominate, accounting for nearly 90% of the top 25 addresses. Spark pool and ethermine burn eth in the second place. They distribute most of the mining profits to Ethereum miners because they can't do this by spending a small amount of gasoline.

(view gas payors by type)

Gas price

Eip-1559 has changed the transaction mechanism of Ethereum from the first price auction to the priority fee relying on "protocol basic fee + user selection".

(the above data comes from Etherscan block browser)

The NFT short mentioned above has also had a significant impact on the basic network cost, becoming the first test case of eip-1559 flexible block size mechanism. With the sharp increase of users' demand for NFT, the basic cost is between rising and falling rapidly.

Contrary to rumors, eip-1559 does not necessarily reduce gas costs. Its function is to provide better gas price estimation by updating the basic cost of the agreement. It played the expected role here. At that time, the basic cost rose from 97 Gwei to 476 Gwei in 6 minutes and fell back in 40 minutes.

(the highest basic cost ever occurred on August 5)

Closely related to the basic fees are tips or priority fees, which are the number of eth actually sent to the digger rather than burned from the blockchain. This also proves once again the successful implementation of eip-1559 mechanism. The figure below shows how long-term high priority costs lead to a sharp rise in basic costs,

(the priority fee soared to a higher level on August 6, while the basic fee did not exceed 200 Gwei)

Ethereum expansion rate

At present, there is a misunderstanding that eth will automatically deflate due to the introduction of eip-1559, and Ethereum prices will explode accordingly. However, this is not the case.

It should be mentioned here that if POW is not converted into POS equity proof mechanism and the subsequent reduction of blockchain, there will still be inflation for Ethereum.

However, to make Ethereum truly a deflation, the first condition is"Each block must burn more eth than the ETH simultaneously allocated to the digger through the block reward"。

In fact, it is estimated that if the gas cost of the included transactions is higher than 150 Gwei, individual blocks will only burn more eth than they create. Overall, eip-1559 reduces inflation, but supply deflation occurs only during periods of extreme network congestion.

(NFT airdrop led to the largest single deflation of nearly 10eth)

The first deflation block of Ethereum was discovered one hour after the upgrade of "London".

(the burning cost of block 12965263 exceeds the basic block reward of 2 ETH)

The ETH supply is likely to become net deflation based on the number of eth pledged and the basic cost after the merger into POS. According to the website ultrasound. Money, considering the 6.5 million eth that have been mortgaged today, the basic cost of 12 Gwei is enough to deflate the supply of Ethereum. Given the parameters selected by users, ultrasound.money website has a good inflation prediction model after merger.

(according to the prediction of ultrasound.money website, the peak supply of eth is estimated to be 118.7 million)

Eip-1559 transaction

Since most wallet providers have not yet switched to eip-1559 style transactions, they account for less than 10% of transactions so far. A comprehensive analysis of eip-1559 is only possible after most transactions have been transferred from legacy to eip-1559.

(transaction mode Statistics)

Why should wallets and their users choose to use eip-1559 style transactions? The reason is that using this transaction type can save eth for users. Follow the following formula:

(maximum cost per gas - (basic cost per gas + maximum priority cost per gas) * gas used

Covidchunks (the culprit of the surge in basic costs) is the beneficiary of the most savings, and has experienced the highest savings per transaction so far when casting a new NFT.

(covidpunks released NFT digital works protected by new crown mask)

(this transaction coexists with 1.36 ETH)

Under eip-1559, Ethereum diggers can still get rewards through the function called "priority fee". As long as users are willing to pay the priority fee, their transactions will be processed in advance. Since the "London" upgrade activation, Ethereum users have paid a total of 7141 eth.

As Ethereum diggers will still receive rewards from some transaction costs on Ethereum, the total income of diggers has increased due to the surge of activities on the chain caused by NFT airdrop or popular decentralized financial (Delphi) applications, and traders' willingness to increase "priority fee".


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