On October 31, 2016, the Ethereum Classic community published a landmark proposal that would define the young blockchain’s economic identity. Written by developer Carlos Graterol, the article titled “Instead of The Halvening, A Tithing for ETC” laid out a bold vision: transforming Ethereum Classic’s inflationary supply schedule into a Bitcoin-style deflationary model through a novel mechanism the community called “tithing.”
TL;DR
- Ethereum Classic had 85.4 million coins in circulation — over five times Bitcoin’s 15.96 million supply despite being seven years younger
- The community proposed two “tithing” options to reduce block rewards gradually, targeting a cap of approximately 210 million ETC
- A community poll showed 77% support for changing the monetary policy
- The proposal drew direct inspiration from Bitcoin’s proven halving model
- The plan was designed to coincide with the “Difficulty Bomb Freeze” network upgrade at block 3 million
The Problem: Too Many Coins, Too Fast
When Ethereum Classic was born from the DAO hack fallout in July 2016, it inherited Ethereum’s original supply schedule: 5 ETC per block, with a new block produced approximately every 14 seconds. By late October 2016, this aggressive emission rate had already pushed the circulating supply to 85.4 million ETC, each worth just $0.90 according to CoinMarketCap data from the day.
The contrast with Bitcoin was stark. Bitcoin, with seven years of history behind it, had only 15.96 million coins in circulation. For every one Bitcoin, there were roughly five ETC — and at the current rate, the ETC supply would balloon to approximately 500 million coins by 2055 if left unchecked. The original Ethereum pre-mine of 72 million coins had set the stage for what many in the ETC community saw as an unsustainable inflation problem.
Enter the ‘Tithing’ Mechanism
Rather than adopting Bitcoin’s dramatic “halving” approach — where the block reward is cut by 50% approximately every four years — the Ethereum Classic community proposed a gentler, more frequent reduction they called “tithing.” The name was deliberately chosen to evoke a gradual, predictable contribution rather than a sudden shock to the network’s economics.
The proposals, submitted by a community member using the handle “Snaproll,” offered two distinct paths forward:
Option A: 10% Reduction Every 3 Million Blocks
- Block reward decreased by 10% approximately every 1.4 years
- Theoretical maximum supply cap of 222 million ETC, with the realistic cap closer to 210 million
- 99% of all ETC would be mined by approximately 2071
- The absolute cap would be reached after 2164
Option B: 20% Reduction Every 6 Million Blocks
- Block reward decreased by 20% approximately every 2.8 years
- Same theoretical maximum of 222 million ETC
- Faster emission schedule: 99% mined by approximately 2066
- Absolute cap reached after 2157
Both options shared a common target: a supply ratio of roughly 10 ETC for every 1 BTC, creating a psychological and economic parallel with Bitcoin’s scarcity narrative.
Community Governance in Action
What made the tithing proposal remarkable was not just its economic design, but the process behind it. A poll conducted by the official Ethereum Classic Twitter account found that 77% of respondents supported changing the monetary policy. While Graterol acknowledged the poll was “not scientific,” it served as a clear temperature check on community sentiment.
This was grassroots blockchain governance at work — no central authority, no corporate board, no regulatory mandate. Instead, developers, miners, traders, and users engaged in open debate on Reddit and Twitter, proposing solutions, critiquing mechanisms, and building consensus through persuasion rather than decree.
Graterol himself expressed a clear preference for Option A, arguing that its timing — synchronized with the planned “Freeze of the Difficulty Bomb” network upgrade at block 3 million — would send the strongest possible signal to the market about ETC’s long-term economic direction.
The Blockchain Technology Implications
The tithing debate highlighted a fundamental challenge in blockchain design that went far beyond Ethereum Classic: how should a decentralized network manage its monetary policy without a central bank? Bitcoin had solved this problem by hard-coding its supply schedule from the beginning. Ethereum, under Vitalik Buterin’s guidance, was charting a different course with plans to eventually move to proof-of-stake.
