I haven’t seen an in-depth analysis, but the gist of the implementation would likely be that instead of burning, some number (stored in storage maybe) would be incremented by the base_fee * gas_used. The miner of any given block gets the block_reward + stored_value / 100000 (where the denominator is how many blocks we want to spread over).
I agree with all the comments about deflation. I think long-term deflation is a bad idea. Likely staker rewards in 2.0 need to rise to ensure that deflation doesn’t occur overall. I’m a miner so I’m not going to promote inflation for 1.0 but for 2.0 there definitely needs to either be a set amount of issuance that eth maintains or inflates. Overall deflation is a bad idea. What would likely make the most sense is to eliminate a “set” base fee and instead make all the gas the reward to stakers so that no eth is created or destroyed.
Out of interest (and thinking mainly about PoS since I guess it’s too late to futz with this proposal for PoW) is there any analysis out there to support this?:
> 1. The security needs of the blockchain don’t coorelate with block space demand. Ethereum doesn’t need more security during times when block space demand is high, and thus fees are high (like late 2020). Inversely, it doesn’t need less security in times when block space demand is low (like early 2020).
In other words, has anyone ever tried to model “how much security spending do we need under conditions X”, and looked at how it correlates with fees?
The block reward has the weakness that it can’t be adjusted quickly, and it hasn’t ever been adjusted upwards so it’s not clear we could get that past the community at all, especially under conditions where the security deficit comes from the value of ETH dropping. It doesn’t seem intuitive that the profitability of attacking a chain without a lot of activity and/or valuable assets on it should be the same as the profitability of attacking a chain with a lot of activity and/or valuable assets on it.
Yes, and it is insanely complex and arguably chaotic. Pretty much every model for “how much security do we need” is somewhat arbitrary. It is possible that we are overpaying by many orders of magnitude, or it is possible that we are underpaying by a huge amount and have just gotten “lucky” so far.
With Proof of Stake the calculation becomes significantly easier because the cost of attacking is more constrained. In PoS there aren’t things like CapEx costs for building out an attacker mining farm and then immediately deprecating its value by launching an attack, which is quite hard to calculate the cost of and varies by location in the world.
On Ethereum this problem is particularly hard because we cannot trivially calculate the “value at risk per block”. With something like Bitcoin it is pretty easy to come up with an upper limit on how much value is at risk per block by just looking at the total value moved. On Ethereum, you have to account for someone changing the owner of a contract that holds some funds (value which may be at risk).
Of the theoretic value at risk, you further have to figure out how much is actually at risk, which is only the subset of that is going toward off-chain payments. Any transfers from one person’s account to another of their accounts isn’t value at risk in this context and any contract executions in Ethereum that are entirely within Ethereum (like all of DeFi) are not value at risk. Transfers to/from exchanges are the most obvious targets, but also things like paying for goods and services are at risk.
Finally, of that value at risk it is unlikely that all of it (or even a significant portion of it) is value that an attacker cares about. Alice sending money to an exchange and them crediting Alice puts the exchange at risk in the case of a 51% deep reorg, but only if Alice is the attacker. If Alice is just some user sending money to an exchange then chances are the attack would just result in Alice’s transaction being replayed in a different block, but the exchange would still get its money.
I agree with you @MicahZoltu that a censorship attack is the most likely form of attack to this proposal. Especially if the news are true that ~60% of the miners oppose this proposal it would be feasible for them to veto it from the outset and such an attack would be self-sustaining as you say in your blog post, because defectors would inevitably suffer a direct economic penalty from adopting the upgrade so they would have an individual incentive to join the majority strategy.
It being obvious may not be a deterrent to everybody, in the same way that obviousness isn’t a deterrent for a political party using their parlamentary majority in order to veto a bill. It doesn’t seem like the kind of strategy that requires any sort of secrecy in order to be effective, it could conceivably be carried out in plain sight with a coordination website and github account distributing patches for mining software that block the upgrade…
The number is more like 90% and you are forgetting one important thing. Exchanges WILL not allow an orphan chain (the chain with the lowest hash) to send/recieve transactions. The 1559 chain will die.
Please keep the discussion factual and don’t speculate on the motives of ecosystem participants as a group. Also, an orphan chain is a chain with no hashpower. ETC is not an orphan chain for example.
