EIP-3368 - Block Reward Increase /w Decay for next two years

EIPs
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What is the standing charter of Ethereum was founded on? Minimum viable issuance
What are the Security concerns of the Network protocol? 51% attack.
What would be user experience concerns of the platform? Hard to move ETH (transaction/gas fees), UX
What is the market story effects for
Defi: Hard to Move Money.
Miners: Security/Participation on the network, Increase/Drop in block reward / gas fees / Difficulty (shock) vs (gradual)
Asic/GPU providers: Hardware shortage, secondary markets 2x-4x above MSRP, New Nanometer release every 2-4 years.
Etherum POS: Timeline
Participants on the network: Increased demand in participation.

My two cents
Summarizing here to get conversation flowing I believe as long main charter and security concerns are are addressed. Would be helpful to perform a gradual change so participates can adjust their models over time, increase demand in participation, Users are able to move ETH more Fluidly, Network remains secure and no risk to 51% attack.

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Hello from Portugal,
Miner here i would like to sugest this if its doable.
EIP3368 asks for 1 ether BR increase what if this +1 would be paid when POS hits?
So we would have 1559 and IF 3368 activates +1 start counting under the conditions @bitsbetrippin said and this would only be paid when POS goes live.
The miners that unplug from ether would lose this bonus , this would have commitment from miners till POS.
This would be seen has a bonus has a handshake part ways in good faith from everyone.
IF conditions not meet for 3368 activate and 6-12 months from now POS goes live no increase cost for security.
Is this reasonable enough for everyone?
Sorry for my bad English
Best regards,
Anselmo

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How about addressing the actual issue. High fees for users. I am a miner as well as a user. Been here since the nethash was 6 th. When the issuance is down to 1 eth, how much are transactions going to cost then. ? do projection on that.
Why is there no proposal that actual lower fees ? Thatā€™s a serious question. instead of burn just donā€™t charge the user high fees ?
I understand. Devs have a interest in their holding and miners in their hardware. WHAT ABOUT THE USER. The user should come before all else. YOU HAVE ALL LOST FOCUS ON WHY CYPTO WAS NEEDED IN THE FIRST PLACE. Let your greed cloud your judgement.

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I think there are layer two solutions such as Optimism that are supposed to do that that will be rolling out even before EIP1559. Iā€™m quite new to this so just trying to learn as I go

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Avg Block reward is currently 4ETH, 3ETH is still a 25% immediate cut, with a tapering cut after that down to 1. Oh yeah, its totally a subsidy of miners to drop their rewards 25% immediately, and 75% over time. /s lol

EIP1559 with 100% burn would be a nearly 50% immediate drop in revenues

There are less security issues with a 25% immediate cut, and a gradual drop off beyond that, than there are with a 50% immediate cut.

Namely, the ability to watch and respond to see if their hardware is actually absorbed by the market! Only the naive would believe that miners will sell their cards while gpu resale prices are dropping. They will hold them once they see resale prices drop. Then, you have a significant portion of gpu hash offline/on nicehashā€¦ (ASIC centralization threat, gpu attack threat)

EIP1559 is a 40-50% Drop in revenues, on top of a possible 50% difficulty rise between now and then,
I doubt eth has any chance of remaining the most profitable after this. Even EIP1559 alone would drop revenues enough that some hashrate would begin switching out to other coins and nicehash, and that ignores the difficulty rise, which will only increase as ASICs proliferate between now and then.

ā€œno such thing as risk free businessā€ Miners are well aware of this, when their Ethereum opportunity ends, (when a gpu becomes unprofitable to mine with), they are either sold, used for attack, or their other purposes.

The users seem to not realize that their business isnt risk free eitherā€¦ decentralized mining and eth remaining #1 in profitability reduces the users risk from an attack on the network they use substantially, if eth is no longer #1 profitable for miners, users will learn quickly why they need to beā€¦

Difficulty rise alone through July threatens to make a significant portion of GPU hashrate unprofitable, couple in EIP1559, and you have an existential threat to GPU miners on your network. If you want to keep a majority of hash in GPUā€™s, and you want EIP1559, 3368 is a good start along with 969, but 3368 still doesnt remove the risk, merely reduces the risks created by 1559 by about half. (25% drop vs 50%)

I urge you to reconsider if you want any significant % of your hash to be GPUs. If your fine with ASICs controlling 51% By august, by all means, stay the course and do 1559 without any compromises.

