Not a miner but active community member - I see the emission adjustment as positive for near- and long-term adoption of Ergo. From discussions I have read here, in Reddit, Telegram, and Twitter, sentiment agrees that a lowering of emissions is favored by most. I will defer to you technical experts on the best approach, and fully support!
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In favor of Kushti’s proposal. One suggestion - could we have some third party career experts in tokenomics / economics take a look and audit the proposal as well?
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“At its heart what I’m taking about is really a process to reduce supply whilst making sure some of the tokens emitted now can be used at a later date. To think about a golden point between scarcity, overwhelming the market, and growth of users in the network.”
That’s essentially at the heart of the proposal.
it’s not possible to “pseudo-burn” Erg already in circulation, unless people or dapps volunteer to send % of their Erg to burn address or re emissions contract.
But if this proposal passes, we can start storing a % of upcoming block rewards, and distribute those stored Erg as rewards to miners, at a later date.
What is being proposed will slow down emissions and should achieve what you are talking about to some degree. In near future, circulating supply will be lower if this proposal passes. But total supply will not change.
~97 million Erg is total supply and cannot be changed according to kushti. So the question is, how quickly do we want those ~97 million to be put into circulation?
And how fast this can go into effect depends on the community coming to a clear consensus. Once finalized & introduced, the proposal will be available for passage for a limited time.
Kushti’s last proposal (to reduce storage rent period from 4 to 3 years) failed. Probably one reason kushti says he wants community votes to occur, before voting on proposal by nodes happens. Also why IMO we can’t add additional mechanics to the proposal, because I highly doubt a super majority of those running full nodes will vote in favor of a more complex proposal.
& Thank you for contributing to this discussion!
-Gabe
I am not a miner. However, I strongly support Kushti’s proposal and think it is in the entire community’s interest including miners.
Firstly, it is absolutely essential to insure the long-term security of the network and nothing is more important than that.
But secondly, I think the proposal will bring other great benefits to the community in terms of adoption and price. We all know about Bitcoin’s halving cycles and the incredible impact that has had on Bitcoin’s price performance over the years. Well, Ergo has a very aggressive emission and this is a big reason why price has been under pressure. A reduction in inflation will lead to higher prices, more users and investors and more adoption and development in a virtuous feedback loop just as we have seen in Bitcoin. This helps Ergo grow and will increase the profits to miners and make Ergo a more competitive coin versus PoS and other non-PoW platforms. This is very important for miners who are seeing less and less good mining options with Ether moving to PoS and most other new layer 1s embracing exotic non-PoW consensus models. Ergo has the potential to lead the PoW pack in my opinion and hopefully miners will see setting off this virtuous cycle is also in their interest.
Thirdly, extending the emission out for many years, even possibly more than are absolutely necessary from a security stand point will lessen the dependence on transaction fees in the long-term and give the miners more room to vote to raise block size and increase throughput when Ergo is super popular enhancing Ergo’s utility in the decades to come.
So I not only support Kushti’s proposal but I support a relatively aggressive version with X=18 and 26.34 years more emission. Hope the community and miners can get behind it and make it a reality ASAP.
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I am no expert on the mining things, so I talk my economist view in general:
Reading the comments it seems that pretty much everyone agrees that the change in the emission is fundamentally better. All of the concerns revolve around profitability and price action.
In general, when decision makers try to please the markets, it is a race to the bottom. Markets extract their short term profits, but then move on, because the fundamentals got weaker.
Therefore, I think the price impact should not be driving the decision. It is impossible to model the market reactions anyway.
What is best for Ergo’s fundamentals and sustainability, should be the decisive factor. Markets will align.
Edit: Ergo has also been consistent in communicating its dedication to sustainability and strong fundamentals. I believe that this is what the markets (or whale supporters) also expect. Therefore, trying to please the markets might even lead to a lower price. In reality, there is no way to know for sure. Which is why the price concerns should not drive the decision.
