Ethereum Classic’s ‘Tithing’ Proposal: How Community-Driven Governance Tackled the Crypto Supply Problem

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.