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Eric Conner @econoar
, 9 tweets, 5 min read Read on Twitter
1/ After last weeks Ethereum Core Dev Call on issuance, I wanted to post a tweet thread follow up to my blog. I've pulled updated data, laid out my argument again, and compared the 3 EIPs below. I still strongly stand behind EIP-1234 and am very against EIP-1295.
2/ First let's revisit my post. I theorize that since network participants are paying for network security, you can create a baseline against another chain to analyze if you are overpaying or underpaying versus said chain. For my Ethereum comparison I take Bitcoin.
3/ Taking a quick look at the ETH:BTC market cap ratio vs. ETH:BTC daily miner incentive ratio (blocks+uncles+fees), we see that Ethereum has historically overpaid when compared to Bitcoin. We can also compare those ratios directly to see the current overpayment range is 1.5x-2x.
4/ This isn't a shock given ETH's high inflation rate of ~7.5%. Due to delays in Proof of Stake, this has pushed Ethereum's total supply well over 100,000,000 and needs to be addressed immediately.

Fun fact! In the past 365 days, the Ethereum network has paid $6.6bn to miners.
4/ If we consider EIP-1234 and the reduction to 2 ETH, we see that these ratios start to come in line nicely. Also, here is the projected supply/inflation graph until 2020 showing Ethereum inflation moving down to ~4.5%.
5/ Let's quickly see what these graphs look like for the other EIPs. Here is EIP-858 which reduces block reward to 1 ETH. We see that at current price, Ethereum starts to underpay when compared to Bitcoin. This is potentially still fine but to me, not a risk worth taking.
6/ And now EIP-1295, proposed by @BrianVenturo, which has no reduction to block reward but a reduction in uncle rewards from 2.27 to 0.5675. To be honest, I see very little benefit in this proposal. It barely impacts inflation and messes with the Block/Uncle ratio unnecessarily.
7/ The argument against a block reduction has been that miners will leave and the network won't be secure. Well, these same arguments happened last year and since block rewards were reduced from 5 to 3, price is the same, yet hash rate is ~3x higher.
8/ It's essential that Ethereum curb inflation rates immediately. I believe I've laid out a sound argument using data to show that a reduction from 3 to 2 is safe and warranted via EIP-1234.
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