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EIP-3374

Predictable Proof-of-Work (POW) Sunsetting

WithdrawnStandards Track: Core
Created: 2021-03-13
Query0x (@Query0x)
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1 min read

EIP-3374 aims to sunset the current Proof-of-Work (PoW) consensus mechanism on Ethereum and transition to a Proof-of-Stake (PoS) mechanism. It proposes a predictable and gradual reduction of the block rewards for PoW miners, while increasing the rewards for PoS validators. This is intended to incentivize miners to switch to PoS and gradually reduce the reliance on PoW.

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Original

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 and related rights waived via CC0.

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