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Controversial Ethereum Proposal Dead in the Water But Generates Buzz

An Ethereum Improvement Proposal put forth last month that would back Eth1.x development via block reward funding flew under the radar until this past weekend, when Ethereum stakeholders took to publicly debating the EIP.

The proposal, EIP-2055, was introduced by ETHSignals Project Team Lead James Hancock in late June. It outlined a temporary inflationary funding mechanism that would add 0.0055 ether to every Ethereum block reward (presently 2 ETH) for 18 months, with the raised money to be put toward ETH 1.0 development efforts.

Ethereum 2.0

“ETH 1.0” is the nickname given to the current mining-based Ethereum blockchain and related projects. “ETH 2.0” is the new and coming Ethereum blockchain that will use staking for consensus and the triumvirate of Casper, Plasma, and sharding for scaling.

Hancock, who floated the possibility of creating an Ethereum sibling network dubbed Alternateth in June, has since said EIP-2055 was mainly meant to generate community feedback.

The proposal comes as many in the Ethereum community have been grappling with the issue of open-source funding in recent months, and various block reward schemes have figured into those discussions.

Now that EIP-2055 has specifically gained attention, it appears to have no path forward in its current form. The fresh outpouring of public comments against the EIP shows it’s not palatable to many of Ethereum’s stakeholders. Still, to Hancock’s credit, the episode brought another gust of focus to ETH 1.0 development efforts.

“Absolutely Absurd!”

The buzz began when EthHub builder, Into the Ether host, and Gnosis team member Eric Conner noted on Sunday how he was troubled EIP-20205 might have non-zero prospects for gaining further traction. (Note: Conner later clarified the “0.044 ETH” below was a typo; EIP-2025 calls for 0.0055 ETH to be added per block).

Some like Hudson Jameson later contested that initial characterization of the last Ethereum Core Dev call’s treatment of EIP-2025, but Conner went on to argue it was still worth pushing back against the proposal to fight for Ethereum staying neutral at the protocol level.

“It’s important to set a precedent that block rewards cannot be captured,” Conner said. “It’s an insanely slippery slope.”

SpankChain chief executive officer and MolochDAO founder Ameen Soleimani joined the chorus of those publicly opposing EIP-2025, as he pointed to a thread he wrote earlier this year wherein he argued “the risk of a contentious fork is higher than the benefit of [block reward] funding.”

Another thrust made among those opposing EIP-2025 was that the Ethereum Foundation said back in May it had just earmarked $8 million USD for ETH 1.0 projects. Their point? Why do something as aggressive and contentious as block reward funding when the Ethereum Foundation might be able to cover the needed expenses.

As the Foundation noted a few weeks ago:

“Ethereum is used in production today to secure billions of dollars of assets and as a base layer for many hundreds of live applications. We believe that it is vital to continue supporting these efforts to ensure that ‘Ethereum 1.0’ continues to be the world’s dominant smart-contract platform.”

Of course, people have their own problems with the Ethereum Foundation, and grants aren’t a catch-all funding solution. But $8 million in earmarked funds for ETH 1.0 is enough of a base to start from to make EIP-2025 seem unwarranted to many in the Ethereum community.

Zooming out, there are other open-source sustainability possibilities that Ethereum’s builders can explore beyond block reward funding.

Voluntary coordination DAOs like MolochDAO and MetaCartel are on the rise and can be forked toward new ends. Microdonations are another avenue; Ethereum co-creator Vitalik Buterin has conceived of some wallets taxing a 1 gwei fee per transaction to raise an Ethereum development fund. Gitcoin, akin to a decentralized Patreon, is also an option.

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