My thoughts on issuance: 1. the problem is real 2. the direction of the EIP is valid 3. but: changing issuance also has major downsides 4. most importantly: the decision must be with the community I said a few words on the ACD call on Thursday, and wanted to expand on my thinking - both as Ethlabs co-founder and ACD moderator. In general, being able to have difficult conversations in public has always been a core strength of Ethereum. 1. The problem is real - Slashing is core to Ethereum’s security. Not all attacks are automatically slashable. E.g. a majority of validators could censor the chain through malicious attesting. It needs to always be credible to slash such attackers. The larger portion of ETH is staked, and the tighter staked ETH is integrated into DeFi, the more credibility of slashing is at risk. - Worse dilution for stakers: at low stake %, most rewards are real income. At high stake %, most rewards just offset dilution. - Economies of scale: The competitiveness gap between centralized staking providers and both solo stakers and more decentralized staking providers widens at higher stake rates. - Narrative confusion around ETH: ETH is a “productive asset” due to protocol revenue (fees & MEV), not staking yield. The staking yield also risks crowding out the emergence of other (productive) yield opportunities for raw ETH. - Worse dilution for raw ETH holders: In general, harder assets are more attractive. BTC as the only $1T+ digital store-of-value explicitly centers zero long-term supply growth as its value proposition. Counter point: Gold with 1-2% yearly supply growth has a $30T store-of-value market cap. 2. The direction of the EIP is valid - If one wants to limit the stake rate, the issuance curve needs to bend downwards for high stake %. The EIP is a specific instance of such a curve. - The EIP also includes a further issuance reduction as a second phase. This introduces minimum viable issuance (MVI) as a secondary, monetary objective of the EIP. I personally think that is reasonable, but these two aspects should be discussed and reasoned about separately. 3. Changing issuance also has major downsides - The decentralization of the staking set is crucial for Ethereum’s health. Many solo stakers are less economically competitive than large operators. A change that results in a significant drop in staking yield risks having these solo stakers disproportionately leave the staking set. - Staked ETH is tightly integrated into DeFi today, both directly though LSTs, and through raw ETH lent out for the purpose of staking. Any major reduction in staking yield thus risks disrupting a core part of DeFi. This effect is worse the more rapid and more significant the yield drop is. - Any change to Ethereum’s monetary policy resets the “monetary policy ossification clock”. Predictability of supply matters for ETH’s attractiveness as store-of-value. So far, changes are only ever towards issuance reduction, but will investors trust that that will hold true forever? - Ethereum is overall at a pivotal moment. Given the large social cost of any months-long debate on issuance, it is reasonable to argue that this should wait until Ethereum overall is in calm waters, even if it makes a decision at a later time more painful. 4. The decision must be with community - Most hard fork decisions are made by the allcoredevs (ACD) governance process. Conceptually, this is “delegated authority” by the community to the core devs. This delegation is very effective on most technical topics. For the occasional hard fork decision that is not primarily technical, this setup is however less well suited. - Issuance in particular is not a technical decision. The decision still needs to be anchored to the ACD process - core devs need to coordinate on what to implement - but the actual decision forming needs to happen on the community level. - This is easier said than done. The ACD process is flawed but well defined. A “community decision” is much fuzzier and harder to operationalize. Discussion venues like X are important, but also limited. How to have high quality community-wide discussions remains an important challenge to solve. As we are getting off the ground at Ethlabs, we are trying to find the right path for how to contribute to both Ethereum and ETH. Issuance is a tricky topic for us: Caspar and I have argued for issuance changes in the past, and for now continue to have conviction in that path. The Ethlabs team as a whole has a wider spectrum of opinions, which has been healthy for internal discourse. And of course, we also see the broad community skepticism on this topic. The ability to have difficult conversations has always been a core strength of Ethereum. Our role in that should be to productively contribute to and engage with such conversations, not to blindly run in one direction. We will iterate to get that balance right, and genuinely appreciate feedback as we do.

Imagine being on the sidelines of this growth. Billions of people don’t have to imagine - they have no access to invest in American companies. The S&P500 is up 75% in the last 5 years, and the majority of the world just had to watch from the sidelines. Tokenized stocks are changing this, and finally making financial access more open. Just a phone and an internet connection can let you own a piece of the world’s best companies.

Another important step in Ethereum's reconfiguration for the next phase of adoption. Welcome, Ethereum Institutional! We have been closely coordinating with the team and will share more about Ethlabs <> Ethereum Institutional collaboration plans soon. Exciting times ahead!

