Roy Zou undertakes Ethereum Classic monetary strategy advocacy
ETC China organizer Roy Zou is presenting to miners and exchanges in China the argument in favor of adopting ECIP-1017.
Authored by Matthew Mazur (Snaproll on Github), the monetary strategy proposal seeks to address the issue, coded into the protocol by the Ethereum Foundation, of the limitless issuance of Ethereum tokens. (The Foundation intended to solve the inflationary monetary policy by transitioning to a proof-of-stake consensus mechanism, firing the miners in the process.)
The Ethereum Classic proposal seeks to retain mining-based proof-of-work, while setting an upper bound on token issuance, providing institutional investors with greater confidence in ETC’s potential as a store of value. Zou, the Chairman of the Board of Directors for the Ethereum Classic Consortium, began introducing the public to the proposal back in January by organizing a question-and-answer session, hosted by the 8btc cryptocurrency portal.
There, Mazur joined ETCDEV chief technical officer Igor Artamonov (Splix on Github) and Fundonomy fundraising initiative founder Avtar Sehra in offering commentary on ECIP-1017. Zou provided Chinese translation for those offering questions. There, Mazur explained, “Having an upper bound, or a ‘cap,’ on a token, or any tradeable object, assists with price discovery, or finding the true value of something, since its level of scarcity is known and/or can be measured.”
Since that time, Mazur has published a paper elaborating upon the rationale underlying the monetary strategy proposal. “Bitcoin has, by far, the most adoption,” he writes in his online thesis. “Everyone in the crypto space knows its distribution rates, and no one really has a problem with it.”
ECIP-1017 emulates protocol specifications of Bitcoin that, we can observe, have managed to secure adoption. By emulating Bitcoin’s issuance schedule, the proposal attempts to “reduce the total amount of risk in the monetary policy, thus leading to a higher probability of obtaining optimal total investment.”
Investor Support for ECIP-1017
The first venture capital company to show support for Ethereum Classic is Digital Currency Group. Founder Barry Silbert strongly favors ETC adopting a deflationary monetary strategy modeled after Bitcoin’s, as he stated during a presentation with DCG colleague Meltem Demirors at Blockchain Startups Singapore. His assessment of the Ethereum Foundation’s ETH issuance model is that its present lack of commitment to a hard cap makes it intrinsically unappealing to institutional investors.
“That to me was the final nail in the coffin of the Ethereum [ETH] investment base,” said Silbert. “You have to understand that I spend easily 25% of my time with institutional investors and hedge funds explaining to them the Bitcoin supply dynamic. Everybody knows it’s 21 million and the growth is fixed. The idea that five individuals could unilaterally make a decision to fork Ethereum — in my opinion, out of self-interest — meant that we were never going to see Ethereum successful as an investment asset class.”
The inflationary monetary policy and centralized governance of ETH’s platform make it unappealing to DCG, in contrast to ETC’s commitment to decentralized governance and updated monetary policy. Digital Currency Group selected Ethereum Classic as its first altcoin (alternative cryptocurrency) investment, and pledged to launch an Ethereum (ETC) Investment Trust upon the adoption of an improved monetary strategy.
DCG invests in over eighty companies in the cryptocurrency space, including Japan’s highest funded Bitcoin exchange, bitFlyer. Silbert nevertheless takes time to visit the Ethereum Classic Slack channel to lend encouragement to the community and their commitment to realizing their goals. “[M]y primary focus is moving the monetary policy forward,” he mentioned in a recent discussion on the Slack channel, and suggested, “[I]f there are no issues raised, we move forward.”
Developer Support for ECIP-1017
Back in December, Dr. Sehra of the Fundonomy initiative organized a well-attended London conference, introducing the ECIP-1017 proposal. The Ethereum Classic Year One and Crypto Monetary Policy meeting featured presentations by the organizer, Artamonov and Mazur, along with commentary by Jon Matonis, the founding director of the Bitcoin Foundation. Professionally recorded videos of the presentations are available on YouTube.
Today, Artamonov and his team members at ETCDEV are conducting a battery of tests to identify any security risks associated with ECIP-1017. Such experiments by the team’s CTO managed to ensure January’s Diehard protocol upgrade was implemented without suffering any setbacks. The team is targeting Parity client testing of the monetary strategy upgrade in April, followed by a private and public testnet release, and main network configuration in July.
Roy Zou’s Q&A session for 8btc represented a concerted effort to facilitate dialog between the community in China and the ETCDEV team. Now he is in the process of meeting with miners and exchanges in China on a mission to determine the fate of ECIP-1017. Its implementation would provide institutional investors a strong argument in favor of ETC’s efficacy as a store of value, facilitating the launch of Digital Currency Group’s Ethereum (ETC) Investment Trust.
Github — ECIP-1017
