Estimating EIP-1559 Fee Burns Under Different MEV Classification Assumptions

Summary

This analysis estimates how EIP-1559 could change miner revenue by separating block subsidies, transaction fees, and miner-extractable value. Under the described fee mechanism, base fees are burned, while miners continue to receive subsidies and MEV; congestion can also produce tips for miners. The authors use a dashboard that identifies some MEV transactions from execution patterns to estimate a lower bound, then model scenarios in which the dashboard recognizes different shares of total MEV.

The scenarios scale observed MEV to account for transactions the dashboard may miss. The authors argue that classification coverage is incomplete and that extraction methods are expanding, so the resulting estimates are uncertain rather than firm upper bounds. They also identify omissions: non-MEV transactions may tip during congestion, MEV transactions still pay base fees, and direct extraction by miners is not captured. Their conclusion challenges estimates that more than half of miner revenue would be burned, but the projections depend on assumptions about which MEV is identified and how those categories map to fees.

Key ideas

• EIP-1559 burns base fees while miners retain block subsidies and MEV-related revenue.
• The analysis uses recognized MEV transactions to construct a lower-bound estimate of relevant fees.
• Alternative scenarios adjust for the possibility that the dashboard identifies only part of total MEV.
• Congestion tips, base fees paid by MEV transactions, and direct miner extraction complicate the estimates.
• The authors treat their projections as assumption-dependent because MEV activity and its classification evolve.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.