Unchained - EIP-8363: Should ETH Be Sound Money or a Productive Asset?

Episode Date: August 20, 2026

Ethereum wants to slash staking yields toward zero. Gitcoin's Kevin Owocki, DV Labs' Oisín Kyne, and Ethereum-France's Jérôme de Tychey debate whether that breaks DeFi. ======================================================== Thank you to our sponsor! ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Visit⁠ 1inch.com⁠ to swap tokenized securities, crypto and more. Simple. Secure. Self-custodial. Whatever asset you’re buying - swap it at⁠ 1inch.com⁠ ======================================================== Ethereum's core developers are considering a decision that could cut ETH's staking yield toward zero, and DeFi's biggest names are furious about it. Jérôme de Tychey, President of Ethereum-France and a co-author of EIP-8363, joins Kevin Owocki, founder of Gitcoin, and Oisín Kyne, CEO of DV Labs, to argue through the proposal's tradeoffs. Aave's Stani Kulechov, Ether.fi's Mike Silagadze, and Joseph Chalom have all pushed back, warning the change guts DeFi's biggest source of yield. They cover the Nakamoto coefficient and why a 51% staking cartel could censor blocks for free, why solo stakers could see after-tax income collapse, and why Oisín is skeptical of an enshrined liquid staking token. Jérôme defends why Ethereum can pay stakers less and still be more secure than rivals boasting 7% yields. All Core Devs meets Thursday, August 20, and the real deadline lands October 26, when the network decides if EIP-8363 is mature enough to move forward. Host: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Laura Shin⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, Host / Unchained Guests: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Kevin Owocki - Founder of Gitcoin ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Oisín Kyne - CEO and Co-founder of DV Labs ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Jérôme de Tychey - President of Ethereum-France Timestamps 🏛️ 01:38 Jérôme lays out EIP-8363's validator reward burn curve 🔥 08:02 Oisín on why a 51% cartel could censor blocks for free ⚖️ 10:39 Jérôme's rebuttal: finality security versus censorship risk 📣 14:38 1inch: See how Aqua's shared liquidity pools work at https://1inch.com/aqua 💼 16:13 Kevin on Aave, Bankless, and DeFi's backlash to the burn 🧾 33:18 Why solo stakers could see after-tax income near zero 🏦 45:39 Does killing ETH's yield scare off institutional buyers? ⚛️ 51:03 Ultrasound money versus productive asset: ETH's identity fight 🔐 56:41 Why Oisín is skeptical of an enshrined liquid staking token 🥇 59:34 Can ETH's shrinking yield compete with Solana and stablecoins? 🔮 01:05:27 Post-quantum costs, and when All Core Devs decides EIP-8363's fate Learn more about your ad choices. Visit megaphone.fm/adchoices

We don't really have $100 billion of security. We really have $5 million a day at the current curve. And depending on what people think about equilibrium, but this new one, it might be $1 million a day or less. And I don't really know if that's enough to protect a kind of a trillion dollar computer like we want it to be. Hi, everyone. Welcome to Unchained, your no-hyper resource for all things crypto. I'm your host, Laura Shin, newly back from vacation.

Thank you so much for joining this livestream. First, we'll start with a quick word from this long time. This episode is brought to you by 1 Inch Aqua, the shared liquidity layer from 1 inch. Back multiple liquidity positions with one wallet balance, and keep your tokens in your wallet until a swap fills. See how it works at 1inch.com slash aqua. Today's topic is EIP 8363, the Ethereum Improvement Proposal about EF issuance, which has kicked up some controversy. Here to discuss are Kevin O'Waki, founder of DeV Kine, O'Sheen Kine, CEO and co-founder of DV Labs,

and Jerome de Tichet, president of Ethereum Foundation. Welcome, Kevin, O'Sheen, and Jerome. Thank you for having us. Welcome, everyone. I'm the president of it from France, not of the foundation yet, but glad you made the decision. Oh, did I say the foundation? I meant to say France.

I meant to say France. Yeah, it's two separate entities, but we like each other's. Okay, okay. Sorry, that's probably some jet lag brain. All right, so Jerome, since you are actually one of the authors of this EIP, let's have you start. Explain what problems you're trying to solve for with EIP 8363. Sure.

So we today have a curve that rewards the validators. So if you put EF at stake, you become a validator and you get rewarded. And under today's curve, the more. if is staked, the more if is printed. We print new if to reward the validators. And there are incentive to stake that never really switches off. The reward continue to appear and to pay whatever the staking ratio is. How many if are at stake? So at the same time, every holder that doesn't stake pays for the staking through delusion. And thus, we want to implement a mechanism that burn a rising portion of the validator rewards so that as the

staking ratio climbs, the reward actually gets lower until the markets find its own level with the market find and equilibrium in terms of staking. So that's the that's a proposal in itself, a burn that grows with the staking ratio. So the reward stappers towards zero at around the level of help that if at stake. And in practice, the market stops well before that, at whatever yield stakers required to participate. And staking remains attractive when participation is low in our model. That's overstaking stop being subsidized. And thus, it's also stopped the dilution that the holders are facing above certain levels. And so why did you come up with this as the best solution?

Yeah. So there's a in the in the this there's a a couple of things we should, we should clarify. There's a the max issuance level. That's that's one of the thing because the curve itself has a maximum issuance. There's also the transition period like how fast does this change gets implemented. There's also the ultimate level, like at what rate and do we even reach zero in terms of rewards? And yeah, I think the shape of the curve itself that can be discussed. So we took a different thing into consideration.

So there's probably like four to five years of research on the current state of the curve and how we should modify it. It's, well, we're building on top of research for many different researchers that I won't name them all. But we have research backing that the minimum viable issuance of Ethereum should be around 0.5%. That would be the minimum amounts that we have to issue so that we guarantee our economic security and pay for our economic security budget.

And this boils down to 0.5. So first, we selected, a curve that match this minimum viable issuance of 0.5. Then we targeted the ideal staking ratio, which sits between 20 to 30%. And so the payout is maximum around this, the value of the issuance is maximum around this range. And then in terms of making sure that the market actually finds an equilibrium,

and we avoid also to go. beyond 50% at stake, the curve tends towards zero and reach zero around after 50% of if at stake. So that was also one of our reasoning. We wanted to make sure that we never crossed the 50% at stake level. And I think finally, if I'm not mistaken, whatever, whatever, yeah, transition period. We wanted to make sure that also this transition doesn't happen from one day to the next. Like, okay, EIP has now proposed. Maybe it will get considered. And, then it would get scheduled, and then EgoTago's live, and then suddenly we go from this amount of yield to a much lower amount.

