Ethereum (ETH) issuance could be reduced by up to 10x

05 Jul, 2019 | Updated: 05 Jul, 2019
by David Robb
Ethereum (ETH) issuance could be reduced by up to 10x

The next two years could see a tenfold reduction in the issuance of ETH tokens. Justin Drake of the Ethereum Foundation explained this development in an interview he recently gave to TrustNodes.

Drake outlined a rough timeline for the important milestones in the Ethereum 2.0 hardfork: "January 2020: beacon chain launch. June 2020: eth2 light clients production-ready. November 2020: eth1 fork #1 to have its fork choice rule honour eth2 finality (conservatively, no issuance reduced). March 2021: eth1 fork #2 to reduce issuance by 10x".

The new proof-of-stake Ethereum blockchain that should take over in 2021 will see a reduction in the amount of ETH issued per block, from around 2.0 ETH to 0.22 ETH. The current proof-of-work network will continue alongside it for at least two years as the Ethereum eco-system will need some time to adapt. 2 million ETH needs to be staked by validators in order to launch the 'beacon chain', and Drake claimed that he doesn't know how fast Ethereum governance is willing to move forward with the new network changes.

After initially suggesting an reduction in the supply growth to just 0.6 ETH per block, it's unclear whether a reduction in issuance on the PoW chain will be effected during the transition period, and Drake has suggested that it might not be. Scalability is one of the main reasons that ETH is switching to the new protocol, as well as the energy consumption concerns involved with mining proof-of-stake systems.

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