Minimum Viable Issuance

Basics

• From Uncommon Core (26-4-2021):

"Ethereum has a social contract called Minimum Viable Issuance. The logic behind it is that Ethereum needs a security budget that scales with the network’s demand for security. If ETH doubles in price, so should the amount it pays to miners. So one motivation is to keep Ethereum secure, but the second (conflicting) motivation is to pay as much for security as necessary, but no more.

We can show that this motivation has to exist, using a simple thought experiment. A network whose native token inflates 100% year over year has a very large security budget. But the high inflation is a tax on holders, making the asset unattractive to hold. When a blockchain’s native asset is unattractive to hold, it has a very difficult time bootstrapping itself in the marketplace."