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As a long time Ethereum investor, I hope this proposal, or one like it, will mitigate the unfounded risks being proposed by EIP-1559 and the recently proposed ā€œbreak the glassā€ proposals. This recklessness with our network security is unprecedented. PoS has taken years because we have decided we need to make this transition in a SAFE manner. Now, if we cannot get proposals in place without alienating the people providing our security, we are going to forego this and ā€œdamn the torpedoes, full speed aheadā€? This is nonsense.

I appreciate the increase in value 1559 is likely to bring to my balance in the short-term, but that will not be realized if the security of the network is sacrificed.

ā€œOur governance is inherently social, people who are more connected in the community have more power, a kind of soft power.ā€ -Vlad Zamfir, Ethereum core developer

I am hopeful of the promise of PoS, but as of today, our network runs on top of the miners. You literally do not get any more ā€œconnectedā€ to it. Stop proposing sudden changes that threaten the networkā€™s security.

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Hmm, from the whitepaper:

" Otherwise, refund the fees for all remaining gas to the sender, and send the fees paid for gas consumed to the miner."

Do you have a reference for Ethereumā€™s philosophy that predates the whitepaper?

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Took the post down. Intentions was not to create heat or hostility. Iā€™m in the wrong place.

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How is it speculation? EIP 1559 will immediately drop revenues 50% (Current Rewards near 4ETH with both BR and fees) and difficulty rise by then will likely be another 50% hit to revenues at least due to the ASIC proliferation. Without action to stop the ASICs and keep GPUā€™s profitable, unprofitable GPUā€™s will turn offā€¦

Not a hit to profits, a hit to revenues as whole, twice overā€¦ both large hitsā€¦

By August many gpuā€™s will unprofitable just due to difficulty rise alone, say nothing about EIP1559. (with no change)
ā€™
The consequences are known and calculable, no need to wait till after the harm occurs, and those calculations show most GPUā€™s negative with power costs by July-Augustā€¦

Miners can organize on nicehash faster than devs can release a hardfork/mergeā€¦ Why would they? Simple. Nicehash offers +1 over ethā€¦ If eth isnt profitable enough anymoreā€¦ and they cant even break even on power, why would they keep mining normally and losing money?

Worse, difficulty rise will occur until EIP1559, then EIP1559 will implement another 30-50% drop immediately, in a single block

no time to ā€œsee what happensā€ if the harm gets done in a single block hardfork, if a good chunk of GPUā€™s get made unprofitable by EIP1559, theyā€™ll switch immediately to something paying more, like nicehash, who offers +1.

So, hardly speculation, the risk is there.

Thats not even saying anything about the ASIC centralization threat i posted about, even if the GPUs go peacefully and dont attack, do you want them to given it leaves you with a majority ASIC chain by August?

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EIP-1559 is not designed to reduce fees, nor is there any concrete reason to expect that it will.

There is a global silicon shortage that is causing the gpu supply to be limited, also work from home and gaming exploded in 2020 which increased the demand. I get that you are frustrated, but scapegoating the miners isnā€™t correct or helpful.

oh I see, you are just in this because number-go-up, you donā€™t really care about the underlying health or functions of the network.

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While I was pretty against EIP 3143, Iā€™m fine with this one.
I donā€™t know if there is time for it, but Iā€™d love to see a 100 blocks range variable decay (min-max) bounded to MEV fees rather than a pure constant.

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If the authors of this EIP was sincere about their concerns about the potential decrease of security of the network the EIP would be more in line with 1559 itself so that a short transition period (100 days - 576000 blocks) will be modeled such as: (after EIP1559 lands)
Block 0 : %100 of the fees goes to the miners
Block 288000: %50 of the fees goes to miners, %50 burned
Block 576000: %100 of fees burned

100 days is arbitrary, I think could be even as low as 30 days.

