Ethermine, which happens to be one of the world’s largest Ethereum mining pools, has unveiled the ‘Maximal Extracted Value’ [MEV] software strategy. The introduction of this software’s beta program is intended to compensate for the upcoming mining reward reduction caused by the adoption of EIP-1559.
It essentially means that 80% of the MEV revenue will be distributed alongside the mining block rewards. According to the official announcement by Bitfly, the operator behind the Ethereum mining pool, 5% will be directed to supporting the ecosystem via Gitcoin grants, and the remaining amount will be utilized for further development of the MEV strategies.
The platform revealed that there could be an increase of 1-10% in mining rewards.
Activation of the contentious EIP 1559 aimed to combat the age-old debate of Ethereum’s high Gas fees. This proposal aims to introduce ETH burning, which, in turn, enhances stability and alleviate economic inefficiencies in terms of mining. It was first fronted by Eric Conner, who happens to be the co-founder of EthHub.
EIP 1559 is touted as the one of most significant and controversial alterations to the Ethereum blockchain.
While commenting on the proposal, Bitfly stated,
“We opposed EIP-1559 because of security concerns. These concerns could get mitigated by adopting EIP-3368. Independent of the outcome (EIP-1559 & EIP-3368) we’ll never endorse nor pariticipate in any kind of hostilities by miners against the network.”
Why Is Ethereum Mining Industry’s Discontent With The Proposal?
Generally, for a transaction to be included in a block, an Ethereum user sends a gas fee to a miner. However, with this proposa, the gas fee will now be sent to the network itself. This can be represented as a kind of “burn” called basefee with only an optional tip paid to ETH miners. Since the burnt fee is set algorithmically, this enables the users on the network to pay a fair fee.
But this did not sit well with application creators and users of the network because of the current difficulty of picking a correct transaction fee. In fact, several miners and mining pools have openly opposed the EIP 1559 due to fears of revenue loss with fee burnings.
In a bid to compensate miners who are certain to face huge revenue declines, miners as well as developers have turned to MEV as a quick replacement. With this implementation, miners can now benefit their position as “arbiters” in how blocks are packed to “front-run” profit-making trades.
Earlier, Flexpool had announced taking MEV integration out of Beta testing and launching out across all regions.