My main thing as a small miner is not profitability. The mining community has, for a long while, known that we would enter this mining profitability wasteland post-merge. As such the concerns and suggestions I mention are not coming from a place of delusion, believing that even if the network hardforked, we’d still be unprofitable/barely profitable for the foreseeable future (1 year+ or until the macro outlook reverses course)
So my desire to have something to done regarding the current difficulty adjustment mechanics stems from my being someone who wants to see Ergo win and also invests (DCA) in Ergo beyond the simple $ERG denominated revenue my 6 card rig generates.
As it stands, the GPU mining landscape is much akin to a John Carpenter-esque, PvE, dystopian jungle. The degree to which the PvE raider mining practices occur increases proportionate to the $$$ amount of overhead any one mining actor has to sustain.
I mention this, because I have seen several tweets conveying a message effectively saying: “Don’t worry, this is the first week, give it time, it’ll sort itself out.”
I think anyone holding this perspective doesn’t fully appreciate the degree to which the GPU mining economy has been destabilized by Ethereum’s transition to PoS.
Mining is now a wholly nomadic enterprise and should continue to be so for the next few years when factoring current macro conditions, with the reality of the long road that faces any PoW L1 chain seeking to build an economy of Ethereum’s magnitude, constituent popularity, developer ecosystem and associated coin/token value.
Understanding that this is the state of GPU mining, that even if actors want to exit the game, there are few eager to buy the hardware that the myriad operations of varying scale may before long seek to liquidate, that there is no “ol’ reliable” to fall back on to keep the lights on anymore, entails that any difficulty adjustment mechanics that can be gamed to the benefit of a few miners, will be gamed, health of the network be-damned. Vampirism and self-preservation are running the show.
The problem with Ergo’s current difficulty adjustment mechanics is that which it is quick to increase difficulty, it is slow to decrease it.
What we just days ago was the network inundated with hashrate, the difficulty skyrocketed (as it should) rapidly due the significantly decreased block times accelerating the network’s march to the next epoch. Then, once the difficulty had adjusted to never before seen levels, a mass exodus of hashrate began as the network profitability plummeted.
The problem the remaining Ergo miners were left with was that our relief, the next difficulty adjustment, would be slow to come as the checkpoints for difficulty adjustment are governed by a naked block count not factoring for passage of time in the real world. When the hashrate exodus occurred after the difficulty spike, with difficulty so high and hashrate gutted, block times increased significantly.
I would very much like to see more dynamic difficulty adjustment mechanics explored, mechanics that by whatever suitable means, account for avg block times and increase or decrease the # of blocks to next diff adjustment accordingly with a target average blocktime being used to guide the development of the rule set.
Profitability is a lost cause. What I care about is the stability of the Ergo network both from a security standpoint and an end user UX perspective. What kind of UX is being delivered if the network is only fast one day a week and reliably sluggish the other 6 days until we adjust back down; rinse and repeat. When somebody buys a piece of this network in the form of $ERG, is this what they want to hold?
Fortunately, we saw no issues from this initial hashrate cycle surrounding blocktimes being too fast, but it is a technical possibility.
Again, my desire here is to mature and harden the network, to enhance its resilience where possible. For me this is all about design optimization. Good enough is good enough until it isn’t. This instance shined a light on something that, without such novel circumstances, may never have been discussed. I say we take this opportunity to fully explore the potential benefit to the network of entertaining alternative difficulty adjustment mechanics in earnest.
Lastly, maybe the chain hopping dies off soon. However, I am very dubious. There are few serious GPU Mineable projects in the market lineup and there will continue to be plenty of attention on Ergo in the years ahead. As currently, it is exceptionally easy to monitor and time the next difficulty adjustment to exploit as the block times between are at a crawl. A more dynamic adjustment mechanic would mean that actors would have to expend more time and effort trying to time and game the difficulty producing an increasingly diminishing return on investment for mercenary miners the more effectively dynamic the adjustment mechanism selected is.