In recent days, a new proposal has emerged from the ETA Forum, which seeks to shift part of the cost of public ecological expenditure to the certificationer. It is envisaged that the certificationer may transfer 0 per cent to 10 per cent of the pledge proceeds to ecological support; this arrangement will be uniform for all certificationers if most certifying officers support a non-zero ratio.
How the proposal works
The proposal proposes the so-called “certificate re-directed income” mechanism, whereby a portion of the pledge incentive is allocated at the level of the agreement to support public projects in the ecology of the Taifung. The funds would not be decided by a single agency in a uniform manner, but would be distributed to different addresses through a “splitter” contract, based on pre-referral preferences.
This means that the certifiers do not have to participate in the financing of voting on a case-by-case basis, but can pre-set the target of support and then be automatically distributed by contract. Proponents of the proposal argue that this approach can help to provide a sustainable source of funding for projects that have long lacked stable business models, such as tools, security research, public infrastructure, etc.
Tens of thousands of funds
The proposal estimates that, on the basis of the current size of the pledge, approximately 700,000 ETHs are received annually by the Taifeng certifiers. If the re-direction ratio is 5 to 10 per cent, approximately 50,000 to 70,000 ETHs can be transferred each year for ecological support.
Based on the current prices described in the paper, the size of this component amounts to approximately $120 million. Proponents believe that the certificationer itself is a long-standing stakeholder in the Taifeng network, and that the improved ecological construction could benefit from network activities, ETH destruction and the value of the pledged assets, and that there is a logic for the certificationer to share part of the public costs.
Disputes focused on governance and incentives
However, this idea is also clearly controversial. The first is the risk of centralization brought about by the coordination of the certificationer. If most certifiers act in concert, they can not only increase the re-direction rate, but may also channel funds to themselves or to closely related groups.
Another problem is that “who decides and who bears” is not entirely consistent. A large number of ETH currently operate independently of individuals to complete the pledge, but are involved through pledge service providers, mobile pledge agreements or exchanges. In such a case, the operator may be responsible for establishing a preference for funding, but the reduction of the proceeds is ultimately borne by the entrusted ETH holder.
In addition, critics have suggested that, if the certifier is willing to give up part of the incentive, it would be possible to move down directly with the Taipei instead of adding a new financial transfer mechanism. It was reported that the proposal was still under discussion and had not yet entered the formal voting process.