What the Ethereum Community’s Staking Argument Is Really About

When
is
a
discussion
about
the
issuance
curve
of
staking
rewards
in
Ethereum
not
really
a
discussion
about
the
issuance
curve
of
staking
rewards
in
Ethereum?
When
it’s
really
about
Ethereum
governance
and
Ethereum’s
monetary
policy.

The
TL;DR
on
curve
issuance

(and
why
seemingly
everyone
is
riled
up
about
it)
is
as
follows:
on
its
current
trajectory,
it
is
conceivable
all
ETH
will
eventually
be
staked,
whether
directly
or
via

restaking.
Right
now,
almost

27%
of
all
ETH
is
staked.

Paul
Dylan-Ennis
is
a
lecturer
in
the
College
of
Business,
University
College
Dublin
and
author
of



“Absolute
Essentials
of
Ethereum.”

Starting
with
a
post
in
February
on
the

Ethereum
research
forum,
Ethereum
protocol
developers
and
researchers
have
started

the
discussion
about
how
best
to
address
it,
with
the
key
change
centering
on
a
new
issuance
reward
formula
that
makes
staking
past
a
certain
point
unattractive.

See
also:



Ethereum
Could
Face
‘Hidden
Risks’
From
Ballooning
Restaking
Market

Exciting
stuff!
Except,
the
reaction
on
social
media
has
tended
to
focus
less
on
the
technical
details
of
this
proposal
and
more
on
the
idea
that
it
involves
changing
Ethereum’s
monetary
policy.
In
other
words,
it’s
not
really
issuance
that
is
at
stake,
so
much
as
people
have
a
sense
that
the
“Core
Devs”
(a
somewhat
ambiguous
term
in
Ethereum),
particularly
those
associated
with
the
Ethereum
Foundation,
have
not
engaged
in
the
appropriate
level
of
“rough
consensus”
from
the
wider
set
of
stakeholders.

The
critics
tend
to
be
Ethereans
associated
with
the
“ultra
sound
money”
subculture
that
hopes
to

establish
ETH
as
sound
money
(in
a
similar
way
as
people
think
of
bitcoin
as
sound
money).
For
them,
changing
the
issuance
curve
is
a

red
line
because
it’s
reminiscent
of
central
bankers

constantly
tweaking
monetary
policy.

Who
are
these
wider
stakeholders?
In
my
reading,
the
Ethereum
ecosystem
encompasses
everyday
users,
node
operators,
validators/stakers,
niche
Ethereum
media
and
podcasts
and
dApp
builders.
In
at
least
two
recent
media
articles,
these
stakeholders
are
referred
to
as
the
community
and
the
community
is
either

“up
in
arms”
or

pushing
back
against
the
proposal.

The
Core
Devs
are,
of
course,
part
of
that
community,
but
it’s
also
clear
they
have
an
outsized
influence
on
the
protocol
relative
to
the
other
stakeholders.
Further,
what
we
are
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.

See
also:



Crypto
Staking
101:
What
Is
Staking?

Now,
here
is
where
nuance
is
important.
Especially
since
we
live
in
an
era
of
actual
conspiracy
theories
about
the
Ethereum
Foundation,
e.g.
the
ludicrous
world
of
“ETHGate.”
As
a

researcher
of
Ethereum
governance,
my
view
is
the
EF
is
not
“in
control”
of
Ethereum.
It
is
also
worth
mentioning
the
Ethereum
Foundation
is
engaged
in
a
process
it
calls

subtraction
where
it
will
phase
itself
out.
In
truth,
there
are
large
numbers
of
Core
Devs
who
are
completely
independent
of
the
Ethereum
Foundation
and
this
is
especially
true
when
we
include
the
autonomous
software
client
teams.

However,
it’s
also
clear
to
me
that
while
the
influence
of
the
foundation
is
overstated
by
critics,
it’s
also
understated
by
its
defenders.
We
know
just

10
people
are
responsible
for
68%
of
all
implemented
Ethereum
Improvement
Proposals
(EIPs).
And
if
you
follow
Ethereum
protocol
development
at
all
you
can
probably
guess
the
10.
Hard
forks
are
announced
via
the

EF
blog.
The
logistics
of
the
AllCoreDevs
meetings
are
mostly
handled
by
people
associated
with
the
Ethereum
Foundation.
So,
it’s
not
hard
to
see
why
some
people
fall
for
the
impression
that
the
EF
runs
the
show.

