Welcome the guests from the Ethereum Foundation. They are: Tim Beiko: Coordinator of AllCoreDevs conference call; Hsiao Wei: Ethereum researcher.
We know that both investors in Ethereum and miners are very concerned about the upgrade of Ethereum in the future. In the latest survey I did, there were more than 4,000 readers on Chinese social media Weibo, and 55% preferred Ethereum to Bitcoin. From very early on, Chinese investors and the industry have been important supporters of Ethereum.
Since last year, the DeFi ecosystem of Ethereum has developed vigorously, but there have also been adjustments brought about by insufficient performance and side chains. I believe everyone also has many questions. After our simple questions and answers, you can ask more of your questions.
1. Congratulations on the upcoming completion of the London upgrade. Can you briefly introduce the significance of this upgrade to the development of Ethereum?
Tim Beiko：London will bring a few large changes to Ethereum. The most anticipated is EIP-1559, which provides better user exterience and economics for the Ethereum network. Other interesting changes are EIP-3529, which will improve how gas refunds are handled for smart contracts, and EIP-3541, which reserves some specific instructions in the EVM in order to add more functionality in future upgrades.
1.5. You may know that more than ten hours ago, that joke about drunkenness and watering spread in the Chinese community. Although many people are refuting rumors, the EIP-1559 and London upgrade will not be delayed this time, right?
Tim Beiko：Jokes aside, the only reason why we would delay London is security concerns. We had one bug that we found yesterday and fixed today. We will be discussing the best approach for the security of the Ethereum network on the AllCoreDevs call tomorrow.
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If there are any delays to London, they will be shared on blog.ethereum.org
2. We all know that the London upgrade will have a certain impact on the Ethereum mining. Could you please give us a detailed introduction of the impact? Earlier, it was said that EIP-1559 would reduce the income of miners by 10-30%. Is this calculation accurate? Will it drive miners to invest more in MEV?
Tim Beiko：First, EIP-1559 removes part, but not all, of the transaction fees that go to the miners.
In each block, a baseFeePerGas is specified, which is the minimum gas price you need to pay in that transaction to be valid. That amount, times the gas used by a transaction, will get burnt.But, transactions will also specify a priorityFee, which goes to the miner. This fee is like a “tip” and it compensates miners for the increased risk of their blocks being uncled (removed from the canonical chain) when they include transactions. Empty blocks are quicker to propagate on the network than full blocks, so are less “risky”. The priorityFee pays the miner for that risk.
As for MEV, this is paid by users who don’t just want to be included in a block, but want to be included as the _first transaction_ in the block.Because there are valuable arbitrage opportunities (e.g. frontrunning transactions on decentralized exchanges), people are willing to pay a lot to miners to get the first slot in a block.We’ve already seen this grow a lot: right now, about 60% of blocks have MEV transactions, vs. close to 0% at the start of the year.
So 1559 doesn’t directly impact this, but because it lowers miner revenue a bit, some miners are looking to find other revenue sources.
We do not know yet by how much the miner revenue will lower. The best analysis is here: https://insights.deribit.com/market-research/establishing-bounds-for-miner-revenue-in-eip-1559/
Lastly, it is worth noting that many things affect miner profitability: the demand for the network (low vs. high transaction fees), the competition in mining (hashrate), and the Ether price, because miners’ costs are mostly in fiat not ETH.
3. After the London upgrade, the existing Gas Token scheme will become invalid. Does the current developer community have an alternative scheme?
Tim Beiko：Yes, EIP-3529, which is in London, will make gas token schemes invalid. Gas Token shcemes are bad for the network because they fill up the network with “junk data” when gas prices are low, and create big blocks when gas prices are high. This causes instability on the network, and so it was decided to remove it in London. There is no current alternative that I am aware of.
4. Is there a timetable for the merger of ETH 1.0 and 2.0? When will Phase 1 of ETH 2.0 start? It has been said before that POW will stop as early as the end of this year. Is there a new timetable for now?
Hsiao-Wei Wang: > The Eth1<>Eth2 merger and timeline of stoping PoW
You can go check out Trent’s terrific graphic to get the rough timeframe:
