EIP-3374: Predictable Proof-of-Work (POW) Sunsetting


  Ethereum Improvement Proposals
        
        
          
            
              
            
          
        

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      Standards Track: Core
    
  
  
    
      EIP-3374: Predictable Proof-of-Work (POW) Sunsetting
    
    
      
        
      
    
    
      
        
      
    
  

  

  	Authors	Query0x (@Query0x)
	Created	2021-03-13
	Discussion Link	https://ethereum-magicians.org/t/eip-3374-predictable-proof-of-work-sunsetting


  


  

  
    Table of Contents

    	Simple Summary
	Abstract
	Motivation
	Specification
    	Constants
	Block Reward


  
	Rationale
	Backwards Compatibility
	Security Considerations
	Copyright



  


  
      
      
         Simple Summary
      
      
    

Sets block reward to 3 and reduces it to 1 linearly over the course of about 1 year.

  
    
      
      
         Abstract
      
      
    

Sets the block reward to 3 ETH and then incrementally decreases it every block for 2,362,000 blocks (approximately 1 year) until it reaches 1 ETH.

  
    
      
      
         Motivation
      
      
    

Unnecessarily abrupt changes to the Ethereum ecosystem cause disruption and disharmony resulting in the disenfranchisement of community members while undermining stability and confidence.  While moves from Proof-of-Work to Proof-of-Stake will undoubtedly cause friction between those community members vested in either, all benefit from a measured, predictable transition.


This proposal:


1) Is issuance neutral over 1 year, and reduces issuance beyond that.
2) Sets an initial block reward of 3;
3) Introduces an ongoing, predictable reduction in future mining rewards down to 1, effectively “sunsetting” POW and codifying the move to POS;
4) Reduces economic incentives for continued development of ASICs;
5) Allows the impacts of decreasing miner rewards to be measured and monitored rather than relying on conjecture and game theory, so adjustments can be made if necessary.

  
    
      
      
         Specification
      
      
    

  
    
      
      
         Constants
      
      
    

	TRANSITION_START_BLOCK_NUMBER: TBD
	TRANSITION_DURATION: 2_362_000 // (about one year)
	TRANSITION_END_BLOCK_NUMBER: FORK_BLOCK_NUMBER + TRANSITION_DURATION
	STARTING_REWARD: 3_000_000_000_000_000_000
	ENDING_REWARD: 1_000_000_000_000_000_000
	REWARD_DELTA: STARTING_REWARD - ENDING_REWARD
  
    
      
      
         Block Reward
      
      
    

    if block.number >= TRANSITION_END_BLOCK_NUMBER:
  block_reward = ENDING_REWARD
elif block.number == TRANSITION_START_BLOCK_NUMBER:
  block_reward = STARTING_REWARD
elif block.number > TRANSITION_START_BLOCK_NUMBER:
  block_reward = STARTING_REWARD - REWARD_DELTA * TRANSITION_DURATION / (block.number - TRANSITION_START_BLOCK_NUMBER)


    

  


  
    
      
      
         Rationale
      
      
    

Picking starting and ending block reward values that are equidistant from the current block reward rate of 2 ensures the impact of this EIP will be issuance neutral over the one year time frame.  Temporarily raising the block reward to 3 blunts the initial impact of a sudden miner revenue decrease and the continual reductions thereafter codify Ethereum’s move to POS by increasingly disincentivizing POW.  Importantly, this approach moderates the rate of change so impacts and threats can be measured and monitored.

  
    
      
      
         Backwards Compatibility
      
      
    

There are no known backward compatibility issues with the introduction of this EIP.

  
    
      
      
         Security Considerations
      
      
    

There are no known security issues with the introduction of this EIP.

  
    
      
      
         Copyright
      
      
    

Copyright and related rights waived via CC0.


  Citation

  Please cite this document as:

  
  Query0x (@Query0x), "EIP-3374: Predictable Proof-of-Work (POW) Sunsetting [DRAFT]," Ethereum Improvement Proposals, no. 3374, March 2021. [Online serial]. Available: https://eips.ethereum.org/EIPS/eip-3374.






      
    
  

  

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        Ethereum Improvement Proposals (EIPs) describe standards for the Ethereum platform, including core protocol specifications, client APIs, and contract standards.