Ethereum creator Vitalik Buterin recently proposed capping the issuance of ether (ETH) at “120,204,432, or exactly 2x the amount of ETH sold in the original ether sale.” The proposal could determine whether the Ethereum network will limit the amount of ether to be created, an issue that has been known to bother some investors.
Through an Ethereum Improvement Proposal (EIP) published on April Fool’s day, Buterin outlined his thoughts on Ethereum’s monetary policy, a subject that some believe hasn’t been properly addressed. While there won’t ever by more than 21 million bitcoins, Ethereum’s policy has been an open-ended one.
Per its original terms, the network could see up to 18 million ether enter the market every year. Buterin’s proposal seems to address this, as he noted the proposal looked to “ensure the economic sustainability of the platform under the widest possible variety of circumstances.”
The cryptocurrency creator further added that it came in “light of the fact that issuing new coins to proof of work miners if no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal.”
While the policy’s timing looks suspicious, odds of the proposal being a joke look slim, as it would be a somewhat elaborate one. On the proposal, Buterin elaborated on how Ethereum rewards would play out in the long run if his approach is accepted. Per his words, mining rewards would approach zero if the cryptocurrency keeps on being proof of work.
“In reality, however, rewards will decrease greatly with the switch to proof of stake, and fees such as rent (as well as slashed validators) will decrease the ETH supply, so the actual ETH supply will reach some equilibrium below MAX_SUPPLY where rewards and penalties/fees cancel out, and so rewards will always remain at some positive level above zero.”
He further foresaw situations in which the policy wouldn’t be adopted until after 120 million ether have been issued. If such a situation arises, he proposed setting a higher maximum cap, and recommended “144,052,828 ETH, or exactly 2x the total amount released in the genesis block including both the sale and premines.”
Although some questioned whether this was an April Fool’s day joke or not, various investors notably supported the EIP. A clear April Fool’s day joke came from Hudson Jameson, an Ethereum developer, who dubbed Buterin’s EIP a cryptographic treasure hunt, that lead to this conclusion:
Putting all of this together it is obvious that Vitalik has hidden a treasure at that location in Niger that can only be retrieved on January 1, 3321.— Hudson Jameson (@hudsonjameson) April 1, 2018