Transaction fees made up the majority of Ethereum mining rewards in September, leading the way for yet another solid month for the GPU dominated industry.
Transaction fees constituted 66% of mining rewards over September, an all time high in percentage terms for the network.
The bounce back in transaction fee revenue is notable given the August adoption of EIP-1559, a technical change to the Ethereum protocol’s block space auction process. The EIP burns the former transaction fee to the network, leaving only a “priority fee” for miners to pick up.
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Transaction fees continue to make up a larger portion of mining revenue for two reasons:
- People are using EIP-1559 “Type 2” transactions and legacy transactions at nearly the same rate, according to Ether Scan.
- NFT mintings and trading increase demand for blockspace, and therefore higher priority fees.
Indeed, NFT marketplace Opensea was the third most called upon Ethereum smart contract over September and one of the most gas intensive, according to Dune Analytics. The platform was narrowly edged out by stablecoin Tether’s (USDT) token contract in second place and ether-to-ether transactions in first place.
When denominated in ether, however, its clear mining revenues are dependent on market conditions continuing on-chain. Surprisingly, miners held onto pre-EIP-1559 revenue levels only due to NFT-mania. If the non-fungible token song-and-dance comes to a close, so does the ethereum miner’s accompaniment.