IOHK of Charles Hoskinson recently released two classic Ethereum upgrade proposals (ECIP) designed to help the struggling chain recover after a string of recent 51% attacks.. The first introduced a system of checkpoints to prevent the possibility of such attacks, and the second proposed a decentralized treasury, an apparently divisive idea within the ETC community.
There has been a heated debate over the future of the project following the recent attacks. Hoskinson, one of the co-founders of Ethereum and a supporter of the ETC fork, believes that the way forward revolves around the establishment of a decentralized treasury. The proposal suggests that the current funding method has failed and it is time to change:
“The current approach of relying on volunteers and benefactors to support the ETC ecosystem has failed.”
Hoskinsons Cardano (ADA) and several other large cryptocurrency projects have already successfully implemented a decentralized treasury that enables independently funded research and development. The difficulty is that most projects introduce this type of mechanism from the start. In the case of ETC, there is concern that the sudden impact of such a large change could lower the hash rate and put the network at greater risk.
Terry Culver, CEO of ETC Labs and a key stakeholder in the ecosystem, said in an email to Cointelegraph that he disagrees with the current system failing:
A state treasury will be the true mark of ETC failure. You can’t create a decentralized public blockchain with a “money tree” that some benefit from. ETC Labs, COOP and other community members will do everything possible to keep the network secure.
Such a proposal would ultimately reduce the rewards miners receive for their contribution to the network.. These people would need to believe that the positive impact on the price of ETC will offset the proposed 20% reduction in block rewards.
The current reward, which is 3.2 ETC per block, would be reduced to 2.56 ETC if the proposal is approved by IOHK. This would result in a difference of 0.64 FTE, which would instead go directly to the treasury. Miners would also have the option to burn 20% of the block reward instead of donating it to the fund.
The initial distribution of the treasury suggests that 10% will be used for Gitcoin grants, with the remaining funds to be split between three community-selected development projects. Each of them would receive 30% of the allotment.
Culver said ETC Labs is ready to work with IOHK to improve Ethereum Classic but will reject the Treasury proposal:
“We do not support the Treasury’s proposal as a tax on miners would cripple the network. We would ask miners to earn 20% less in ETC when mining other chains is already more profitable. They will push them away if we have to . ” Reduce the hashrate and make the network more vulnerable. In the long run, a state treasury would essentially turn ETC into a private blockchain with centralized government and a monopoly on decision-making. “
Charles Hoskinson told Cointelegraph that with the existing checkpoint system, hashrate decline will no longer matter.::
Sure, we could suffer a decline in the short term, but we no longer rely on them to keep the system safe.
He added that the miners would eventually return as his proposal would encourage the adoption and growth of ETC:
“In that case there would be a hybrid model. Give us time to rebuild interest and acceptance, which will add more than 20 percent to the price and bring the miners back. They are not voters, they are corporations.”
A virtual meeting of ETC core developers is scheduled for today to discuss various hard fork proposals, including the IOHK checkpoint system.