So we didn't want it to have this kind of extreme transition from one day to the next. We chose a pretty long transition, ready to argue if it's long enough or not long enough, but between the time that this proposal gets discussed right now and the time that this proposal gets in full force, they will be a period of a year and a half, to two years, like 18 months kicking in for sure after the life and probably a little while before we get a final date for the implementation of a good app. So we picked the different things that we considered from the research side, from our perception

of how the market will react and how the industry will react, sorry, try to come up with the best of the world. And now we are getting feedback on what we've missed, what we should consider to adjust the pair of and also what kind of adjustment we should we should make in the short and long one. Yeah, yeah. And you're getting a lot of feedback, actually. So let's actually move to that. So I would say that, you know, what seems to me, and again, so I was on vacation, so I didn't see this in real time, but it feels like, so first of all, a lot of people in community are against it. It even feels to me like it's kind of mostly concentrated amongst the business people in the community, which is funny because in my book, I talked about sort of the business

people versus the devs. That was a whole controversy in the beginning of Ethereum. But I feel like I kind of see this over and over again in crypto. But, you know, Oshin, you were one who wrote a very detailed critique. And it wasn't even like a complete critique. You said this. It's just like some of my thoughts. So go ahead and, you know, give us your top line thoughts on why you oppose this proposal. Yeah, happy to. So the main reason I'm not super happy with at least the current proposed curve is this idea of it like going to zero. And particularly I want to highlight that there's like more than one ratio like metric that meet like matters free theorem security. But Jerome is like put up in front there is this idea of finality. So,

it's like we have this amount of eth and that will be guaranteed burned if this transaction like ever becomes undone ever changes. And I agree that the research there says, you know, tens of billions of dollars getting destroyed is probably enough disincentive at this part of the world. Where I think we kind of diverge in opinions is that's not the only thing that can go wrong with Ethereum. We also have this risk where the people that are staking their eth decide to be particular about what they will include and not include in a block. And they can say, we're going to only attest to block that do what we want, that don't have, you know, people we don't like in them. And if they do that, there's no penalty. So long as there's 51%

of them are more doing it, it costs them nothing. And the like, like plan we have is like, oh, no, maybe we'll coordinate as a group and we'll like destroy all their ether for doing so, but I think that's a very big risk to kind of hedge all of Ethereum security on. And I don't really think we should be sacrificing, you know, this type of resistance to censorship for the staking ratio. The kind of fancy word, and you maybe hear me say it again, is like Nakamoto coefficient. It kind of come from Bitcoin, but it's this idea of how few orgs make up 50% of cash power state weight. And I can talk about lots of other things, but I think that's the kind of main one is that we don't really have $100 billion of security. We really have $5 million a day

at the current curve. And depending on what people think about equilibrium, but this new one, it might be a million dollars a day or less. And I don't really know if that's enough to protect a kind of a trillion dollar computer like we wanted to be. Yeah, like basically, the number of entities required to kind of control something or sort of break the system or just, yeah, make it much which were centralized is already like kind of low. So yeah, anything that centralizes it further is a bit risky. But I'd love to, so before we go to Kevin, I don't know of Jerome if you want to respond to that. Yeah, well, I have lots of response to that.

And I also spend some time reading Oshin's post and gave a full on written response to his comments earlier today. a few hours before. I was kind of back to back today, so sorry for the delay. I'm trying to get an answer to everyone one by one. So I'm currently around the comments number 25. So we have like 180 comments. So that's a lot of reactions. But I want to commence first on the fact that when you said,

everybody is against it. That's not really the case. Like people that write about it are kind of, there are some people that are pro it, pro-EIP change. Not the majority that people are writing, but that's normal. Like, we are getting feedback from people that are looking for answers, that are looking for comment on clarification, or that just log in and say, like, I hate this, don't do that.

But that was the case for every single changes that we did in the best regarding the AFRM issuance. So it's not a surprise. And the people that came to speak against it in first place are where people that had their business more or less directly affected by this. And this is expected as well. So we're not trying to hide it. It's a contagious proposal, but it's also worse having this discussion right now. And now specifically on the security side of things, security is a spectrum from the Ethereum perspective

and from the blockchain perspective at large. So we need to consider different level of attack, different type of attacks and how we protect against them. I'm not going to say that what Oshin tried to put out is wrong. I honestly think it's true indeed. How much it costs per day to bribe or coerce different validators to not do something or to do something specifically is rather low in the range of a couple of million per day. So depending on how much is at stake, how much is how much money you can divert this kind of attack.

The couple of million per day may be not that much, considering that we want to be the network that's secure the future of the settlement of the world. But nevertheless, there is also the security consideration of how much it's, it's, how much is needed to revert finality. And our EIP mostly focus on this side of the security spectrum, making sure that we maximize this. Because from my understanding, maybe, well, Ocean, you can tell me if I'm putting words in your mouth or not, it's like the second part of the thing,

like the security of how much it costs to prevent someone to write a transaction or to not include the transaction and so on. This is something that will always be lower than our big security thing for a big security budget for preventing messing up with the finality. But also this is something that mostly DVD tax and fossil are taking care of

for which I both support and I don't think the issuance is something that really can influence on this specific part of our security. But I hope we'll have the chance to discuss also the Nakamoto coefficient and concentration effect because I think also our views on what's the state that we should wish for is a bit different, you and me on the matter. All right. So in a moment, we're going to turn to.

Kevin to talk a little bit more about the business community reaction, but first we're going to take a quick word from the sponsors who make this show possible. $540 million. That's how much concentrated liquidity sat idle in a given week in the first half of this year. About 30% of the Defi TVL, if you're wondering. That's according to Dune Research commissioned by One Inch, but there's a solution. One Inch Aqua is the new shared liquidity platform. It lets LPs back multiple positions with the same token balance and keep their tokens in their wallet till a swap comes. Why does that help? Because the LPs don't have to split their tokens across positions. They can cover more market conditions and pairs with their full balance. That means more activity across deeper liquidity.

See how it works at one inch.com slash aqua. Remember that providing liquidity carries risk and fees aren't guaranteed. Back to my conversation with Kevin O'Sheen and Jerome. So as we mentioned earlier, a number of business leaders have opposed this proposal such as Donny Kulachov, Mike Silligodzzi, Joe Shalom of Sharplink, and Shalom's article had a succinct header. It would undermine defy and defy as Ethereum's superpower. So suffice to say that a lot of entrepreneurs have made business decisions on this yield. You know, I heard on the chopping block they kind of compared this proposal to how a central bank might come out and make a decision that has a lot of economic and business consequences.