Ethereum Classic’s predicament was unique — it was a chain that had been born from a crisis, inheriting economic parameters it never chose. The tithing proposal represented the community’s attempt to take ownership of its economic destiny, proving that even a young, crisis-born blockchain could evolve its monetary policy through decentralized governance.
The broader crypto market context added weight to the discussion. While ETC traded at just $0.90 with a market cap of $77 million, Ethereum itself was valued at $11.00 per coin with a $940 million market cap — more than twelve times larger. A credible monetary policy could help close that gap by attracting miners, investors, and developers who valued predictability and scarcity.
Why This Matters
The Ethereum Classic tithing proposal of October 2016 was an early case study in decentralized economic governance. It demonstrated that blockchain communities could debate, design, and implement fundamental changes to their monetary policy without centralized control. The specific mechanism — gradual, predictable reductions rather than sudden halvings — offered an alternative template that other blockchain projects would later study and adapt. While it would take until December 2017 for ETC to formally implement its new monetary policy, the seeds were planted on this Halloween day in 2016, when a small but passionate community decided that its economic future was too important to leave to inertia.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.
85.4 million ETC vs 15.96 million BTC. five to one ratio and people wonder why the price was under a dollar
77% community support for tithing. say what you want about ETC but at least they asked the community first
mined ETC back when this proposal dropped. community was split but 77% approval was real. shame the price action never rewarded the discipline
Fatima Al-Rashidi 77% support is real governance. compare that to chains where the foundation just rubber-stamps whatever the core team proposes
Anya P. 77% of a small community is still a small community. the governance was transparent but the voter base was tiny
Anya P. 77% of a tiny community is still a tiny community. ETC governance was transparent but lets not pretend this moved the needle on adoption
77% support is impressive for a community that small. say what you want about ETC but the governance process was transparent
capping at 210 million ETC modeled after bitcoins 21 million. the homage was obvious but 10x more supply is still 10x
modeling the cap after btc but at 210m instead of 21m was always going to dilute the store of value pitch. 10x supply 10x problems
supply_shock_ 10x more supply than BTC but the tithing model at least tried to address it. most chains just print forever and hope nobody notices
10x more supply than BTC but modeled after it. the supply inflation on ETC was the main reason it never gained traction as a store of value
carlos graterol proposing this at the difficulty bomb freeze. clever timing to bundle monetary policy with a required upgrade
^ bundling policy changes with technical upgrades is how you sneak controversial stuff through. classic governance move
bundling monetary policy with a technical upgrade is how you force through controversial changes. same playbook ETH used with the merge and EIP-1559
Grigori Volkov bundling the tithing with the difficulty bomb freeze was smart politics but terrible governance. set the precedent that protocol changes ride on mandatory upgrades
85.4M ETC vs 15.96M BTC. graterol was right to push for tithing but 210M cap was still way too generous
210 million cap vs bitcoins 21 million. ten times the dilution and they still called it deflationary. ETC holders deserved better framing
85.4M ETC vs 16M BTC supply at the time is a wild ratio. no wonder the community wanted a supply cap. tithing was a cleaner mechanism than just slashing rewards too
77% community poll support and it still took ages to implement. governance by consensus is painfully slow even when everyone agrees
210 million ETC cap modeled after Bitcoin’s 21M. But 10x more supply is still 10x the problem
85.4M ETC vs 16M BTC supply ratio explains why it never gained traction as a store of value
85.4M ETC supply was always the anchor weighing it down. graterols tithing idea was elegant but 210M cap was still 10x BTC. not exactly deflationary
77% community support was real governance. Compare this to chains where foundations rubber-stamp core team proposals
GreenTech_ 77% support matters but bundling monetary policy changes with the difficulty bomb freeze at block 3M was coercive governance. vote yes or your chain bricks
Grete T. bundling monetary policy with the difficulty bomb freeze was standard ETC governance. vote with us or your chain stops producing blocks. not exactly voluntary consensus
Graterol proposing a 210M cap modeled on BTC’s 21M was ambitious but the 10x supply ratio killed the store of value pitch instantly. ETC needed 21M not 210M
77% support sounds great until you realize the voter turnout was probably under 500 people. ETC governance was always a handful of whales deciding for everyone