Author: Dr. Paul Dylan-Ennis, Lecturer/Assistant Professor at University College Dublin Business School, CoinDesk; Translated by: Wuzhu, Golden Finance
When does the discussion about staking reward issuance in Ethereum go beyond itself? When it actually involves Ethereum governance and Ethereum monetary policy.
The long story about issuance in short (and why everyone seems to be angry about it) is as follows: On the current trajectory, it is conceivable that all ETH will eventually be staked, either directly or through re-staking. Currently, almost 27% of ETH is staked.
Starting with a post on the Ethereum Research forum in February, Ethereum protocol developers and researchers have begun discussing how best to address this issue, with the key changes focusing on a new issuance reward mechanism that makes staking beyond a certain point unattractive.
Exciting stuff! Beyond that, reactions on social media tend to focus less on the technical details of the proposal and more on the idea that it involves changing Ethereum monetary policy. In other words, it’s not really about issuance that’s at stake, but rather the sense that “core developers” (a somewhat fuzzy term in Ethereum), particularly those associated with the Ethereum Foundation, are not engaging at the appropriate level of “rough consensus” from the wider stakeholders.
The critics tend to be Ethereum people associated with the “ultra-sound money” subculture, who want to establish ETH as sound money (similar to how people think Bitcoin is sound money). For them, changing the trajectory of issuance is a red line, as it’s reminiscent of central bankers constantly adjusting monetary policy.
Who are these wider stakeholders? In my opinion, the Ethereum ecosystem includes everyday users, node operators, validators/stakers, niche Ethereum media and podcasters, and dApp builders. In at least two recent Medium articles, these stakeholders are referred to as the community, and the community is either “up in arms” or opposing the proposal.
Certainly, the core developers are part of that community, but it’s also clear that they have a huge amount of influence over the protocol relative to other stakeholders. Furthermore, what we’re really talking about here are the various researchers who are paid by the Ethereum Foundation — because, well, the Ethereum Foundation is one of the few organizations that pays people to focus on protocol research.
Now, this is where nuance matters. Especially since we live in an age of actual conspiracy theories about the Ethereum Foundation, such as the absurd world of “ETHGate.” As a researcher on Ethereum governance, my view is that the EF does not “control” Ethereum. It’s also worth mentioning that the Ethereum Foundation is in the process of something called subtraction, where it will phase out. In fact, there are a large number of core developers that are completely independent of the Ethereum Foundation, especially when we include autonomous software client teams.
Perhaps it’s time to consider community feedback mechanisms.
However, it’s also clear to me that while critics overstate the influence of the Foundation, its defenders also underestimate it. We know that just 10 people are responsible for 68% of all implemented Ethereum Improvement Proposals (EIPs). The logistics of the AllCoreDevs meetings are primarily handled by people associated with the Ethereum Foundation. Therefore, it’s not hard to understand why some people mistakenly believe that the EF is in charge of everything.
I think this is really a communication problem.
As Beiko points out, two of the Ethereum Foundation authors, Casper and Ansgar, have suggested slowing down the ETH issuance rate in order to spread their message, including appearing on the Uncommon Core podcast. Unfortunately, people tend to focus on X as if it is a medium for Ethereum governance discussions.
Interestingly, in response to Hasu’s post, Ansgar noted that they could have done better, but he sees the backlash as a sign of Ethereum’s strong decentralized operation. This is true! The community does have its voice and the ability to fight research it doesn’t like (at least in its current form).
So how do you dispel the idea that Ethereum governance is the responsibility of the Ethereum Foundation? One path is what we’re seeing with Layer 2 starting to get more closely involved in governance, like Layer 2 RollCall trying to create universal standards. Or dApp builders lobbying for EIPs.
What these stakeholders understand is that Ethereum governance is in principle open to anyone. There’s nothing stopping you from writing your own research on the Ethereum Magicians forum and the Ethereum Research forum. There’s nothing stopping you from championing your own EIP. Or attending the AllCoreDevs conference.
Another overlooked angle is the importance of independent observation through professional podcasts. Sassal’s The Daily Gwei and Christine Kim’s The Infinite Jungle both follow protocol governance closely, and in my opinion, are both important independent advocates. A perfect recent example was Christine Kim at EthDenver asking Prysm developers why they don’t focus more on user and developer experience.
Thinking bigger, maybe it’s time to consider community feedback mechanisms. I've previously proposed an annual Ethereum conference (around EthCC) where different stakeholders in the wider Ethereum ecosystem could voice their concerns about any EIP. But people tend to think that this could be a centralizing force, so maybe that's a no-go.
Alternatively, it might be interesting to explore the idea of an online feedback mechanism. Perhaps a month per year where everyone else could post their concerns or questions about new research directions, hard forks, roadmaps, etc., and the core developers could review them as a sanity check. I think that would solve some of the problems that aren't going away.
Finally, without such a feedback mechanism, Ethereum's "social layer" is limited to X, which is an adversarial platform that tends to encourage our worst behaviors.
Alex
Joy
Brian
Snake
Kikyo