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Hi all,
I have been watching Ergo project for a few months and took small part (~1Gh) in the mining too to get some skin in the game.
From what I read, Kushti’s proposal is to smooth out the mining reward which is a good thing for sustained incentive over longer period of time. We all know that Ergo needs more time to flourish and build the ecosystem out.
I have seen a lot of discussions about price actions. No one can predict how the future may play out and I believe we should focus on the fundamentals. A healthy ecosystem (working products, community involvement, publicity, sound tokenomics) will eventually drive healthy price over the long term. Yes there may be bad days with mining profitability hitting floors and some people may choose to leave for that reason. No only Ergo may undergo such a painful process, Eth and other POW project has gone through similar process in the past.
With concerns over the excessive PoW hash power from Eth, it is going to be likely a bloodbath regardless Ergo’s reward change. Unless something comes up to suck up these hash power, it will bring a huge impact on Ergo and any other PoW projects. I don’t think Ergo should concern the long term reward scheme with some inevitable short-term event like Eth PoS migration.
Looking forward to see more details on EIP from Kushti.
cheers,
llcrypto
/end-my-first-post
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More discussions here
It mean less reward for miners 
Your perspective is on point.
I oppose this proposal.
I oppose it simply because it’s what every other chain would do, which isn’t aligned with the ethos of calculated risk for unrealized gain. There are already great dapps on our L1. As interoperability increases, the transactions will only increase from there. Leave the emissions as is, and let the network naturally evolve.
We already had our baptism by sea during crypto winter. I think we stay the course and wait for the baptism by fire when a big market correction hits in a couple bitcoin cycles.
The beautiful thing about this experiment is that it’s open source. If we fail the lessons we learn can be used to create something better.
OK, so what has come to light in order for the current emission rate to no longer serve purpose? The adoption of pools I guess?
Unfortunely what I see is also a lot of pool hoping and rented hash power. How can this be challenged, as if the reward per block is cut to say 3 ERG, and the price does not start to enter the ball park of ETH price, then the majority of smaller miners/farms wont be able to continue with suplying hash.
ERG is on the same page as ETH when it comes to power, a bit better, but not a lot.
So say a miner has ~5GHs. At current diff that would get them approx 13 ERG a day right now… Cut the reward to 3 ERG a block and I would estimate they would be down to 0.6 ERG a day.
Going on ATH price, that still is not going to be covering the cost of power for many small miners and not much profit for big ones either.
There are so many variables we currently do not know right now, especially how much hash is coming this way in the next 6-8 months and what that is going to do to the difficulity.
I dont know, it feels rushed to me… Also maybe the calcs are way off, but thats how I see it right now.
P.s. I tried solo mining on a solo pool with 8GHs for two days. Got nothing, most of the blocks found by rented hash power.
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I agree. The short term price concerns are not reflective of Ergo’s ethos and vision, not in the slightest.
This cannot revolve around short term price, this is about network security and Ergo’s survivability years, and possibly decades from now.
I’m starting to see the benefits of node only voting for protocol changes/EIPs.
I agree, you can’t knee jerk on the short term price, but we can’t tell the future of what the price will do.
You mention security…
Well if the profit balance for miners is not great, then you will have security concerns because of the lack of decentralised consensus and a low network hash being easier to rent and get control of.
I personally just don’t think planning ahead not knowing price is a good idea.
Say you make that change today. My view would be that you kill the network until price rises, as all miners that need to recoup hardware costs etc will want a good profit coin, some that own the hardware and have low energy costs may hedge their bets and stock up.
Considering energy prices and policies being pushed through, I would not count my chickens just now on energy prices keeping low even in the cheap countries as a safe bet right now either.
I have not yet seen any research with clear indicators that a soft fork is required for any purpose concerning emissions, no simulations, no evidence that one is required for any purpose, no examples introduced from other project’s, and no guarantee of protocol security after introducing such a soft-fork.
The community that has adopted Ergo and its fundamentals has done so considering the current emission schedule, myself included, with this in mind it should be important to weigh the growth and adoption of Ergo before the emission schedule was brought forward as a ‘possible issue’ concerning security and miner reward when the current schedule ends - which let me remind you looked like a good option at the conception of the mainnet.
Let me be clear on my own position - I am not opposed to a Soft-Fork if this is something miners need to ensure the security of the protocol after the currently scheduled emission’s, I am however involved in a DeFi project that is Ergo centered that began before this emission conversation started and honestly I believe that if given enough time our community ( that has grown 10x in less than a year) will continue to bring value to Ergo through contributing in many many way’s some seen and some unseen, the sigmaverse.io page has exploded recently, the EF has a legal identity, we see recent projects like ErgoDex creating value for SigUSD and integrating with other chains, we see plans for wbtc on Ergo, plans for Bridges to privacy chains, bridges with Solana and more!
All of this started before the emission schedule conversation!
There are people working toward creating pathways for protocol security and ensuring the success of the initial design of the protocol emissions if you just look into all the projects involved in Ergo, imo there is no way for any 1 person to understand all of the developments in our space so good luck if you make the attempt to.
I want to encourage miners that are actively mining to consider the growth of the last year, and set aside every other protocol you know of and think about what it means to be a part of the Ergo ecosystem, and how a non-inflationary currency that you are mining will have opportunity to prove to the world that we do not need inflation to be a part of economic policy’s.
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The emissions proposal is introduced because transaction fees and storage rent is not enough to secure the participation of miners in the network, at least not in the current state.
This was already the issue before because Alex tried to introduce storage rent every 3 years but it failed, so another way must be introduced.
The emissions soft fork only exists to add more time for the network to mature. More time so means more research towards storage rent and more time for Ergo to show it’s value to the world.
It is true that Ergo has evolved a lot the last year, however which coin didn’t? Also, have you seen the volume? Low number of transactions mean low income for miners for transaction fees.
Overall, I don’t think that the proposal has negative intention. However I do think there is a big risk at the time of the emissions change.
Let me highlight your words here : “at least not in the current state”
If you think Ergo will be in the same state a year from now as it is today you obviously do not give any credit to the projects that are working towards building value for Ergo, I am personally offended and disgusted that anyone would disregard my own ambitions to build out a lending platform that not only drives value for Ergo but also has the oppotunity to change the world on many levels.
I agree the proposal has no negative intention and I have also committed to support the vote the miners decide , yet a vote for a longer emission tail through utilizing a smart contract imo is a vote against the projects that are currently building on Ergo - To this date all projects building on Ergo have obviously adopted the current emission schedule, count those projects yourself, let me know what you come upwith…
Without clear research about why the emission schedule should change I see no good need for it, personal argument is not enough for me, show me the facts, if you cannot show me facts than shut up and stop arguing for the emission extension
Or give a personal opinion about why it will help anything - I will then compare it to a lack of clear research and see which position holds the most weight.
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In essence nothing is changing regarding the time to mint all tokens right. It’s just a vast majority of them will be held in this smart contract.
I know Alex explained already the working of this, but I still feel a little anxious that ~21 million ERG is going to be sitting in a contract somewhere. Like a honey pot attracting the bees.
As a miner, I don’t mind it happening, although saying that, if it’s changed and the price does not do much, then I’ll be hashing to another token, and I’m sure I won’t be the only one. This in itself is a risk to the network as I’ve previously said.
It’s a risk in my view, but the coders are a lot smarter than me, so…… What will happen, will happen.
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It seems the softest option is the most popular. I made like 90% of the code I believe, need to cover it with tests and also test in a devnet, then in the testnet.
I also just made EIP draft public [WIP] EIP-0027: Emission Soft-Fork by kushti · Pull Request #52 · ergoplatform/eips · GitHub
And we will have community chat on Thu, Dec, 23rd, 8PM UTC over Reddit (/r/ergonauts), please join!
Thanks for the discussions, a lot of good thoughts to consider really.
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Changing the emission or supply cap is against the fundamentals:
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