Reduce Block Reward to 2.7 ETH

[salanki]

eip: TBD
title: Delay Difficulty Bomb and Reduce Block Reward to 2.7
author: Peter Salanki (@salanki)
discussions-to: https://github.com/ethereum/EIPs/pull/1362
status: Draft
type: Standards Track
category: Core
created: 2018-08-29

Simple Summary

Reduce Block Reward to 2.7 ETH and reset difficulty bomb.

Rationale

This EIP provides a reduction to ETH issuance without impacting the current Uncle Reward structure. It reduces the risk of centralization to the mining network that could occur if Uncle Rewards are lowered. This EIP proposes 2.7 ETH per Block as the base reward recognizing the current economic costs to secure the network, and we believe is a good compromise of reducing issuance while maintaining network security.

In 2017 an issuance reduction occurred gradually over several months while the difficulty bomb was activating. The issuance reduction introduced in Metropolis did have a net positive effect on actual issuance at the time of the fork due to the bomb diffuse. A large overnight reduction has never been implemented before making it impossible to statistically quantify the risks of EIP-858 and EIP-1234. By taking a gradual approach to issuance reduction the effects of such reduction can be measured and provide data for a future monetary policy without risking security of the network. We expect this EIP to be followed by additional reward reduction EIPs in future hardforks when safety of doing so has been quantified.

[mstobie-seequent]

Bitcoin has halved its issuance instantaneously several times so the information in this EIP is false. 10% reduction in issuance is a joke when eth is inflatiting 2.65 times faster than BTC.

[salanki]

Thank you for reading the EIP @mstobie-seequent. The EIP discusses Ethereum monetary policy. Ethereum is vastly different from Bitcoin in many aspects and one cannot simply apply parallels from Bitcoin without caveats. Notable differences relevant to this context are:

• Bitcoins issuance plan was set from day one. Nothing changed instantaneously in the sense that it couldn't be anticipated and calculated years in advance. If Ethereum had adopted the same approach we would not have been having this discussion.
• Bitcoin mining is a different landscape than Ethereum mining
• Bitcoin is a store of value platform vs Ethereum that is a DApp platform.

I am not saying that there is a guarantee that things will be different than with Bitcoin, but the projects are different enough that one can't be used as a blueprint for another.

I do not have an answer for what is the right price to pay for security. It is a very hard question. The reason I'm not jumping on the "let's just do what Bitcoin is doing right now" bandwagon is the same reasons I listed above; the projects are vastly different and in one big swoop making a major adjustment to mimic Bitcoin could have negative consequences. A phased approach will get us there in due time, with minimal risk.

[axic]

Should this be merged and or just closed since EIP-1234 apparently sets it to 2 ETH (and is part of Constantinople)?

[axic]

@salanki what do you think about the above question?

[salanki]

No need to merge. Since the decision is made.