8.2 C
New York
Sunday, June 13, 2021
HomeCryptoCurrencyEthereum miners hit millionaire incentive cap in May

Ethereum miners hit millionaire incentive cap in May

The income that the miners of the Ethereum network obtained in May for incorporating computing power and processing transactions, reached a historical high. In the month just ended, participants captured more than $ 2.35 billion in incentives, including $ 1 billion from commission charges.

The capital figure coincided with a maximum price for ether ( ETH) of $ 4,356 per unit registered on May 12, according to CoinGecko. However, this large flow of funds began to decrease during the last week and already registers levels not seen since January of this year , according to metrics from Bitinfocharts and CoinMetrics.

For months the rise of decentralized finance (DeFi) and the commotion generated by non-fungible tokens (NFT), kept the network congested. This situation resulted in higher costs when processing simple or more complex transactions related to smart contracts.

After hitting new caps in May, incentives fell to January levels over the past week. Source: CoinMetrics.

The decrease in commissions and incentives denominated in dollars coincide with the collapse that the market experienced after May 19. However, the fluctuations are also reflected in the amount of ETH used . For example, that day the miners got incentives for more than 44,000 ethers, but by May 26 the rewards did not reach 18,000 ETH.

Ethereum miners with less income

The reduction in income for Ethereum miners could become permanent with the potential activation in July of the EIP-1559 upgrade. The incorporation of the proposal, in the next London update, would make the network a less expensive platform for users and would reduce profitability for miners, something that has generated rejection.

EIP-1559 establishes a base rate to include transactions in blocks, while users contribute tips to incentivize miners. Subsequently, the base commission is burned, which would reduce supply inflation, as reported by CriptoNoticias.

The potential deployment of the EIP recently suffered a setback after a group of developers detected a vulnerability only 45 days after activation. According to programmer Tim Beiko, the flaw allowed any attacker to create large transactions arbitrarily . However, the problem would have already been solved.

Either due to current market conditions in which commissions have dropped, due to the use of the smart contract network or due to the implementation of the referred to as EIP, the days of millionaire profits for Ethereum miners could be coming to an end. However, according to a report by CoinMetrics, the activation of the EIP may not work as expected.

Follow World Weekly News on

Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

Leave a Reply

Must Read