On October 31, 2016, the Ethereum Classic community took a decisive step toward defining its economic identity. In a detailed blog post titled “Instead of The Halvening, A Tithing for ETC,” project contributor Carlos Graterol laid out a compelling case for overhauling the network’s monetary policy — proposing a capped supply schedule modeled after Bitcoin’s proven deflationary design. The proposal marked one of the earliest and most significant philosophical departures from Ethereum’s original economic framework since the hard fork that created Ethereum Classic.
TL;DR
- Ethereum Classic proposed a new monetary policy that would cap total supply at approximately 210 million ETC, mimicking Bitcoin’s scarcity model
- Current ETC supply stood at 85.4 million coins — five times Bitcoin’s 15.96 million despite being seven years younger
- Two proposals emerged: Option A (10% block reward reduction every 3 million blocks) and Option B (20% reduction every 6 million blocks)
- A community poll showed 77% support for changing the existing unlimited emission schedule
- ETC was trading at approximately $0.90 with a market cap of $77 million, ranking #5 on CoinMarketCap
The Problem: Unlimited Emission as a Bug, Not a Feature
At the heart of the proposal was a blunt assessment: Ethereum Classic’s existing supply schedule was inherited from Ethereum’s original design and was never intended to serve as a permanent monetary framework. The network was producing 5 ETC per block, with blocks generated approximately every 14 seconds. At that rate, ETC’s circulating supply had already ballooned to 85.4 million coins.
To put this in perspective, Bitcoin — which had been operating for seven years longer — had only 15.96 million coins in circulation. For every one Bitcoin, there were five ETC. And under the existing unlimited emission schedule, projections showed that by 2055, the total ETC supply would reach approximately 500 million coins if no changes were made.
The Ethereum Classic community recognized that this inflationary trajectory was incompatible with the store-of-value narrative that had driven Bitcoin’s success. As the blog post stated plainly: “The current supply schedule for ETC is a bug, not a feature.”
Two Paths to Scarcity: The Tithing Proposals
The proposals, developed by a community member known as “Snaproll,” offered two distinct paths toward a capped supply of approximately 210 million ETC. This number was deliberately chosen to maintain a 10:1 ratio with Bitcoin’s 21 million cap — a psychological anchor that could help position ETC as a complementary store of value.
Option A: The 10% Tithing proposed reducing the block reward by 10% every 3 million blocks (approximately 1.4 years). Under this schedule, 99% of all ETC would be mined by 2071, with the theoretical maximum cap hit after 2164. The actual cap would be closer to 210 million ETC in practice.
Option B: The 20% Tithing proposed a more aggressive 20% reduction every 6 million blocks (approximately 2.8 years). This faster schedule would see 99% of ETC mined by 2066, with the cap reached after 2157. Both options converged on the same approximate maximum supply.
Graterol expressed a preference for Option A, noting that its timing aligned with the planned “freeze of the difficulty bomb” network upgrade at block 3 million. Implementing the monetary policy change simultaneously would send what he described as “a clear signal to the market that ETC has taken steps towards its long-term future.”
Community Momentum and Growing Ecosystem
The monetary policy proposal did not emerge in a vacuum. By late October 2016, Ethereum Classic was experiencing a period of accelerated growth and institutional interest. The project’s GitHub repository had grown from a single volunteer developer to 34 contributors with commit rights — a remarkable expansion for a chain that many had initially dismissed as a short-lived protest movement.
Major exchange BTCC, one of China’s largest cryptocurrency platforms, had announced it would enable ETC trading, providing critical liquidity and legitimacy. The Chinese ETCWin project — a decentralized exchange built on Ethereum Classic — represented the largest ETC-based ICO to date. Meanwhile, prominent investor Chandler Guo had outlined plans to bootstrap the creation of 100 Ethereum Classic decentralized applications over the following three years.
Perhaps most significantly, Charles Hoskinson’s IOHK had committed a dedicated development team, dubbed “The Grothendieck Team,” to work on Ethereum Classic’s core infrastructure. This institutional backing lent credibility to the project’s long-term viability and its capacity to execute on ambitious technical proposals like a monetary policy overhaul.
The Philosophical Divide: ETC vs ETH
The monetary policy proposal also underscored the growing philosophical divergence between Ethereum Classic and its parent chain. While Ethereum, under the Ethereum Foundation’s guidance, was pursuing a roadmap that included a transition to proof-of-stake, Ethereum Classic was charting a fundamentally different course rooted in proof-of-work mining and Bitcoin-inspired economic principles.
