Proposal to increase block rewards to 5 ETH #3143
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This EIP proposes a block reward increase to the original block reward of 5 ETH when Ethereum first started.
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| eip: 3143 |
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| title: Increase block rewards to 5 ETH | ||
| author: Ben Tinner (@Terra854) | ||
| discussions-to: https://www.reddit.com/r/ethereum/comments/k4252u/thoughts_about_increasing_block_rewards_till_we/ |
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Please use a forum like http://ethereum-magicians.com instead of Reddit. It is a more suitable long-term destination for discussion (see #2967).
| discussions-to: https://www.reddit.com/r/ethereum/comments/k4252u/thoughts_about_increasing_block_rewards_till_we/ | ||
| status: Draft | ||
| type: Standards Track | ||
| category Core |
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| category Core | |
| category: Core |
| Currently, the transaction fees (tx fees) portion of the mining rewards makes up a significant portion of the total rewards per block, at times almost exceeded the block reward of 2 ETH. This have resulted in situations where at times of low tx fees, POW miners decide to point their rigs away from ETH as they will always prefer to mine coins that are the most profitable at any point in time, reducing the security of the ETH network till transaction activity picks up again. By increasing the block rewards, the voliatility will be reduced in terms of the percentage of tx fees that make up the mining rewards per block while increasing the total rewards per block, making it more financially attractive to POW miners to mine ETH barring any gigantic ETH price drops. The increase in block rewards will also allow smaller POW miners ample opporturnity to build up their stores of ETH so that when the time comes to fully transition to ETH 2.0, they may be more willing to become validators as they already have earned the requite amount of ETH needed to do so as opposed to having to spend tens of thousands of dollars to purchase the required ETH directly, increasing the number of validators in the network and therefore strengthening network security. | ||
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| ## Specification | ||
| All we need to do is to modify the parameters that define the block reward inside the source code |
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Please use this section to clearly specify what changes should occur in the protocol. I recommend reviewing some other core EIPs to get an idea of formatting: https://eips.ethereum.org/core
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In particular, I recommend looking at past EIPs that have changed the block reward.
| The ultimate end goal for this EIP is to give POW miners more incentive to switch to POS once ETH 2.0 is fully implemented since the transition will take a few years to complete and during that time, they will be incentivised to hold on to the tokens instead of selling it straightaway in order to prepare to be a validator for ETH 2.0, reducing the selling pressure on ETH and increasing it's value in the long run. A side effect of miners staying on Ethereum is that network security will be assured during the transition period. | ||
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| ## Backwards Compatibility | ||
| This EIP is not forward compatible as there will be changes to the block, uncle and nephew reward structure. Therefore, it should be included in a scheduled hardfork at a certain block number. |
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I think you mean backwards compatible? Also, these sorts of things are implied by changes to the core protocol.
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Well, I checked the EIPs that involved adjusting the block rewards (specifically EIP-649 and EIP-1234) and they used the 'forward compatible' language to describe this.
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Bleh. I don't know why those EIPs say what they do, but you are right that what you have matches them. For now I would say just delete it and say something like:
| This EIP is not forward compatible as there will be changes to the block, uncle and nephew reward structure. Therefore, it should be included in a scheduled hardfork at a certain block number. | |
| There are no known backward compatibility issues with the introduction of this EIP. |
Maybe one day we can fix 649 and 1234...
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| ## Simple Summary | ||
| This EIP will increase the block reward paid to proof-of-work (POW) miners, giving them more opporturnities to acquire the minimum number of ETH needed to run a standalone proof-of-stake (POS) validator node before full implementation of ETH 2.0 |
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| This EIP will increase the block reward paid to proof-of-work (POW) miners, giving them more opporturnities to acquire the minimum number of ETH needed to run a standalone proof-of-stake (POS) validator node before full implementation of ETH 2.0 | |
| Changes the block reward paid to proof-of-work (POW) miners to 5 ETH. |
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Simple summary should just state in very few words what this EIP does. It should not include motivation or reasoning.
| This EIP will increase the block reward paid to proof-of-work (POW) miners, giving them more opporturnities to acquire the minimum number of ETH needed to run a standalone proof-of-stake (POS) validator node before full implementation of ETH 2.0 | ||
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| ## Abstract | ||
| By increasing the block rewards back to the original 5 ETH when the network first started, it will convince POW miners to stay on mining Ethereum without worrying too much on profitability. It will also give smaller POW miners more opporturnities to be able to acquire the minimum amount of ETH needed to become a POS validator before we transition fully to ETH 2.0 |
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This should be moved to the Motivation section. The Abstract should be a short, human readable, version of the specification. The Motivation section is where you want to talk about why this EIP is a good idea.
