I am surprised to see this, especially this large of a % cut. This is a pretty big shock to GPU miners who expected a slow roll down of block rewards over a multiple year period. I have been mining since the genesis block and this will be the third and largest overnight hit to block rewards we would have experienced since launch. It is correct, there is precedent for reducing the block reward, but it has never been 75% cut. GPU miners also just took a big hit with ProgPoW being blocked by other community groups, so I feel this EIP must be contextualized from a miners’ perspective. I must admit, it feels really bad to be treated as a necessary evil to be paid out the minimum possible to incentivize us to keep our lights on just long enough to make the transition to 2.0 work.
With that all being said, I really would like to understand why we are aiming to match the inflation rate of Bitcoin, which is much older than Ethereum, at a different stage in its development, and is trying to achieve different goals than Ethereum. It makes sense that Ethereum would have a higher inflation rate at this point in its history; it is 5 years younger than Bitcoin. I believe blockstream just made fun of Ethereum because we keep changing our inflation rate.
Furthermore, this is feels like simply a shift of revenue from miners to protect the wealth already created by the system. The miners have grown, supported, and built businesses around this network for the past 5 years. Most mining companies barely made it through this crypto winter, and this EIP strips away the incentive we had for powering through stripped away at the first sign of recovery. We worked through the valley because we believed in the project, and we thought there were better days ahead. This EIP puts walls up around the Ethereum garden. We should still be at the phase where we are encouraging new users to participate in any fashion.
The note on the block reward through transaction fees is already wrong by .5 Ether, just one short day after this was published. The current block reward is only comprised of 1.3 ETH worth of tx fees, so we can’t assume transaction fees can consistently make up lost revenue from such a large reduction in inflation, and to make changes based on this assumption is reckless.
I believe it makes far more sense to change PoW rewards (commensurate with past precedent) after PoS is live, as it makes sense to ensure the house we’re moving into is sturdy before dismantling the old one.