Currently 90% of the Ethereum mining hashpower is against 1559
This leaves 10% for the 1559 chain and 90% for the chain without it.
Which chain has a higher security risk of being 51% attacked? Hint it is the 10% chain.
Since you like ETC so much, what did exchanges do to their confirmation times when they were 51% attacked?
ETC confirmation times went to two weeks
So now which chain do you think people will use and therby exchanges? The chain with 2 weeks confirmation times?
The only possibility of this not happening is by July if the Defi ASICs that run MEV will have over 51%. In that case the Defi ASICs will control the fate of 1559 and we know which side they will land on since they have funded 1559 with grants. This is why July is so important as GPU supplies should catch up to ASICs by then.
If it works out the way they plan Defi ASICs will have a very small window to ensure 1559 is the dominant chain in July. However one small miss on the launch date by a few months and GPUs will regain the majoirty of hashpower.
But this is speculation that Defi thinks they will have the hashrate by then. Like you said, let’s stick to the facts and right now 1559 will be an orphan chain with 10% hash and WILL get 51% attacked into oblivion.
I agree @CryptoBlockchainTech that the miner community probably have the upper hand here, at least in theory. Lacking a formal governance mechanism as @kladkogex was suggesting (which I agree would have some clear benefits to the greater community), the de facto form of governance we have lies in the individuals securing the network. A vote is cast by using your hashpower in order to support one or the other chain.
Even though that’s the theory, in practice it would require some sort of coordinated action for the miner community to effectively block this proposal, since the individuals trying to implement this are coordinated. At the very least some infrastructure able to reach a critical mass of miners and distribute patched mining software would be necessary for that to happen, and it doesn’t seem like that’s happened yet so it may very well be that the majority of miners adopt the upgrade due to their own isolation or inaction, despite them being opposed to this EIP in principle.
Regarding the conflict between ASIC and GPU miners I’m not sure that it would make that much of a difference in the long run even if ASIC operators suddenly took over the majority of the network’s hashpower, because even ASIC operators would have a strong economic incentive to veto this proposal, so the strategy of trying to push it through by bringing up enough ASICs supporting this EIP doesn’t seem game-theoretically stable because defectors would be able to increase their profits instantly by joining the veto, so there is a good chance that the mining community will have the last word on this regardless of the increasing share of hashpower controlled by ASICs.
While I agree with your first statements, this one I find shortsighted and lacking the understanding who is backing 1559. Do some research and see where grants have been given to companies working in the crypto space and then the projects their people work on. 1559 is a byproduct of the Defi community wanting to normalize gas fees to prevent flash trading bots from exploding gas prices. The secondary mission of burning fees will enable them to capture 99% of the MEV market post 1559 since GPUs will no longer be profitable. Couple MEV flash trading bots and normalized gas prices and you have the wallstreet flash trading boys in crypto. Not saying it is a bad thing, just cutting out small miners and going against the yellow paper that called ASICs a plague is sad to see happen. Surely we don’t have to step on other people in the space to gain traction from big money.
Do some research and see where grants have been given to companies working in the crypto space and then the projects their people work on.
Did that, nothing out of the ordinary there.
1559 is a byproduct of the Defi community wanting to normalize gas fees to prevent flash trading bots from exploding gas prices
Race for position with high tips (and MEV) will continue with EIP-1559, what are you on about?
The secondary mission of burning fees will enable them to capture 99% of the MEV market post 1559 since GPUs will no longer be profitable.
Eh, what? EIP-1559 does not hurt miners anymore than a drop in price does, or sudden scalability improvements.
Couple MEV flash trading bots and normalized gas prices and you have the wallstreet flash trading boys in crypto.
You mean the mining pools here as MEV flash trading bots right? I don’t see how anyone else can guarantee they get included first. I really fail to see how is this related to EIP-1559. This MEV stuff is already happening now, and will still be happening after EIP-1559.
Not saying it is a bad thing, just cutting out small miners and going against the yellow paper that called ASICs a plague is sad to see happen.
As long as small miners are profitable with ~10-20 USD/GH, they will still be around. If they’re not, they will drop out eventually anyway. Again, not related to EIP-1559.
If you want to get rid of ASICs, that’s fine by me. But that discussion is entirely separate from EIP-1559.