“There are two crypto assets worth more than $100 billion: BTC and ETH. In many ways, Ethereum is in a unique position. Ethereum has had a lot of success. The problem is, it had that success five years ago… so the market is saying “you won round one, but what’s round two?” So internally, our prompt has been “what does it take for ETH to become a trillion dollar asset?” There aren’t many individual trillion dollar assets on earth, so what does it take for ETH to be a trillion dollar asset? For Ethlabs, that will be one of our north stars. We’d be a bit full of ourselves if we came out and said that we had the answer today; it’s going to be a huge project for the entire community. But Ethlabs can act as the bridge. We can be the entity that goes and talks to the people that want to take on that mission. Then we can go and talk to the people that help steward Ethereum and work together to make that outcome happen.” — @adietrichs talks @ethlabs_org and a trillion dollar Ethereum on @Bankless.

very excited to start @ethlabs_org!! some thoughts: * ethereum the protocol is decentralized and now ethereum's ecosystem is accelerating its decentralization. it's like client diversity: more costly and coordination friction but ultimately the principled and resilient path. the multi-node future decentralizes both the tech and the culture. * I strongly believe principles and pragmatism are not at odds with each other. the core properties of ethereum, ultimately its credible neutrality, is precisely what gives ethereum a shot at becoming the root of trust for the world. trust doesn't scale well but ethereum's credible neutrality does. this is unique and what I'm most excited about pushing for.

I'm joining Ethlabs @ethlabs_org, a new R&D lab to grow Ethereum and ETH. The network and the asset are entering a new age of adoption, and this is a shift we cannot miss. More capital is coming onchain, both institutional and retail, through the portals of DeFi, stablecoins, prediction markets, agents, and many other venues. I want a world where this capital powers greater wealth, where the system is transparent and verifiable, while value remains private and uncensorable. This is what Ethereum, with ETH at its centre, can offer better than anyone else. This is at hand, and we need to deliver on it. In recent years, as a core steward of Ethereum Protocol R&D, the need for a tighter loop between the protocol and product layers has become impossible for me to look away from. We'll work to ensure that the Ethereum platform meets the moment and grows to become the settlement layer for the global economy. This means, for me: • Improving blockspace quality and mainnet execution, with a faster Ethereum L1, the heartbeat of the network, and a stronger transaction supply chain. • Improving the free and secure flow of assets on the network, with seamless, unbreakable bridges and composability. • Being a technical partner to innovative products wishing to leverage Ethereum's unique properties with best-in-class user experience. • And delivering without compromise on Ethereum's core properties always, wherever our mission takes us. We're excited to get started and I could not be more grateful for the support we have received from our funders. I am reminded today that we are surrounded with immensely talented and incredibly supportive builders, core devs, allocators and investors, who all share the same passion and care for Ethereum. Ethereum is a special network, in a special ecosystem. Please reach out to chat and learn more, and let us know your interest in joining our mission with an email to join@ethlabs.org

We just announced Ethlabs (@ethlabs_org). Its mission is stewarding the growth of Ethereum and ETH. Here is why I decided to stay in Ethereum after four years at the Foundation. We are at the moment Ethereum was built for. Adoption is here. Blokchains are being adopted as the most efficient financial rails and the traction of the very innovative financial services built on Ethereum, is accelerating fast. Ethereum is best positioned to become the base layer for worldwide finance. It is unrivaled in credible neutrality, permissionlessness, and robustness. The core protocol is now steadily increasing its throughput and speed to meet demand. Ethereum’s application layer has the largest developer base and most institutional adoption. The contest now is on product and growth: improve user and dev experience and bring Ethereum’s apps and assets to more people. At Ethlabs, I will focus on growth by: - Supporting Ethereum’s builders. - Improving infra and standards for devs, builders, and institutions. - Increasing distribution for Ethereum’s apps and assets. Throughout setting up Ethlabs it is incredible to see how much support we have gotten. So many of us want Ethereum and ETH to succeed. Largely thanks to the ecosystem’s size, force, and culture, it is now positioned to be an enormous improvement to the global financial system. That’s why I’m staying in Ethereum and that’s the work I want to do. Interested in joining? Go to join@ethlabs.org. Today is truly an Ethereum moment, thanks to all our backers (@BitMNR, @Sharplink, @ethereumJoseph, and so many others) and the entire Ethereum ecosystem!

I'm incredibly excited to share that we are launching Ethlabs. The core belief: This is a unique moment for Ethereum. Adoption is here, the global economy is moving onchain. We want to help Ethereum realize its potential and become the shared global settlement layer.

Over the last couple of weeks a lot of my Friends and Colleagues left the EF. ALL of them are very CROPS aligned and have been in Ethereum for a long time because they believe in the vision of a self-sovereign future. I reject any assertion otherwise!

"I really think Ethereum's best time is yet to come." The first decade of smart contracts was about building the infrastructure. The decade of real-world adoption has started, and Ethereum's role has to change with it. @adietrichs of @ethereumfndn on the Main Stage at ETHConf.

An exciting initiative is launching: The push for shorter slot times in Ethereum! The idea: Instead of a one-time change, parameterize the slot time and treat it similar to the gas limit - continuous performance improvements over time. And again a beautiful website!