Ethereum miners currently rake in money partially thanks to rising network fees. So much even that over 53% of miner revenue is from transaction costs alone. Ethereum remains one of the most expensive networks to use today, an issue that needs to be addressed.
Miner Revenue From Fees Is Rising
Most public blockchains have some transaction mechanism that pays miners – or stakers – for including transactions in the next network block. The miner revenue from fees is an additional bonus in an ideal world, rather than the main reward. For Ethereum miners, that is currently not the case. Nor may it be the case for a while to come, creating an odd scenario.
As the chart below confirms, Ethereum miner revenue primarily consists of network fees. With 53.893% of all revenue coming from this angle, it outweighs the regular mining rewards. Finding a status quo between the two aspects would be a good start, yet these high fees may not go away just yet.
It is not the first time this situation occurs. The skewed balance of power was even more outspoken in September of 2020. Over 60% of miner revenue came from network fees when DeFi saw exponential growth. Today, that growth curve is flattening a bit but remains ever-present and influential. As such, it also remains a catalyst for the exponential network costs.
For miners, this extra revenue is a godsend. Being able to double one’s regular earnings thanks to high network fees is a healthy bonus for those helping to secure the network. As Ethereum 2.0 will eventually move away from mining altogether, miners need to squeeze out every bit of revenue while they still can.
The End Isn’t In Sight
Judging by the chart below, it becomes painfully evident that Ethereum fees may keep rising for some time to come. The current growth curve is rather steep. Nearly 700 ETH is paid in fees per hour, all of which help increase miner revenue for enthusiasts. This level has not been seen since early October 2020.
Figuring out why the fees are rising again is a complicated matter. Less than two months ago, the hourly miner revenue from transaction costs was below 200 ETH. Seeing this figure increase by 350% in a few weeks is worrisome for many different reasons. It also confirms this trend may prove challenging to revere until sharding goes into effect.
What all of this means for the future of Ethereum remains unclear. A massive network upgrade is in development, but there’s no official timeline for its release. If the miner revenue from fees remains this high until Ethereum 2,0 activates, there will be a lot of dismay among users and service providers.