So Kevin, you know, I'm curious to hear what impact you think this would have on the different businesses in Ethereum and DFI broadly. Yeah, thanks, Laura. Well, I'll just say before I answer that I'm undecided about this EIP and I'm trying to contain all of the feedback and discussion in my mind, which, you know, I think is a feat in in itself. But it would suffice to say that the business. business community has had a lot of strong feedback about the proposal.

Stani from Ave said he ran the math, and if validate our income falls from about 3% down to 1.5%, that's a 50% cut. So does a more zero yield regime accelerate the capture that this EIP is meant to deter? Does this kill the case for borrowing ETH? Does it create a tax landmine? Those are some of the feedback that we've heard from the business community, Ryan Sean Adams from Bankless called this Dead in the Water. So I think this is valid feedback

and what I want to talk about for just a minute here is how does the community come to consensus about whether or not this EIP goes live? And I think that with EIPs like this, there's not one right answer. This is not an engineering problem. This is a political economy problem. There's sort of like a quantum superposition of possible solutions for what the best issuance

of ETH is. And I think that these camps are in a debate about what is, ETH. Is it ultrasound money? Or is it a productive asset that can be used in in in in DFI? And so the political economy has to come to consensus before the next fork about whether this is going to go into Ethereum mainnet and the debate has been stuck for about the last two years. These camps have not moved from each other. And so a quick primer on Ethereum governance. Ethereum has off-chain governance. There's a meeting called the All-Cordead. in which they try to come to rough consensus about which EIPs are going to come into the network.

And ACD has never really passed something with this level of contentiousness or like active pushback or conversation. There's a precedent for controversial things being killed like PraguePau was a thing that was killed many years ago. And so I think the question is who makes the decisions and how and how do we come to rough consensus about this and how much will the core developers risk fissures in the community in order to pass this EIP. There has not been a major fork of Ethereum since the Dow Hard Fork.

And so the real question is what happens in all core developers. All core developers meeting number 185 is scheduled for Thursday, August 20th at 1400 UTC. So that'll be the thing that you want to tune into to see if this passes or not. But it would suffice to say that there's a lot of active discussions happening right now. they'll probably reach a boiling point around ACD this Thursday. Oh, okay. Yeah, we'll get into that a little bit later as well because people also had some issues with how this was proposed. So I know we touched a little bit on like the ways that this could potentially centralize the network.

O'Shee, I don't know if you felt like you were able to kind of fully lay out your thoughts on that or if you wanted to add anything. I may just add two quick things. One to highlight something that Jerome Norris said is that none of the debates here have any chance of us changing what the Ethereum says, as in like printing extra ETH, changing someone's balance. That's controlled by who runs full nodes. And anyone would see that like happening. So that's like not one to really worry about.

The only two, you know, ones we're arguing about the importance of is whether or not a transaction could ever be undone when it's not supposed to be, or whether we can block someone from using the chain. That, and then the other thing I'd note is that Jerome pointed out that the researchers said that we need about 0.5% of issuance per year to stay secure. I agree. I think if we stopped at 0.5% issuance and didn't cut it any lower, this would be much less objectionable proposal.

I think this idea of cutting it to zero is where most of the negative effects come in, because that's where, you know, an entity that has 40, 50, 60% of ETH, which I won't name, could just drive the issuance to zero, and it would cause pretty much everybody else that's a rational actor to leave and they'd be left, you know, controlling the majority of the stake. And I think that's kind of what we're, you know, facing at the moment. Okay. If I may react, go ahead. It's great that we're having this kind of discussion because, like, for example, I had the pleasure to speak to

Mike from Yvesi and a few others have spoken to here, and he now has a much more nuanced view on the topic. I hear you that, okay, well, that's consider 0.5 and see if we, let's see what we get, if we can do 0.5 all the way through from 0% of the sticking ratio. And I think the discussion that we are having right now on the Fred, or if magician, is very productive in a way that we get more informed as the offers of what's acceptable, what's not acceptable, was not acceptable and what kind of thing we missed,

what kind of thing should be added in the consideration, in the tracking of the loading out of the thing and so on. And we will necessarily improve this proposal. One thing you said Laura initially on, it's like if a central bank decided to break everything, central bank have clear targets and they are doing really small adjustment at regular quarterly meetings and so on.

In here, we are proposing a transition that will take a couple of years to roll out, but this is aiming in a direction. And I think businesses that have built on Ethereum, that have built on the yield of Ethereum and that are coming now to shout and say, like, no way over my dead body, it's not a good justification from them to say, like, we have chosen to build depending on the seal, then now you're touching the seal. because the curve and the issuance and overall how the consensus function on the Ethereum

was bound to change since we announced Lean also. So we know that there's going to be evolution and we have a history of modifying our issuance policy always downward, but still we have a history of doing so. So it's not necessarily something that I foresee as a receivable argument again. against the case. And regarding killing the borrowing case for Eiff, well, when you are out of the DFI space and you are looking at the lending market

as a repository market, a repo market from a threat five perspective, and you said, oh, the usage of the, there's lot of people borrowing EF, well, isn't that people shorting if? That can be also received as a red flag. So if we tapered the borrowing case for EF, it's also pretty good for the asset. would say. So I don't necessarily think it's a bad thing to stop subsidizing the yield over a certain

points because we would be just paying too much for our security and at the same time we'd be protecting the value of assets. All right. Well, let's have you also address some of the, I mean, you started to talk about that in terms of the central bank comments, but I do just want to hear you address these concerns that it could have a big cap. cascade in defy that's detrimental to a lot of services such as lending, like fixed income, even just DGens who like to loop might be hurt by that. So, you know, there's been a lot of talk about how this would really hurt defy. As I mentioned, you know, Joe Shalom's comments.

So what's your response? Yeah. That's, I have to be completely honest here. We don't have a cascade model. We know that this will have an impact. We know that the impact will likely be a lower staking rate. Sorry, the impact will be that the staking ratio is stabilized and the yield at equilibrium will be lower.

So necessarily, the looping part of the defy will likely reduce. How much it will reduce that we don't know. But we want to take a transition, a quite long transition, to make sure that the impact is not like, boom, everything explode. This transition will bring the tapering in a slow way. But also, I have invited the different venues that will be impacted to reach out and to collaborate. Let's build this cascade model. Let's discuss the parameters.

