Hello - thanks for bringing up these questions here! I worked on the Emissions Report with the 7th Avenue group last year so I wanted to summarize some risks the independent researchers brought to light from the original report to hopefully help address your questions.
If you have more, please let me know or join us on the Friday SIP call to discuss IRL.
Summary answers to your questions
Why now?
The sBTC launch and halving are within weeks of each other, that creates a risk to the success of sBTC to change the system as the system is changing. Specifically, the miner rewards while miners are supporting a new upgrade. If there was more time between the launches, we may have a better idea of the potential impact if at all, since the halving is imminent, there is only delay it or learn the impact as it’s happening. We forsaw this last year, but did not have confirmation how much time would be between the Nakamoto launch and the halving.
In December ’23, the Stacks Foundation recommended: “Summary: We recommend waiting until after the Nakamoto release to prepare a SIP or take any further steps. This SIP is working to do that, since the Nakamoto release just launched and the launch of SBTC is on the near horizon.”
Source: Stacks Halving Schedule: Reports and Recommendations - #32 by blocks8
Is it an existential threat?
The risk is that with halved incentives, there may be fewer miners who can mine profitably. If the number of miners goes from 15 to 7, that doesn’t disrupt the chain, but it may weaken the strength of the miner network during a time of transition.
The timing of this halving is the issue. Since it’s so close to the launch of sBTC creates a risk to the success of sBTC. As 7th Avenue Group put it, “It’s in Stacks’ best interest to consider solutions that will allow it the most time and flexibility to thrive as it grows. An emissions schedule that decreases mining incentives too early, or too quickly, may artificially hinder Stacks’ growth and potential.”
Can we let it play out and see what happens?
There isn’t a precedent to restore emissions once they are halved. Delaying a halving was seen as the better solution instead of cutting and then having no way back. For reference, BTC is 14 years old and has larger emissions than Stacks halved emissions 4 years in. We’ve learned a lot since the original design, and we’ve seen the Stacks upgrades improve the system in many ways. Changing the emissions halving date seems to create a better environment for success of the chain in terms of emissions, miner rewards, and halving timings.
From the report, “Only four years into Stacks existence, it will be emitting a smaller portion of its supply than Bitcoin does at 14 years in. This minimal emissions budget so early on may not be ideal for Stacks, particularly in light of the specific risks and issues we discuss in the Emissions Report. Given all of this, we believe it would be reasonable for the Stacks community to prioritize the first criterion – that is, seeking to extend the period for which 1000 Stacks are emitted for as long as reasonable.”
Is it a slippery slope? Does one change mean many changes in the future?
As the last report pointed out, It is important to remember that no token emissions changes can be made without explicit community vote and SIP process. The current view is that this change was foreseen last year and a lot of research has gone into it to right size it to the network’s future. Additionally, when we first researched this change, it may not have been necessary if Nakamoto had more time post-launch before the halving. Since we only have a few weeks between the launch and this imminent halving, it’s the answer to WHY NOW and possibly, why it may never be needed in the future. But, if there were ever another reason to make a change, it could only happen through the support and vote of the community.
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REFERENCE
[The following was taken from the previous Emissions forum post and includes direct quotes from the emissions report]
Emissions Report
As laid out in the 7th Avenue Group Emissions schedule report , in the current Stacks halving emissions plan, in January 2025 the mining reward for Stacks miners will drop from 1000 Stacks per block to 500 Stacks per block if no changes are made. This reduction in mining rewards may have two major impacts.
First, it may decrease the number of opportunities for miners to be profitable, further reducing the total number of miners.
Second, it may create barriers to the potential success of sBTC by reducing the mining rewards. To mitigate these risks, they laid out the criteria to consider changes below.
7th Avenue Group recommendations: “It’s in Stacks’ best interest to consider solutions that will allow it the most time and flexibility to thrive as it grows. An emissions schedule that decreases mining incentives too early, or too quickly, may artificially hinder Stacks’ growth and potential.”
Additional information for the 7th Avenue Group report:
- We do believe that there is greater risk allowing the current halving schedule to continue as originally implemented, as opposed to making some adjustments that could allow for increased runway, and Stacks ecosystem maturation, at the current 1000 Stacks per block emissions rate.
• Only four years into Stacks existence, it will be emitting a smaller portion of its supply than Bitcoin does at 14 years in. This minimal emissions budget so early on may not be ideal for Stacks, particularly in light of the specific risks and issues we discuss in the Emissions Report. Given all of this, we believe it would be reasonable for the Stacks community to prioritize the first criterion – that is, seeking to extend the period for which 1000 Stacks are emitted for as long as reasonable.