The community of Ethereum Classic (ETC), as well as the fate of this project, is currently a subject of different debates following the consecutive attacks to the network. The co-founder of Ethereum, Charles Hoskinson, felt obligated to step forward.
Backed by his Input Output Hong Kong (IOHK) firm, Hoskinson presented two controversial Ethereum Classic Improvement Proposals (ECIPs). First, a checkpoint system eliminating the possibility of further attacks, and second, a decentralized treasury. However, the latter is what strikes the disagreement between community members.
As Hoskinson stressed, the ETC community can no longer rely on benefactors and volunteers to hold the network. To revive the system, the co-founder proposed the creation of a decentralized treasury. Notably, Hoskinson is no amateur to the idea of what he suggests as he had successfully built a decentralized treasury before in his Cardano (ADA) project.
Essentially, a decentralized treasury allows communities to fund independent research, projects, and developments. However, to be effective, it must be implemented right from the early stages of a project. ETC, which has been running on for years, might find it hard to adapt to the sudden significant change. According to members, such change could negatively impact ETC’s hash rate.
The CEO and one of the significant stakeholders of Ethereum Classic, Terry Culver, is one of the notable personalities that are against Hoskinson’s proposal. He stressed that permitting to build a decentralized treasury is as good as admitting that the project is a complete failure. He added that ETC is a decentralized public Blockchain, and the idea of having a money tree that only works for the advantage of a few people would be absurd.
As for the problem, Culver emphasized that ETC Labs, with the help of the COOP and the ETC community members, are currently working together to revive the network. While they might be open to Hoskinson’s first proposal, which is the checkpoint system, Culver clarified that they wouldn’t agree with the second.
The top reason why the decentralized treasury proposal is not altogether welcome is that it will reduce the rewards being received by miners for their network contribution. Although the implementation might push ETC’s price upward, the block reward reduction that accounts for 20% is not a thing that can be shrug off by miners in just like that.
Currently, miners receive 3.2 ETC rewards for every block mined. If the proposal would push through, it will push the dividend down to 2.56 ETC. The cut reward would go to the decentralized treasury. However, miners can choose whether they will donate the fund, or they will burn it instead. Notably, 10% of the miners’ initial distribution would go to Gitcoin grants, while the rest would be used to fund three community-chosen projects.