And let's try to converge to something that makes sense. So that we can actually deal with the Enhofer. but we cannot with our resources and also with the amount of publicly available information make wide guesses on, oh, this is what the cascade model will be, this is what the thing will be. Nevertheless, someone that has 50K in stable coins and put that on Ave and borrow if to start looping it in order to earn on the yield of Ethereum, earn on the dilution of each holder, each holder person. Sorry. Yeah, it is a pretty behavior.

And I don't think this is buying extra security for Ethereum at this stage. And it's also putting a weight on every holder's food illusion. So that's maybe not something we should continue to subsidize. And wait, so your models say that most likely the equilibrium of ETH staked would somewhere between 30 and 40% if you implement this? Is that what it was? Well, the amount of EFAT stake post EIP, if we reach 50%, it's zero. So the market will stop before that. Difficult to say exactly at which amount, I think it will stabilize around 40 to 45, something like this. I don't know, Ocean, if you have a wild guess in your mind. With the new term, what would be

equilibrium? I've been digging into the research on your EAP, and mine is 45 to 49, so 10x lower. So then the yield on that would be what? Like, where do you think it would level off? 0.4% APR. Jerome, do you agree with that projection? Yeah, at this amount of equilibrium, I'm checking the map right now, so I can give a proper answer.

If we are at, sorry, here it is, if we are at 45%, we are at 0.3% yield. If 45% of the EFI at stake, we will be at 0.3% of yield. And Kevin,

do you have thoughts on where you think this will all level out if this proposal gets adopted? I think I'm interested to see if the different tribes can build consensus about the right rates and you could see what happens in in sort of traditional legislation is that you'll take

two different bills that are apart from each other and you'll sort of blend them together and so I'll be curious to see if there's any consensus that can be built and I don't think that the all core devs are going to push this through if there's this much dissent without

amendments but that's my guess Okay, well, like what I was trying to get at is so if we if we can kind of project out where we think the staking rate will end up, then we could, you know, back into like then what will the yield be and then map out like then then probably, you know, gauntlet or somebody would do like a bunch of Monte Carlo simulations of kind of what exactly would happen in these different defy sectors that looks like that hasn't happened yet. like presumably wait. So yeah. So if it's going to end up where you guys are projecting, then I don't even know, would that be like one tenth of the activity?

Or what fraction of activity do you think we'd end up with? Oh, it's not a question of activity here. It's a question of sticking appetite in this case. like currently but I've been at DFI. Well, do you do you well like I'm seeing

like it's so let's say I actually don't know what the what the yield is right now but let's say it's 3% and if you're saying it we end up at 0.3 then wouldn't DFI shrink

you know to 1 tenth of what it currently is or I know it's not exactly like that but you know just for simplicity's sake is that how to think about it unfortunately the G-VOL is in

the details here. Look, clearly, let's take a step back. What is the minimum yield for which anyone will stake? If you pay me, what Ocean just says,

I think it's a good receivable estimation. Maybe people will continue to stake until they get paid 0.3, but if you pay them less than 0.3, they will stop. Well, what that means is that our staking ratio continue to grow towards that number. And if we have a curve that cannot reach that number, which is the case right now, the curve will reach to the minimum 1.5, like five times a wide guess on where it should land. It's just a constant pressure for people to continue to go

at stake. Now, regarding the activity, defy activity, we used to we used to get excited about a vanity metric that is TVL. Okay, okay, we just look at TVL. We just count the same if being looped multiple time or the same derivative being counted several times with the different principle being double counted. And we said like, yeah, activity is good. Look, we have big TBL.

So what matters is the volume. What matters is how much transaction is being done on taxes, how much backing forces are being done to collateralize, recapitalize, recapitalize, move positions, and so on. That's the activity that actually bird Eiff on Ethereum.

That's actually a good thing and so on. I highly doubt that reducing the attractiveness of staking derivatives and looping strategies that are beyond that are going to be a costful for the network.

It's actually a pretty good thing. Taking the central bank parallel when the principal funding rates of the central bank is super high, all the money goes there, because that's the best thing. Like, it's almost risk-free and everybody wants this, and nothing really can compete. If you start to lower this rate, then other assets that are, in some, perception, more productive,

gets attractive as well. And as we, if we don't change anything, let's look at the status quo. If the reservation yield is that low of 0.3, then what it means is just, just, we are just going to continue the growth of the staking ratio to 50% to 60%. The reason why we kind of not rushed, but make sure that this EIP gets discussed now is that by 2028 we will likely reach the 50% mark. And it's just uptrend beyond that. And if the reservation yield is that low, we're going to just continue to push more if to go at stake.

And that's not really good for the market depth of EF. That's not really good for people that are purchasing EF and want to make sure that when they sell them, there will be no big slippages. It's not good for the acquisition of new holders either. So I think that the time is now in that respect. So also actually talk for a second about solo stakers because there has been a lot of discussion about this. There's concern that it would hurt solo stakers because, basically the thought is their after-tax income would drop up to 77% for a home validator. As far as I understand, I guess the gross rewards are taxable, but then the burn would eat up

their profit. So Jerome, you know, do you have thoughts on that concern? Yeah, absolutely. There was a misunderstanding in how we phrased the EAP itself. some early analysis from people that wrote the EIP maybe too fast or maybe missed the point is that it's not we give you one and then we take five. The one never really reach your activable balance. So some critics that say like, hey, if you if under the new regime, you give me one and

you take five, I still have to pay taxes on. the one. Well, actually, the five doesn't even reach your balances. It's similarly to when we do any, when we do a E.159 burns, your achievable balance never, never received the rewards before the burn. And we can, we can change the wording if this is a, this is sensible and so on. Now, nevertheless, on the tax situation of the solo stakers, it's a very meaningful, meaningful problem. Let me try to explain it a little bit more in detail. So as a solo staker, which I'm solo staking since Genesis, I'm getting currently a 2.5% yield. This 2.5% yield is a taxable event. I have to pay taxes on this. In France, it's 30% of 30% flat taxes in other regions.

Like in UK, it's a similar and so on and so forth. You can compare with all the major regions. normally when you receive a yield, it's a tax-leveling event. So the rational behavior regarding this tax is to consider your yield as a tax-adjusted yield, which is completely different from one region to another. We're not arguing against that. But what that means is that your yield is probably 0.7 of what you get. And then you have to consider that your yield is also delusion-adjusted, because when we print, we print on top.

of the whole supply. So if the issuance is 1%, you're getting diluted by 1%. So if you're taking 2.5 and you're paying 60% of taxes and you're also being diluted of 1%, well, as a sort of stakers, your reservation yield should be reached pretty fast. And that's a total concern. Like, we did not do a good job initially with the publication of the EIP on explaining where we stand regarding the solo stickers because it was perceived that we argued strongly that our proposal was going to save the solo stakeholders. It's not going to save the solo stakers.