| All we need to do is to modify the parameters that define the block reward inside the source code | ||
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| ## Rationale | ||
| The ultimate end goal for this EIP is to give POW miners more incentive to switch to POS once ETH 2.0 is fully implemented since the transition will take a few years to complete and during that time, they will be incentivised to hold on to the tokens instead of selling it straightaway in order to prepare to be a validator for ETH 2.0, reducing the selling pressure on ETH and increasing it's value in the long run. A side effect of miners staying on Ethereum is that network security will be assured during the transition period. |
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The rationale section should describe why certain values were chosen. For this EIP, this would be a good place to mention why 5 ETH was chosen instead of 4 ETH or 6 ETH (or any other value). The content currently in here is more appropriate for the Motivation section.
| This EIP is not forward compatible as there will be changes to the block, uncle and nephew reward structure. Therefore, it should be included in a scheduled hardfork at a certain block number. | ||
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| ## Security Considerations | ||
| There will be short term economic drawbacks such as a significantly higher inflation rate (estimated 10.4% per annum for the first year) for a few years, but I believe that these concerns will be moot once the transition is complete. |
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We generally don't consider economic concerns to be "security concerns" in the sense of the word that this section is intended for. Also, increasing miner payout increases network security, at the cost of economic stability, so this particular issue isn't a security concern.
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So is it fine that I leave out this portion? Because the guidelines require this to be filled up in order to not be outright rejected and i can't think of one. Furthermore, the EIPs that proposed a change to block rewards (specifically EIP-649 and EIP-1234) left this part out.
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The security considerations section must be included, but it can just be a one-liner indicating that there are no known security issues presented by this change. During review, if someone brings up a security issue it can be added, if not then it can go to final with just that.
| Currently, the transaction fees (tx fees) portion of the mining rewards makes up a significant portion of the total rewards per block, at times almost exceeded the block reward of 2 ETH. This have resulted in situations where at times of low tx fees, POW miners decide to point their rigs away from ETH as they will always prefer to mine coins that are the most profitable at any point in time, reducing the security of the ETH network till transaction activity picks up again. By increasing the block rewards, the voliatility will be reduced in terms of the percentage of tx fees that make up the mining rewards per block while increasing the total rewards per block, making it more financially attractive to POW miners to mine ETH barring any gigantic ETH price drops. The increase in block rewards will also allow smaller POW miners ample opporturnity to build up their stores of ETH so that when the time comes to fully transition to ETH 2.0, they may be more willing to become validators as they already have earned the requite amount of ETH needed to do so as opposed to having to spend tens of thousands of dollars to purchase the required ETH directly, increasing the number of validators in the network and therefore strengthening network security. | ||
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| ## Specification | ||
| All we need to do is to modify the parameters that define the block reward inside the source code |
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In particular, I recommend looking at past EIPs that have changed the block reward.
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| ## Specification | ||
| #### Adjust Block, Uncle, and Nephew rewards | ||
| To ensure a constant Ether issuance, adjust the block reward to `new_block_reward`, where |
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| To ensure a constant Ether issuance, adjust the block reward to `new_block_reward`, where | |
| Adjust the block reward to `new_block_reward`, where |
I'm guessing this is just a copy/paste mistake from another EIP, since this EIP specifically aims to change the ETH issuance. 😄
| ## Implementation | ||
| The implementation in it's logic does not differ from [EIP-649](./eip-649.md) or [EIP-1234](./eip-1234.md); an implementation shall be created once the specification is to be accepted by the developers or implemented by the clients. | ||
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This is not a required section, so I recommend just leaving it out rather than including it as empty.
| ## Test Cases | ||
| Test cases shall be created once the specification is to be accepted by the developers or implemented by the clients. | ||
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This is no longer a required section, so I recommend leaving it out rather than including it and having it be empty.
| This is the existing formula for nephew rewards, simply adjusted with `new_block_reward`. | ||
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| ## Rationale | ||
| I have decided to go with a 5 ETH base reward as i believe that it is a good middle ground between wanting to prevent too high of an inflation rate (10.4% per annum for the first year if we go with 5 ETH) and the desires to convert as many POW miners as possible into POS validators by making it easier to amass the required ETH needed through POW mining. |
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Nitpick: Consider rephrasing this from "I have decided" to a statement of fact. Ideally, EIPs are written for a target audience of future readers after the EIP has been accepted and implemented somewhere.
| I have decided to go with a 5 ETH base reward as i believe that it is a good middle ground between wanting to prevent too high of an inflation rate (10.4% per annum for the first year if we go with 5 ETH) and the desires to convert as many POW miners as possible into POS validators by making it easier to amass the required ETH needed through POW mining. | |
| A 5 ETH base reward was chosen as a middle ground between wanting to prevent too high of an inflation rate (10.4% per annum for the first year at 5 ETH per block) and converting as many POW miners as possible into POS validators by making it easier to amass the required ETH needed through POW mining. |
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I'll give 24 hours for @Terra854 to make any last changes based on my recent round of feedback and then merge after that. |
Incoporated the latest round of feedback and renamed the proposal to follow EIP naming scheme
Spelling fix.
This EIP proposes a block reward increase to the original block reward of 5 ETH when Ethereum first started.
This EIP proposes a block reward increase to the original block reward of 5 ETH when Ethereum first started.