EIP 2025 Could Destroy Faith in Ethereum | BTCMANAGER
Bitcoin, Blockchain & Cryptocurrency News
A proposal on Ethereum put forth by James Hancock has been shot down by the community. The proposal aimed to temporarily inflate supply by adding a .0055 ETH reward in each block that would be routed to an independent developers fund, which would then be used to carry out necessary development on Ethereum 1.x, July 24, 2019.
Protocol Changes Threaten Decentralization
After the DAO hack and subsequent rollback, many were turned away from Ethereum simply because developers had enough clout to convince miners to roll back the chain. The fundamental premise of a blockchain is immutability – whether it is beneficial or not.
If EIP 2025 had been passed and implemented in the protocol, it would have spelled disaster for Ethereum. This proposal essentially inflates the supply of Ethereum for 18 months by adding to the block reward and token issuance.
As an asset that relies on its deflationary economics to create value and scarcity, inflation is a dangerous addition.
At a 20 second block time, this would lead to 14,500 ETH sent to the fund in a single year. However, Hancock also specified a 1,000 ETH soft cap after which the reward would be halted and could be resumed in the future if necessary.
Many investors could lose faith in Ethereum as a decentralized protocol if this went through. Not only does it adversely affect token holders, but it also increases the likeliness of infighting and a contentious hard fork.