It's giving us a shot at making them still sustainable at certain threshold. And it's also giving us a chance at, I think, them all out, like the current status quo will lead us, but in a better situation in terms of the network. What I mean is that the current curve is also pushing the solo stakers at a arguably faster rate. And we'll end up with also no solo stakers at certain threshold, but a much higher dilution for everyone. What can save the sort of stakers is an easy burn, which is a topic that's actively being researched, and I hope

that it would be published in time for Ice Star, the forecaster hegotta or later, and also anti-correlation penalties that O'Shertyne has decided to champion, and I'm very glad that you are bringing back this topic. Yeah, so I don't remember where I took down this note, but I think it was maybe from listing to bankless,

but I guess there are some solo stickers that said that if the yeath, if the yield on ETH drops to 2% or lower, then they won't remain as solo stakers. So, you know, if you guys are projecting this to drop to like 0.3%, then that definitely means that there's going to be this whole category that will likely reduce sharply,

if not, you know, be eliminated. But one other point that I've heard is that this could basically just drive people to stake through ETS and custodians. And this kind of goes back to O'Shea's point about, the Nakamoto coefficient and like the number of entities that could collude

to kind of control the chain in some fashion. And frankly, it's also against crops principles as well. So yeah, I know I keep asking Jerome to respond to this,

but any of you can talk like as the author, it makes sense that, you know, it's natural to know what you're, who wonder what you're thinking. But, you know, any of you can kind of respond to that

on, you know, whether you think that possibility is a likely outcome or, you know, yeah, what you have to say to that. I might have a go and give Jerome a break. So I'm glad to hear him acknowledge that like the framing on this IPEIP wasn't maybe so hot when it comes to solo stickers. While he highlights is absolutely real, solar stickers get a raw deal here in terms of they're getting taxed as income all along. whereas if you hold like a wrapped LFT,

you pay cap gains years from now. So you can kind of compound at a much better rate and it's definitely more effective. I think, you know, what caused contention, and I was one of them like, you know, with my calculator being like, wait a minute,

if we do come down to 0.3% APR, it doesn't matter what your taxes are. You don't cover the electricity costs or whatever the case of AP is. I think what would be really more effective to try and solve this solo staker versus like delegation problem is something that the proof of stake alliance used to advocate for as like policy in the US,

which was to get staking rewards, taxed as created income as opposed to what they currently are. And the analogy here is that a baker doesn't pay taxes when he bakes his bread, he pays it when he sells the bread. A fisherman doesn't pay taxes when he catches the fish, he pays it when he sells the fish. Ethereum stakers shouldn't pay. taxes when they earn the ETH, they should pay it when they sell the. If they did this,

it still wouldn't be quite the same as LSTs. Cap gains is different to income and like all sorts of different things, but it would have quite a lot with this disparity because the current proposal doesn't really make it better, but it is, it is a problem. Like you are that the calculator that you showed there pretty much you can name your ratio and equilibrium and whatever you want and you're almost always better off delegating, except maybe, in this worst case scenario where your delegator gets slashed or fails or whatever happens. Yeah. If I may come back to your word, Laura, when you said, some sort of stakers are saying,

if you go below 2%, I'm out. And that's a concern, of course. Definitely. And all of us, we have a reservation yield at some point. I'm like, yeah, I just receive an update that I should, from Lighthouse, I should put my nose up to date now. So I'll spend 15, 20 minutes doing my maintenance to, you know, I'm doing my job. I'm a happy network.

So if you say it's 2% amount. At current regime, it's 58%. Like, oh, wow, 58%. It's coming really fast. Well, it's coming in a long time. We are just at 35 right now. That's all right. But the entry queue has been full since the SEC gave its guidance in May 2025.

and it's not going downtrend. And as you get more dilution, as a holder that is not staking, your incentive is to stake now, like fight against the delusion. So there's actually a real concern that we are just going to continue to grow. So let's say this person that's want to be out at 2%, well, at 58% staking ratio is out. What's left in the network is one few sort of stakeholders and maybe a bunch of them that are in the same category.

But at the same time, we are down with way less sort of stakers and a much higher issuance. We have an issuance of 1.1. And that's how the current curve may allow for the survival of certain set of stakers by saying, yeah, well, you have an operational risk. That's all you have as a sort of staker. And if you decide to go with an LSTO derivative, you have the operational risk of the operator, and you have all the governance risk and smart contractors linked to those entities. So maybe for them, this extra type of risk can be compensated and they will stay.

So what we meant to say regarding the sort of staker is the following. The current curve is a much worse situation than the curve that we propose because at least if all the stakeholders are out, we'll still have a lower issuance. and some of them might very well stay upclothes. While under the current regime, it makes just sense for them to leave and join something else at a certain stage. And this is a centralizing effect indeed,

because when you look at how, well, that's how we want energy burn alongside of this proposal, we want to make sure that a low impact, low portion of the validator set can actually have the same competitive advantage as bigger players. Otherwise, you will just go to the biggest player because you can play some time games. He can get most of the MED.

His return is much better. So you have an incentive to pick the biggest one, but also the biggest one can be perceived as too big to fail. So you just stake with the biggest one because you want to minimize your risk of having operational risks. And, you know, it's definitely something that we want to avoid. and I'm happy to walk the Nakamoto coefficient next if you want ocean. Maybe before then, if you wouldn't mind, Laura,

one thing that I think we should mention of like data points from other proof of stake chains. There's, you know, five or six maybe large, mature proof of state chains out there. And most of them don't have any slashing. So they don't have this kind of risk that is present Ethereum, where you may lose all of your principal. And five of them are usually on 70% staked, but many of them are in the like 50% to 50% type of stake. So I think, while I do think it's very possible

that we can get up towards 50%, I think every kind of 10 beyond that gets less and less likely, especially if we see something like a mass slashing or a compromise or something. I think people will like chill out quite a lot more. And it's also taken us approaching six years, to get to 36%. While I know we've had a big influx now,

we had the Dath and Tom Lee and, you know, a very kind of strange, you know, year of like large accumulators, I don't think we will see that for the same level. And so like I agree with Joan says, like we should wait for MevBurn. I think we should ship MevBurn and, you know, we should consider this at Leam,

we should consider this, you know, when we have a lot more inside, like, real-time proving and like BK-EVM is all already a big one that people are eyeing up and, you know, we'll have quite a lot of expenses with it. So I think this is a bit early more than anything. Okay. Yeah, before we, so I definitely want to get to some questions, but I just want to talk about one last constituency that I saw called out as potentially being heard, although I guess it's more that it's a theorem that would be hurt because this constituency might not be as interested. And that Stani wrote in his essay

that he felt that this proposal would effectively make activity on Ethereum uneconomical. And he said that that would be, quote, a negative factor for any institutional buyer who would be considering taking an ETH position instead of other networks with predictable cash flows. And he said this uncertainty has a significant adoption cost. So do you agree with his contention that potentially this would hurt institutional adoption of Ethereum? So Jerome, you very visibly shook your head, no.

