What is the exact issuance model for ETH?

Question

How is the number of ETH per block determined? My initial impression was that ETH blocks produce 5 ETH per 15 seconds but I cannot find any exact numbers or methodology regarding the emission schedule.

This blog post from 2014 says 18,000,000 ETH will be produced per year, given there are 31,557,600 seconds in a year, that leaves us at 1.7532 ETH per second. Given ETH blocks are 15 seconds, that equates to 8.5616 ETH per block.

However, according to bitinfocharts.com, the reward per ETH block is a bit more complicated.

It seems that the total reward per block is split up in the following way:

• Static reward (currently 3 ETH)
• Transaction fees
• Uncle inclusion
• Uncle rewards

In which of these 4 points are new coins generated and how is that generation determined?

Why is the static reward 3 ETH (totaling ~6.3 million new ETH per year) when the original blog post and most information I'm finding on ETH claims 18 million new ETH generated per year? Is there a block halving event or some similar schedule for reducing the static reward?

Answer 1

Currently there are produced 3 ETH per block and this along with uncle inclusion and uncle rewards is where new ETH is generated.

Previously there were 5 ETH generated, but since the Byzantium upgrade (at block 4,370,000) by EIP 649 (Difficulty Bomb Delay and Block Reward Reduction)

The Ethereum yellowpaper describes the protocol in great detail (it was last updated on 2018-05-04)

11.3. Reward Application. The application of rewards to a block involves raising the balance of the accounts of the beneficiary address of the block and each ommer by a certain amount. We raise the block’s beneficiary account by R block; for each ommer, we raise the block’s beneficiary by an additional 1/32 of the block reward and the beneficiary of the ommer gets rewarded depending on the block number.

The block reward is defined as 3 ETH

R block = 3 * 10^18 Wei

The block's beneficiary account is first raised by R block.

Ommer is also known as Uncle; within Ethereum it is defined as

[...] a set of other block headers U that are known to have a parent equal to the present block’s parent’s parent (such blocks are known as ommers)

Its general definition is a gender neutral sibling of parent

Each ommer receives 1/32 * R block which is 0.09375 ETH

The block's beneficiary is also rewarded for including the ommer, and it is rewarded 1 + 1/8 * (ommer number - block number)

For example if the ommer was 1 block away the ommer's miner receives 2.625 ETH; if it's 7 blocks away, his reward is 0.375 ETH