Indexing Rewards and The Merge

I want to bring attention about something. Ethereum is merging to the PoS chain during September. At the application level it doesn’t involve any change to the contracts but the blockTime will change from average of 13.4s to 12s fixed slots.

The rewards mechanism is currently using an issuance per block value, that means that now the clock will run faster and issuance speed will increase on the PoS chain.

Current value:
issuanceRate: "1000000012184945188" # per block increase of total supply, blocks in a year = 365*60*60*24/13

That gets us to an effective issuance rate of 3% a year when compounding the rate to the numebr of blocks.

Current value: (after-merge)

After The Merge we will have 2628000 blocks a year instead of 2425846, which at current per block issuance rate it will lead to yearly 3.2% rate.

The effective given indexing rewards during the first year was close to 2.7% due to the effect of opted-out rewards in allocations with POI=0.

It is up to the Council to decide if to adjust the issuance rate to make it more precise to the Ethereum PoS chain.

7 Likes

Would like to have community input on this too, but putting this on the agenda for the Council bi-weekly meeting on Thursday.

3 Likes

Fully support this. Changes to the inflation rate should be an explicit parameter change, rather than something we inherit from a change in Ethereum.

3 Likes