So go ahead and explain. No. No, not at all. Well, I think from, look, Sharpling did indeed make a statement on the matter. So that's, they express themselves. The research of Grayscale published a couple of pieces as well, welcoming the discussion notably.

Although the ATS and ETF have yet to express themselves. Now, let's... Wait, wait, I'm just right, but when you mentioned the Sharplink essay, like, he does make the point in here that he feels like institutions choose ETH because it's a productive asset. So I don't know why you mentioned... Like, basically, they are agreeing with Stani, it seems like.

Absolutely. Absolutely. They are agreeing with Stani. And the very next day, they announced a partnership with Galaxy to open a defy-fond, mostly focused on staking. And the day after, they announced that they are going to send a $200 million worth of EF to Lido. So I definitely guess they are considering that, yeah, this is impacting their decision on putting their asset into a specific strategy. But I disagree with the framing of this is bad for institutions.

For example, the position of gray scale is much more measured. When you are setting an ETF or we are selling a DAT on If, you are convincing people that If has a feature, if is going to raise in price or at least hold its value, and you are sprinkling on top of this a coupon. Say, oh, I have some yield. Look, it's a productive asset. It's a productive asset because I'm staking.

It could be a predictive asset because I'm doing an equity providing, I'm doing all kinds of shenanigans on defy, or no, I'm picking the lowest risk possible, something that dilutes everyone and that adds little security, but that sure is yield. When you are an investor at the other end of the spectrum, you are trying to get the narrative behind that. You want to hear, why would this thing hold its value?

Where is the yield coming from? And pretty soon, the delusion question, arise because those investors are sophisticated. They know that the dilution is something real, so they do division adjusted. Then they look at what is the direction. Is it going to keep on at

this rate of 2.5 or is it going to go lower? What is your plan against that? And I feel like it's some some ETF and DATs that we have talked to not shopping, but the other ones are like, yeah, I have a problem in my narrative regarding the principle. I need to

explain that this thing will hold it value. And when you are an ETF ODIAT and you declare like consideration regarding the issuance with hurt DFI, we don't want that, you are also saying that things that will improve the narrative regarding the storage of value of your assets are not an urgency. It's not it's not something that we should consider now. And at the same time, you are pushing the narrative that the best use case for if is just to go at stake and stay there, which is not really good for the activity and certainly not good for adoption at large. So it's not the best, it's not the best framing, I think. Tom Lee, for example, back in late April or May, I don't remember exactly once, said,

like, oh, we would, we would wake up a discussion regarding issuance. It has to be taking seriously and so on and so forth. And I don't think it's very productive to go out again and say, like, we don't want this, don't do this. We are, instead. welcoming feedbacks and trying to improve our proposals. So it makes sense in terms of the narrative of EF. But if the only use case for EF is to go at stake, then we should completely reconsider our security assumptions and how the B-Cension behave

and also tell the people that are pushing for everything going at stake that under Linearity and ZKVM, this doesn't work. And this is happening in the next three to five, four years. Okay. Yeah, I want to. What I mean is that if we are going to have this discussion now, we are preparing for the next upgrade at the same time. And this is long-term thinking. Okay.

Yeah. So you pulled on attention that I feel is kind of like underlying this whole proposal, which is basically, it sort of feels like it's intended to help regain its position as ultrasound money. And then, you know, all the people that are against it are saying like, this is hurting ETH's ability to remain a productive asset and those, you know, just

maybe, I don't know, is it possible to have both at the same time or are they always going to be sort of diametrically opposed? And, you know, I'd love to hear all your opinions on this and also like if you feel like they're sort of mutually

exclusive, then which do you feel like Ethereum should optimize for? So any one of you can go first. And by the way, I like so many other questions are running out of time, but this is sort of at the heart of what's being discussed. Nobody wants to go first. Kevin, you go first. I'll be brave.

Yeah, I mean, I think there's really a question. You know, Bankless has this really famous essay at the conception of Bankless about Heath being a triple point asset. And so I think that there's really a zero-sum game between the ultrasound money vision, which is like monetary premium versus productive asset. which is reliable yield that defy and institutions build on. So I think that like there's in, you know, there's a real question between capital asset,

consumable asset, and store of value, which of the triple point asset does Ethereum want to become? And, you know, as I said, I think it's a political economy trying to come to consensus. And when there's a zero sum tradeoff between the two, there just isn't, this is why you have not, seeing the communities merge together, like come together. It's just been the same tribes saying their talking points.

So I think that all core devs is going to have to decide between these two paths and not deciding to do an EIP is a decision in itself. So I'm really curious to see where this lands, but it is an unstoppable force and an immovable object, all core devs and the the DFI folks, we cannot choose for both of them. Yeah. To add my cards, I think it's less ultrasound money versus productive acid. I think it's ultrassan money versus like crops. I might be in the comp because like kind of more crop focused. I'm like, no, you know, 1% issuance is fine. It's lower than almost everything else in the world and it's good for security. Whereas other people are like, we can get another half percent,

another 30 percent, you know, Ethereum exists to be ultrasound money. And I think that's really the major two camps here. The productive like yield side I think is worth noting. I think as for the investors in the TradFi side, to me I think they look for like two things. They look for like predictability and they look for security. Predictability, they want to see something telegraph for a year. Like proof of stake was announced in the Ethereum white paper. It was five years worked on. Everyone was like cool. Yeah, a lot of social

legitimacy. Both quantum. Again, announced in 2024 will ship and who knows, 29 or something, has a lot of legitimacy. I think something around the change to issuance needs to have that level of like, we're working on it. You know, there's like a mark change. This blockchain works completely differently now.

It is your knowledge proof and both quantum, etc. And then the other side is security. I don't think they want any concern that Ethereum could be insecure because I think that would like, you know, not let them, you know, be able to take like a risk. And so I think this is one of my fears around this like zero percent and stuff of saying, we don't need security if we have 50 percent.

It'll be fine. I think it's like a little too close to, I don't know, the Bitcoin kind of security budget crisis and things like it. And that's why I think a lot of them are pretty okay with tail emissions. Like 1%. They're like fine. Maybe they have an incentive that they make fees. Like it's not all security perspective.

