It’s clear current and prospective investors like the idea of a deflationary eth. Basic economics of supply and demand, along with watching Bitcoins emission schedule, halvings have resulted in exponential growth. We could have one heck of a good debate if that is a current short term good thing for Eth or not, ahead of any proper scaling. A 3-5k Eth price is great for everyone that hodl eth and mines it for sure, but is down right asinine for users or prospective users UNTIL the L2/Sharding can help solve the fees. Usage decreases, scrutiny hits all time high that it’s effectively became too expensive to do anything unless your spending big money on transactions. This is a completely different argument, not for this EIP, but addressing the statement that the inflation rate would ‘destroy’ ETH’s blossoming “SoV” narrative (it has NO upper bound, wth are you even talking about)
With regards to EIP and why the suggestion of a potential increase and decay. The basic analysis that has been completed show’s 10 different scenerios, specific to three key inputs.
-
Total potential hashrate - This is established by looking at known/known existing Eth Hashpower on network now, roughly 410 TH of output. + sum total of other GPU enabled Networks, calculating additional potential of Hashpower, which last calculation was roughly additional 110 TH of potential. The current growth curve, due to Eth’s price/yield still is higher than most folks break even, thus more hashrate continues to increase near the point of equilibrium on the average ops cost to mine/operate.
-
Ethereum Price
-
Yield produced /v MH - (Currently Block Reward + Fee/‘MEV’ + Orphan Inclusion)
My concern I raised at the ECH, that was refuted with ‘MEV, MEV, MEV’ declarations that when/if properly configured at the mining pool, they could extract a majority of the (fee) thus resulting in a much less potential ‘loss’ with the Basefee Burn. That very well maybe the case, not refuting that, I think the data you have provided along with reading into the flashbots discord has provided ample evidence this claim maybe in fact true. It’s on the mining pools now to configure and ensure their miner clients are able to participate in the yield.
The great risk though rest in the shear size the network has grown (Natural effect of PoW + traditional incentive model, working as intended) and will continue to grow ahead of the July London Hardfork. What is being missed is the fact much of this growth comes in the form of new participants, continued social media fervor (Linus Tech Tips yesterday, 13.1m sub channel showed his audience how to use NiceHash Quick Launcher, which focuses on Eth Mining Only) which puts additional pressure factors of risk, bringing up the 'nice hashable attack amount" mixed with potential immediate yield hit on Eth, which we both agree could be LOW if conditions are right (high price, medium sized MEV); risk is next to nil in that regard. My concern stims specifically around a overall change in the environment where we could have rapid price decrease for whatever reason, atop the yield decrease, atop other chains being able to take from Eth’s PoW dominance. The world is bigger than just Ethereum in the PoW space and other coins have gained some ground on taking hashrate away from Ethereum. This coupled with those other rapid decrease potential, no matter how small a percentage does not get around to the fact the Ethash Algorithm is not 51% protected and that Algo has been attacked on multiple other networks successfully.
The entire point is centered around protecting Eth’s network full stop. If a tapered emission schedule is ‘not worth it to’ the community, as ironically greedy as that sounds, then Eth should seriously consider a 51% attack solution other than the incentive to mine that wins by shear force. Implement what ETC had to do with MESS, Gravity Well or some other form of 51% attack protection against Ethash. That serves no emission and protects against the threat we are concerned against.
Lastly I am updating the models that again show a range of theoretical attacks given specific scenarios, but I will reiterate there is nothing theoretical about the ethash currency being susceptible to a 51% attack, because it has, multiple times. I am arguing the climate, scale and incentive has changed and eth is no longer as protected as it once was. I hope I am greatly wrong and have no problem accepting the fact if nothing happens when nothing is done about it, I was lucky incorrect as we all have a lot to lose if nothing is done and I end up being unfortunately, for whatever left field (series of events that lead to 51%) turns out to be correct.
Protect the network at all cost, through PoS transition. Max Security, not “max my pocket book at the risk of the network”
more on this EIP, I think that it should actually be split up into two separate EIPs. One EIP to increase the block reward to 3 and have it decay back to 2 over some period of time, and a separate EIP to have the reward decay from 2 down to 1 over a separate period of time.