As project coordinator “arvicco” explained at the time: “The current unlimited emission schedule flies in the face of basic tenets of Austrian economics.” This explicit alignment with Austrian economic theory — which emphasizes sound money, scarcity, and the rejection of unlimited money printing — positioned Ethereum Classic as the “sound money” alternative in the smart contract platform space.
Ethereum Classic also maintained its conservative approach to protocol changes, refusing to implement Ethereum’s “Spurious Dragon” hard fork. This restraint reinforced the project’s commitment to immutability — the same principle that had led to its creation following the DAO hack.
Why This Matters
The October 31, 2016, monetary policy proposal was a watershed moment for Ethereum Classic and the broader cryptocurrency ecosystem. It represented one of the first serious attempts to graft Bitcoin’s proven scarcity model onto a Turing-complete smart contract platform — an idea that would later influence numerous other projects. While the specific “tithing” mechanism would undergo further refinement through the ECIP process before eventual implementation in December 2017, the foundational insight remained unchanged: a blockchain that aspires to be a global economic platform needs a credible commitment to monetary scarcity. Ethereum Classic’s willingness to confront this question head-on, even as a fledgling community, demonstrated a maturity and long-term vision that many had underestimated. The proposal also offers a historical lesson in how communities around decentralized protocols can self-organize to address fundamental economic design questions — a process that continues to shape the crypto landscape today.
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.
option B with 20% cuts every 6M blocks was the only path that didnt gut mining revenue. community picked A because shorter intervals sounded aggressive
85.4M supply at $0.90 gave ETC a $77M market cap with no clear value proposition beyond being anti-fork. the monetary policy change was survival strategy
85.4M supply at $0.90 with a $77M market cap. the 210M cap was trying to manufacture scarcity on an already bloated chain
0.90 ETC with a bloated supply and zero use case beyond being anti-fork. the monetary policy pivot was the only thing that gave it a narrative
hard_money_maxi ETC at $0.90 with no use case beyond being anti-fork. the 210M cap was a marketing band-aid on a chain nobody used
hard_money_maxi ETC at 90 cents with no use case beyond being anti-fork. the monetary policy pivot was survival marketing not economic design
85.4M ETC at 90 cents with 5x BTC supply. the market was already pricing in zero confidence in the monetary policy. 210M cap was minimum viable scarcity
85.4M ETC at 90 cents was the market saying this coin has no reason to exist. capped supply or not
210M cap copying bitcoin was a marketing gimmick but option B with 20% reductions every 6M blocks was economically sound. shame it never landed
copying bitcoins 210m cap was such an obvious marketing play. 85.4m supply was already bloated and everyone knew it
pure marketing but it worked. the 210M narrative gave ETC a reason to exist beyond being the unforked chain
the 210M number was pure marketing but the block reward reduction mechanism was genuinely well thought out. option B with 20% cuts was the better design
option B with the 20% reductions made more economic sense. smoother curve, less shock to miners. shame the community couldnt align faster
ETC_miner_77 option B was economically sounder. 20 percent cuts every 6M blocks gives miners time to adjust instead of a cliff drop. community picked the worse option as usual
20 percent cuts every 6M blocks was the sane choice. option A was too aggressive for miners to absorb
option B with 20% cuts every 6M blocks was clearly better for miner sustainability. community picked A because shorter timeframes look more aggressive on paper
ETC_miner_77 option B was clearly better. 20 percent cuts every 6M blocks gives miners breathing room. community picked the worse option as usual
77% support for changing monetary policy and it still took ages to implement. DAO governance at its finest
Artur V. 77 percent support and still months of debate. this is why DAO governance gets mocked. the tithing metaphor from Graterol was clever though
77 percent support and still months of arguing. this is why on chain governance is a nightmare at scale
Artur V. 77 percent support and months of debate. perfectly captures why on chain governance moves at the speed of arguing
Artur V. 77% support and months of debate tells you everything about why ETC never went anywhere. governance by argument
77% in favor and they still debated for months. classic example of governance paralysis in crypto communities
monpol_truther 77% support and months of debate. classic crypto governance where everyone agrees something needs to change but nobody can agree on what
ETC at $0.90 with 5x bitcoins supply. they needed this cap way earlier, market already priced the inflation in