EIP-1559 Miner Incentives and the Costs of Resisting the Upgrade
Summary
The article examines why Ethereum miners might accept EIP-1559 despite the proposal to burn base fees that would otherwise have gone to them. It frames miner income as block rewards, transaction fees, and miner-extractable value, then argues that mining hardware and operating commitments leave miners economically tied to the wider Ethereum economy. Users create demand for the assets and applications that support these revenues, while users can in principle move more readily than miners can replace that demand.
It assesses resistance through maintaining an old chain, forking Ethereum with copied or fresh state, and manipulating block sizes to suppress the base fee. The analysis argues that the difficulty bomb, loss of application and asset support on a copied chain, difficulty building a new token distribution, and competition among miners make these routes costly or impractical. The supplied text is incomplete in its discussion of the final scenario and omits parts of the argument. It is an economic analysis of the upgrade, not empirical evidence that miners would behave exactly as predicted.
Key ideas
- Miner revenue includes block rewards, transaction fees, and miner-extractable value.
- The article argues that users ultimately generate the demand supporting miner income.
- A copied Ethereum state could lose value when token claims and application dependencies do not transfer meaningfully.
- A fresh chain faces challenges in attracting users and establishing a credible asset distribution.
- Competing miners have incentives to include more transactions, which undermines a coordinated effort to suppress the base fee.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.