The Founder of Ethereum, Vitalik Buterin came into the limelight on April 1st with no prior hint at all to propose a 120 million hard cap on Ethereum’s [ETH] native currency Ether. People started commenting and declaring it as a prank on the Fool’s day as the sudden proposal was a surprise. The Founder suggests the cap could be part of the next hard fork mostly in the first phase of the Casper update.
He made this unexpected announcement on the developer’s forum, GitHub yesterday. The latest Ethereum Improvement Proposal [EIP], recommended by Buterin is to set a hard cap on the coin at 120,204,432 which is exactly twice the amount sold in the original sale in 2014.
The proposal penned by him could lay the foundation for resolving one of the Ethereum network’s biggest outstanding questions, that is, a limit on the amount of Ether that could be created. He foresees the implantation of the hard cap occurring with the next phase of the Casper update when all rewards in the sharding system would be predominated to reflect the hard cap as a finite supply of Ether.
He explained the reasons for the hard cap suggestion as part of his announcement:
“In order to ensure the economic sustainability of the platform under the widest possible variety of circumstances, and in light of the fact that issuing new coins to proof of work miners is no longer an effective way of promoting an egalitarian coin distribution or any other significant policy goal, I propose that we agree on a hard cap for the total quantity of ETH.”
According to his statement, if it is too late before EIP is adapted to set a 120,000,000-hard cap, then the next logical cap will be 144,052,828 – twice the amount of Ether sold in the Genesis block.
There is currently more than 98 million worth ETH circulating around and Buterin addressed miners concerns about diminishing rewards in the change to a proof-of-stake model as part of the Casper update.
Vitalik’s statement intended to provide clarity stating that the original issuance up to 18 million ETH can be issued every year which is one of the very few times he has addressed Ethereum’s monetary policies on a public platform.
The EIP was released as only a proposal. There was no timeline or any dates for the implementation of either the hard cap or the changeover to Casper phase one included in the statement.
Alan Heckle, a Twitter user said:
“The truth is always constant everyone travels in their own path to find it. Next time don’t drag us along. Anyway, will it push Ethereum prices which lots of supply are HODling.”
Chris Hellen, a forum user commented:
“If it’s done smart, perhaps we got a shot at it. That’s why today’s experimentation is important, no matter the results. This road just only begun.”