Like some of them have a monetary upside of it. But I do think if you look at all the more centralized chains, their end of the value of Ethereum. And I think we shouldn't give up Ethereum security lightly under the assumption that like a slightly harder money would make the price cool up.

Yeah, and I think it should be stressed that we did not design our security and our proof of stake for staking above 50%. Our credible neutrality is in question here. And if we end up lending at a 45% ratio at first with a 0.3% yield, it's still a productive asset.

But it's also giving the opportunity for other EF strategy to emerge and compete against it. And potentially the close to risk-free yield can be a bit higher than that at the end of the day. But as you said, we are at the crossroads of what do we want EVE to be? If we cannot agree that EF should be money and EF should be a pristine collateral, then we would be better of designing for a fully delegated system and figure out how to maintain a form of decentralization in this context, because that's very much what's in question here. Do you guys have time to go over a little bit?

Jerome, do you? Okay, great. One other centralization vector that people talked about was the liquid staking tokens. And I heard on bankless they were saying, well, or somewhere, I don't remember actually, You guys, I, like, cramped, you know, my researching because I was on vacation. I couldn't follow it in real time. So, like, I heard people talking about potentially having an enshrined LST and Ethereum, which feels like it would be a cleaner way to resolve any issues about, you know, other entities,

like, or a small number of entities colluding in some fashion over the network. Jerome, you look skeptical of that proposal. No, Ocean is skeptical as well. I let him go first. Okay. Three. Yeah, I am skeptical of it. One of the main reasons is these liquid staking tokens have to make delegations to people

to run the stake, and there's no perfect answer. You can pick a couple operators that you trust. You can be really community maxi and pick thousands of home stakers, but there's a tradeoff space and there's no like perfect answer. So I really don't think one homogenous shared risk liquid staking token is like a runner. but I do think it points at like a pretty important reason that liquid staking tokens exist and reasons that there's a lot of central life staking and that's the illiquidity of native staking that it's really hard to get your money back or it can be really hard to get your money back.

Right now we have these cues that are like pretty bottlenecked and it could be like subject to a bit of a bank run. At the best case scenario it takes about four days to get your money back and right now it was sorry it could be months and this uncertainty is why a very large amount of stakers opt to pick an LFT or they opt to pick a centralized exchange because they know that they can walk in and they can sell their asset whenever

they might have to take a little bit of a write-down on it but they're okay with that so long as they can have their money back I think this is the biggest problem staking has and is what we should be kind of focusing on more so than the ratio and I think we shouldn't make just an enshrined liquid staking token. I think the most credibly neutral thing that Botocult could do is have a price to burn a certain amount of ETH and get your steak out of there. And in good times, that'll be pretty cheap.

It would probably be around the cost to borrow ETH for the same length of Q. But then in times of stress, maybe it's higher, but people can go, okay, cool, I can get my money back. And if we had this feature, there'd be a huge amount of, you know, risk, conscious stakers that would stick to their ledger. They would stake to some cold wallet. They, you know, wouldn't put all of their money on an exchange or an LST. And that's really what I think you should be considering more so than forcing a ratio. Okay. I'm going to speed through these last questions. I did also just want to ask how this changes sort of like how easily Ethereum can

compete with other chains or even other types of assets such as stable coins. I know that I phrase that a little bit strangely, but I'll explain it. So first of all, you know, given that Salana has sort of like seven plus percent institutional staking yield, like if ETH's policy is a yield that will trend towards zero depending on the stake level, like does that just hurt Ethereum's competitiveness against other chains. You know, it doesn't have to just be salana. But then the other thing is, you know, I heard Tarun just talking about how he felt like really, you know, yield from stable coins is kind of where things are right now. Like that's where a lot of activity is. And I understand, like, yeah, people want to hold their ETH. Like, I'm not saying that they're going to like convert

their ETH to stable coins just for the yield on stable coins. But, you know, if you're just sort of thinking about like how how their economic activity is focused, like, Is that something that also could just cause people to lose interest in E? So yeah, do you feel like it just makes Ethereum less competitive against any other asset that it might compete with? I think it depends on what frame you take. The frame of like the all layer ones, they're maximalists, is that all yield is the same and that you should go where the higher yield is and we're the most efficient things. So you should use us.

if you talk to an Ethereum maxi, they'll say eth institutions are choosing Ethereum and ETH because it's the only network with 100% uptime and with this pristine block space that is validated by multiple clients. And so we are a differentiated asset. And by the way, when you're staking on these networks,

you have to stake Seoul on Solana and ETH on Ethereum. And so if you believe that this is the superior technology, it's going to have a monetary premium. it's going to advance in the future, then this is a differentiated product that's just optimizing for different things than like a super highly efficient centralized Alt Layer 1. So it just depends on which frame. You know, the Ethereum frame is that we have a differentiated source of yield and a differentiated asset.

And the other frame is just go for the most efficient highest yield thing. Yeah, I mean, I feel like basically somebody who isn't ideological, they're more in the highest yield camp. But so, let me just, I just want you to, like, institutions are choosing Ethereum because they want 100% up time for their stable coins. So this isn't an ideological thing unless you think that

like having 100% up time is the ideology. These are like fundamentally important constraints for a financial system and that's why an Ethereum maxi will say that it's a differentiated technology and source of yield. Yeah, yeah.

I like, but of course they also say what, past performance doesn't, you know, guarantee future results. So, and I know this is a technical thing that you're saying, but it applies. Like, so that, you know, they can, they can tout that achievement, but that doesn't necessarily mean that like tomorrow there won't be, you know, an issue. But anyway, somebody was going to add something. Yeah, I want to quickly say word on the, yeah, I just want to say a word on the, I just want to say a word on the,

on the competition. Bitcoin is printing less than the ether. It used to not be the case. That's another already that we would be getting back with this change. But we cannot compare with other proof of stake chains that are contenders to Ethereum. We've drawn every single matrix. And when you say 7% yield on this chain, you really have to subsidize people to run the nodes.