This way all the concerns of the original EIP will be addressed. I still think and hope that EIP-1559 will go as it is. Iā€™m also very happy to see that this whole debate brought us closer to POS as I believe environmental impact of the network should be priority #1.

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I am a miner and ethereum user. I appreciate the idea as a miner but I think this is not a good solution to increase the miners incomes like this. I would rather prefer to keep EIP 1559 as it is without a single change and to avoid the asics or any specific hardware to mine. The only risk with EIP 1559 is to get too many small miners going to other cryptos due to the reduced profitability of ETH and getting them replaced by ASICS which are owned mostly by companies in China which will have the negative effect to centralize the hashrate. This could be a problem when moving to pos and merging eth 1 to eth 2. An EIP 3372 is being proposed for that and it is i think a better solution as it wonā€™t go against the deflationnist strategy.

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Eip 1559 was original proposed without fee burn. That had support and would have significantly lowered fees. The eip has changed to burn fees. So it does not accomplish it original goal. There is no other reason to burn fees instead of lowering them except the devs artificially inflating the price. That as I stated earlier benefit the devs with large holding.
Now the devs are just being disingenuous stating they could speed up eth 2.0. If eth 2 was ready it would be implemented.
An eip to eliminate mev is already proposed.
Anyone who is in support of 1559 has not done their research.

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ā€œoh I see, you are just in this because number-go-up, you donā€™t really care about the underlying health or functions of the network.ā€

I shared my opinion.
I care more about Ethereum and the network that You might imagine.
So no I am not in here just here because the numbers go up.
I deleted the post.
I wrote an opinion if it creates hostility like this, it means I am in the wrong place. lol

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20% lower a month ago because the network grew 20% with new miners coming online. it was not a drop in hash 20%.

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1559 does not reduce the gas fee you currently pay for any transactions. it only makes the fees more predictable. fees are based on network congestion. if the network is less due to less miners securing the network and there is still the volume currently from DeFi and such your fees will likely rise

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the focus for end user was never thereā€¦ millions in pre-mine to devs and investors has been and is now the entire focus

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I am in favor of this EIP or something similar being included with EIP 1559 (assuming there are no technical issuesā€¦ Unlike Ameen, I am not a core dev)

There seems to be a lot of good ideas in this thread about other mitigations that could be included, i hope there can be a simple fix to address this issue:

Current average block reward to miners is ~ 4ETH, and who knows it might even go up from here. After EIP 1559, miners will get 2 ETH. A sudden ~50% drop in mining rewards sounds like an unnecessary risk.

A sudden change in this complex network can have many unintended consequences. One potential consequence in suddenly dropping the mining rewards is mentioned hereā€¦ but there are likely others that we are not predicting.

There has never been a drop in mining rewards this large. the first reduction was 40%, from 5 ETH to 3 ETH, then 2 years ago there was a drop in mining rewards of 33% 3 ETH to 2 ETHā€¦ there have been no issuesā€¦ but also this is a ~50% drop and there was a lot less at stake in the past and there was a less of a complex network of hashrate markets.

Why take such a risk?

I donā€™t want to pretend to be an expert on either side, but there has got to be a way to include EIP 1559 while also reducing the miner rewards in a more gradual way than just a 50% drop and we hope nothing goes wrong. This seems like a solid simple solution.

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Emotions are running high regarding 1559 and it does come out in peoplesā€™ responses. It can seem personal when the person posting says ā€œyouā€ when question a statement you made. Anywayā€¦

Regarding your comment about if the the price doesnā€™t go up, you will reconsider, there are still scenarios where the network would be in jeopardy even if the price goes up. BBT has these examples in the model he has created.

Also, the EIP is a technical proposal. BBT has publicly stated that his proposal is only needed under certain conditions. If those conditions arenā€™t met, then there is no need to implement. Not being a developer, I donā€™t know when the final decision for inclusion would need to take place. Given what has happened with EIP 2315, it seems the deadline would be about a month prior to the fork.

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