Are we using the same gas schedule as EIP2930 for access lists? If this is the case, can the EIP be updated to state that the access list gas cost is the same as in EIP2930, and that this EIP thus also depends upon EIP2930?
EIP-1559 follows the same gas pricing schedule as EIP-2930 (its predecessor). I am convinced we should specify the gas pricing function in this specification somewhere.
So you’re advocating for an exploitation of a vulnerability in PoW / PoWhatever (social layer coordination) to essentially usurp the competitive mining market dynamic so miners (who will always act in the interest of their bottom line) can exert their will on any decision made by the value additive community participants (devs, users, holders) who drive the value creation miners pile in to take a cut of?
Ok let’s start talking about fiduciary responsibility, legal liabilities, etc for a group of now enumerated decision makers. If miners can coordinate to stop proposals that hurt their bottom line, surely they can coordinate to enforce lawful use of their platform, including not including txs and processing blocks that include e.g. txs from embargoed nations, illicit transactions, illicit content and data storage, etc.
Are we sure we want to go down the path of encourage miners to exploit the social layer weakness of PoW?
Or maybe, you know, if they don’t like it, they can do what everyone else does, and leave or fork.
The hate and rage against miner in few posts here is not serving the arguments.
What is happening here is that few people are trying to oppose the miners to the devs/users/holders and to accuse them of only looking at their personnal interests. This vision is totally binary. Most of miners are also users and holders. Most people on the ethereum network want what is the best for it and want it to be successful because this is the common interest.
Is opposing miners to users a solution? It is terrible for me to see that everywhere on the social networks. I never stepped in on any platforms because I never felt the need. This time I noticed that many claimed to be spokespersons for users/holders or miners as if there were two distinct camps. the Defi was supposed to be different from cefi but it seems it is not for some of us.
I am not happy with that because the loser is the network and the trust in it. That means each person which is part of this network (users, devs, holders, miners…).
I really do not feel to be part of one camp or the other. The majority of us is probably in the same situation. I prefer to still think that most people are like me, just expecting a solution to ease the tensions and make the network secured until it goes pos.
This is maybe not the best solution which is proposed here but it deserves a peaceful debate.
Opposing miners and supporting users is a solution; it has been for about six years. It’s known colloquially as Serenity or, more commonly, proof-of-stake. Half the point of ethereum is the idea that miners should be making zero dollars and zero cents per year on Ethereum. It’s in the specification.
I think that miners as guardians of this network have the duty to use their own judgement regarding whether this fork is going to change the network for the better or for the worse. If the development team is trying to push through a change that fails to achieve a broad enough consensus (e.g. because the concerns of a large enough part of the community aren’t being taken into consideration) there is no immorality in the >51% majority of them deciding to stop it. That’s the competitive mining market dynamic at work, only someone telling them what branch of the fork they have to take would be usurping the decentralized decision of the individuals using their own resources to secure this network. In the same way that I’d think that a government requiring them to take a certain fork in order to censor certain transactions would be usurping their autonomy (since you talk about fiduciary and legal responsibility).
I also don’t identify with the false discrepancy between miners and what you call “value additive community participants”. I’m primarily a transaction user and still can’t help feeling skeptical about the theoretical benefits of this proposal: It has been acknowledged by core devs several times in this thread that it’s not going to bring a meaningful reduction in the average transaction prices, which is the real usability problem a large fraction of the user base are suffering from right now.
Same goes for the false discrepancy other people have referred to between miners and PoS validators. Both miners and validators have the same incentive to veto this proposal, and the rest of the community have the same reasons to redirect some of the network surplus value to both of them: In either case their collective reward sets the minimum cost that an adversary needs to overcome in order to attack the chain successfully. That’s why I find it rather unfortunate that people are threatening to react to any attempt of coordinated action by rushing through the PoS upgrade – And you read these lines from a long-time skeptic of PoW (though mostly due to the environmental matter), but I don’t think it does any favors to anyone to have it merged anytime before it’s ready, and when it is it should be merged because it’s ready not as retaliation against a part of the community. In any case, assuming that miners are successful at blocking this proposal, wouldn’t switching to PoS in a rushed manner only increase the attack surface and further sacrifice the security of this network (under the assumption that it was just successfully overruled!) rather than close any vulnerability? What is going to prevent validators from coordinating in the future in exactly the same manner?