Maybe it's a matter of the hardware requirements, the server that you have to wear, to run, and so on, that are so expensive that you need to pay a lot for those people to run those kind of nodes. If you are a sort of stakers, you have a bill in the range of the Android. So that's all right. You can actually sort of stake, and not many chains at our level can actually claim that you can have a sort of stakers and still run a node yourself. So we have an opportunity to pay less for our security from certain respect to even be more

secure by paying less and encouraging if to go elsewhere. It's something that we should consider now from different perspective and should not compare to a change that are subsidizing a lot to get acquisition. If we came to this kind of conclusion, we should ask the reverse question, like will paying three times more or four time more or ten times more our stakers bring more adoption or more activity to Ethereum and I think nobody is taking this kind of pass right now. We are on a very important moment in the Ethereum life. Let's continue to pay stakers as much as necessary,

but as little as possible so we don't dilute the orders. if you can continue to stake at point three, like this guy that says like at 2% I'm out and so on and so forth. And if we land at 45% ratio post-implementation, then, yeah, let's do it. Let's limit the dilution and keep if you're secure and it can be neutral. Because post-50% are credible neutrality is very much in question. Okay. Last quick question, which is just a point that O'Sheen made in his long tweet,

which is he talked about how, so he, I'm just going to quote, He said, we're a couple hard forks away from real-time proving and a switch to post-quantum Ethereum. The cost model for this chain is vastly different than the one we have today. Proposing blocks will take a server rack worth of expensive GPUs and a testing with a post-quantum signature scheme is also more costly than the existing scheme. So he makes the point that he feels like actually like, yeah, okay, we can focus on this now, but actually, like, not so long in the future, we're going to have a whole different set of

calculations to be making. And so maybe the focus should be that. So, you know, I'm curious to hear, like, if any of you agree with that point, like, you know, should Ethereum be focused on other priorities? Kevin or Jerome or Or O'Sheen, if you want to add on what I said. I think it says more less what I mean. But like when this debate flared up in 2024, I think the things that people took away from it was we need to build consensus for multiple years. We need to pick something kind of on the hill with a very legitimate reason to redo issuance. And I think the two obvious ones are post quantum and like real-time CK proofs. My math is it something around a hundred grand a year in depreciating hardware to produce blocks when we go that way. And right now, the current proposal says, we don't need

to pay for that. It's fine. And I think if we do that, we'll end up with like two companies that we'll eat this cost to produce blocks and, you know, off the helm, but I don't really know if that's super sufficient. I think we'd be much better off just picking one of those two and saying, yeah, we're gonna build consensus for a change then. Yeah, the point five issuance that we put force in the proposal is something that the protocol team at the Ephraim Foundation

is saying, I think it's mostly just in Drake saying this, but it's something that we can commit on ultra long term. We can say like, hey, we can do 0.5 and be fine with it, under Lean. So from a long-term perspective, lean is just around the corner. It's a couple of years away from now. His proposal is making the change now

because it's going to be lasting over the years. Not having the capacity politically at the ecosystem now that at the industry level to have this discussion now while it's going to be following up in the following years, is a big problem because that also means that for years from now, when we are at the very moment when we need to change the issuance

because the duties have completely changed, we would have much more IFAS take, much more entrenched position and companies and assets that will rely on this kind of yield. And so this is why the timing is so important. We have a window of opportunity for a smooth transition. and we should not let it close. So I'm glad that we are slowly converging, I think. I hope I'm not the only one that perceived this as a slow conversion.

But from my perspective, we had a lot of very positive discussion over the past few days. And I'm sorry I cannot respond faster than I do right now on the It's Magician. I mean, you could tell AI to respond for you and then people would be really mad. Yeah. Okay. Last thing that I just want to make sure of. So Kevin, you said that basically this will be discussed on all core devs on Thursday. So it feels like there's not enough consensus around anything to make a decision.

So what's kind of like the most likely timeline on which things will play out? And any of you can respond. So all core devs is on Thursday. And what's being discussed right now is what's going into the next hard fork. I believe it's called Hegetha. I may be getting that wrong. Correct me if not. And so this is kind of like figuring out which items are going to go on the train,

which is leaving the station for the Hegeitha Fork. If it doesn't make it in, then I think it's much less likely that it gets in at all. And, you know, Laura, I'll just repeat what I said earlier, which is that there's no easy answers here. This is a political economy question. And so there's possibly many right answers. But I think this is the real question is how do you do monitoring? monetary policy in a decentralized network.

And since Ethereum has such a network effect and such a mature, very high-lindy network, I think it's sort of leading the way on how monetary policy can be done for these blockchains. So really curious to see what happens. But tune into all core devs on Thursday to see the next step. Okay. But if it doesn't get into that one, so that one's supposed to go later this year, right? So basically the options are they implement it to deploy at the end of this year or what then then the decision is punted to the next one,

which would be probably early 2027 or first half of 2027? Every six months, I think, is how often there's a fork these days. Okay. Okay. Yeah. I may be wrong on the matter and maybe Ocean, you can correct me. the whole core dev meeting that we are having this week is going to say, okay, we have all of the, we have those 66 different EIPs suggested for, for Agota.

Maybe consider that, okay, this one is really not mature. Technically, it's too complicated. Like, we need more time and then set aside for future discussion. And that's, that's what, this is what would happen on the old Cordeve. Like Cordes, we look at the different TIPs from a different perspective and say like, okay, this one is a, this one, this one needs more maturity.

This one needs to be discussed. This one is clearly too early. This one and that one and so on and so forth. So what's, what are the outcomes here? Maybe a Cordel's come out and say like, okay, 8363, like too much, too much on the plate. Like, let's not discuss that anymore. Like, we kill this right now.

Maybe some of them are getting pressured that to do. or other situations, I don't know. But I don't think it's the likely outcome. I think the likely outcome is that they will decide to let the discussion continue. Just, you know, let's wait for the next All-Cardev to see if there's more clarity on should we or should we not do that. But the very dates that you should have in mind

is that there's the 26th of October where the proposed for inclusion, which is the status of this EIP, and it's also the status for the anti-correlation EIP, I hope we'll make it in. On the 26th of October, the CODELS will decide if the different proposals are mature enough to be considered for inclusion,

which triggers, I think, the beginning of the test nets and so all, and the beginning of the implementation and so on. And the advantage of our EIP is that, however contentious it may be, it's not a big technical hurdle to implement. I'm not saying it's easy, but it's not hard compared to other things. So I wouldn't expect the call-dives to take stance on saying,

like, we should not discuss this further because it's just too contentious to whatever. In the past, they have let the discussion continue on a very contentious thing, including Prog-Pal. But let's see what the future has for us. Okay. What you're on the second. Well, thank you all so much for joining in on this discussion. This was really interesting.

And yeah, I'm curious to see what plays out. I see arguments on both sides. But I think that probably means it needs some amount of refining before it gets adopted, if it gets adopted. All right. Well, thank you, everyone. And thanks to everyone for joining the live stream. We will catch you next. We will catch you tomorrow.

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