We wont use Ethermine Polygon Payouts

At D12S Ventures we run a small 612 MH/s Ethererum mining operation. With the rollout of EIP-1559 on 4th August 2021 Ethermine changed the payout policies for miners, where the miner has to pay the payout transaction fees. Ethermine argues that they won’t be able to cover these costs and therefore need to pass them on.

I don’t like this change, but it it necessary. Also, I support the EIP-1559 that made the payout policy change necessary in the first place. Ultimately, the Ethereum Platform will be better through it.

The change of the payout policy also brought the possibility to use Level 2 Polygon (formerly Matic) for payouts. Let’s see why we wont use them for now.

For context, find our mining strategy below:

• We operate two miners, totalling 612 MH/s
• Payouts happen every 0.1 ETH mined
• Every 14 days we liquidate half of the mined ETH in the past 14 days to Euro.
• The remaining mined ETH is kept until a preset price-threshold is reached, where we will again cash out half of the ETH.
• We will keep holding some portion of ETH indefinitely.

Let us walk through the different payout options.

Ethermine Payouts before EIP-1559

Before EIP-1559 and the payout policy change we received all payouts using a 0.00002 ETH transaction fee. This is insanely low. So low in fact that it only makes 0.02% of the transaction value.

Cashing out to Euro involved a transaction to Coinbase Pro, the trading fees and a fiat wire fee (SEPA transfer). In total this did cost about 0.0005 - 0.003 ETH and dependent on the current ETH-EUR exchange rate 1.00 - 3.53€.

Ethermine Payouts via Polygon

To test drive Polygon we used Polygon payouts for one week. This is the first time for us to try the Polygon network and it seems great. Low fees in the price region where MetaMask shows 0.00€ for a transaction. Nice! Also, wallet integration and swapping is easy.

BUT, remember the strategy above where we liquidate half of the profits every two weeks to Euro? How would we do this with Polygon? Search an Exchange that supports the Polygon Network. For us that’s Binance. Binance supports Polygon Network transfers for MATIC, so we swap our ETH to MATIC. Now trading the MATIC-EUR pair, we get the fiat needed for electricity, salaries etc. But getting these Euros to a bank account is only possible via Credit Card and a 1% withdrawal fee. That does not seem like a great deal…

We wont use Polygon (for Ethermine Payouts, probably never)

Right now Polygon payouts are more tedious for us than Mainnet payouts. We have to do an additional token swap and face a fiat payout fee. This brings the total cost of the payouts to the same level as the ones based on the Mainnet.

Also, we would be holding ETH on Polygon and not on the Mainnet. Considering that the transfer to the Mainnet requires a lot of Gas - as it is a smart contract transaction - and takes 7 days, I don’t now, if we every going to switch to Polygon.