See
also:



What
Happens
if
the
SEC
Classifies
ETH
a
Security?

I
would
argue
that
this
is
really
a
problem
of
communication.
As
Ethereum
developer

Tim
Beiko
notes,
most
Core
Devs
see
the

Fellowship
of
Ethereum
Magicians
Forum
and
the

Ethereum
Research
Forum
as
places
to
discuss
and
debate
work-in-progress
research,
but
many
in
the
broader
community
misread
it
as
the
place
where
final
research
is
shared
—
and
everyone
just
has
to
accept
it.

But
as
Beiko
points
out,
there
were
efforts
by
the
two
authors
at
the
Ethereum
Foundation
who
suggested
reducing
the
pace
of
ETH
issuance
–

Casper
and

Ansgar
–
to
spread
their
message,
including
an
appearance
on
the

Uncommon
Core
podcast.
Unfortunately,
people
tend
to
focus
on
X
as
if
it
were

the
medium
for
Ethereum
governance
discussion.

Interestingly,
in
response
to
a
post
by
Hasu,

Ansgar
notes
that
they
could
have
done
a
better
job,
but
also
that
he
thinks
the
backlash
is
a
sign
of
Ethereum’s
robust
decentralization
at
work.
Which
is
true!
The
community
does
have
its
voice
and
the
ability
to
contest
research
it
does
not
like
(at
least
in
its
current
form).

How
then
to
dispel
the
idea
that
Ethereum
governance
is
the
preserve
of
the
Ethereum
Foundation?
One
path
is
what
we
see
with
layer
2s
starting
to
involve
themselves
more
closely
in
governance,
as
with
layer
2

RollCall’s
attempts
at
creating
common
standards.
Or

dApp
builders
lobbying
for
EIPs.

What
these
stakeholders
have
grokked
is
that
Ethereum
governance
is
in
principle
open
to
anyone.
There
is
nothing
to
stop
you
from
writing
your
own
research
on
the

Fellowship
of
Ethereum
Magicians
Forum
and
the

Ethereum
Research
Forum.
There
is
nothing
to
stop
you
from
championing
your
own
EIPs.
Or
attending
the
AllCoreDevs
meetings.

See
also:



How
to
Stake:
7
Strategies
for
Starting
Out

Another
overlooked
angle
is
the
importance
of
independent
observers
through
specialist
podcasts.
Sassal’s

The
Daily
Gwei
and
Christine
Kim’s

The
Infinite
Jungle
both
cover
protocol
governance
closely
and
to
my
mind
act
as
important
independent
advocates.
A
perfect
recent
example
is

Christine
Kim
at
EthDenver
asking
Prysm
developers
why
they
don’t
focus
more
on
the
user
and
developer
experience.

Thinking
bigger,
it
might
be
time
to
consider
mechanisms
for
community
feedback.
Something

I’ve
proposed
before
is
an
annual
Ethereum
Assembly
(at
EthCC
or
so)
where
different
stakeholders
in
the
wider
Ethereum
ecosystem
could
voice
their
concerns
about
any
EIPs.
But
people
tend
to
think
this
could
be
a
centralizing
force,
so
perhaps
it’s
a
no-go.

Alternatively,
it
might
be
interesting
to
explore
the
idea
of
an
online

feedback
mechanism.
Perhaps
a
window
of
one
month
annually
where
everyone
else
can
post
their
concerns
or
issues
regarding
new
research
directions,
hard
forks,
the
Roadmap,
etc.
which
Core
Devs
could
review,
as
a
sanity
check.
I
think
this
would
address
some
issues
that
are
not
going
to
go
away
otherwise.

In
the
end,
without
such
a
mechanism
for
feedback
Ethereum’s
“social
layer”
is
limited
to
X,
which
is
an
adversarial
platform
and
tends
to
encourage
our
worst
behaviors.