What is EIP 1973 and how can it Impact Decentralized Applications

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By its very nature, Ethereum, just like any permission-less
blockchain is open sourced. This means that the underlying code that creates
this decentralized infrastructure is open and accessible for anyone to look at,
review, and contribute to. This represents the culmination of the individual
efforts of tens, if not hundreds of developers around the world. Such
distributed collaboration is no easy feat. So how does this community structure
the process by which new ideas are proposed, vetted, and eventually implemented
onto Ethereum’s mainnet? Through an improvement process known as EIPs (Ethereum
Improvement Proposals). 

There are some well-known EIPs like ERC20 which is for token issuance,
EIP721, which is for non-fungible tokens and rose to popularity through the
CryptoKitties project. Lastly is EIP145, which is specifically designed for
Ethereum Hard Forks. Although EIPs are an open-sourced protocol that anyone can
contribute to, getting your EIP approved is still a rigorous process. Highly
established projects such as Polymath (ERC-1400) have only gotten their EIPs to
the Draft and Pull Request stages respectively. This speaks volumes to the
demanding evaluation process required to get an EIP approved. Although EIPs are
an open-sourced protocol that anyone can contribute to, getting your EIP
approved is still a rigorous process. Highly established projects such as
GitCoin (ERC-1081) and Polymath (ERC-1400) have only gotten their EIPs to the
Draft and Pull Request stages respectively. This speaks volumes to the
demanding evaluation process required to get an EIP approved.

To add more context into the amazing work put forth by the
KrawlCat team, let’s look at the overall process for submitting an EIP.

How To Publish an EIP

There are various forms of EIPs; those that occur on the core
layer, which affects the Ethereum blockchain itself, and the application layer,
which affect the tokens and projects that are built on top of the Ethereum
blockchain. If you want to submit an improvement proposal on the Application
Layer (ERC), then it is a three-step process:

  1. Draft:
    An EIP is open for consideration.
  2. Last
    Call:
    The EIP has gone through the initial review process and has been
    deemed acceptable. The proposal will now go through a peer-review from a wider
    audience.
  3. Final:
    An EIP that has been in ‘Last Call’ for at least 2 weeks and all technical
    changes requested during the last call stage have been implemented by the EIPs
    author(s).

KrawlCat’s contribution to ERC-1973 is on the application layer,
so this proposal will affect tokens and projects built on top of the Ethereum
blockchain. Therefore, the EIP has to provide utility to multiple projects, not
just KrawlCat. So, let’s analyze what EIP1973 aims to accomplish, how this EIP
applies to KrawlCat, and also look at what other use cases this EIP can provide
utility towards as well.

ERC-1973: Programmatically Tiered Token Rewards:

ERC-1973 proposes the implementation of a programmatic token
rewards interface. The inclusion of this interface would allow for Dapps to
scale out their respective token economies much more efficiently. ERC-1973 has
been designed so that reward distribution is on a per/block basis, and the
value of each reward is dependent on the number of participants in the network.
At the beginning, when the network has low volume, per/participant rewards are
high in order to incentivize more people to onboard onto the network. However
as the network scales the token rewards will decrease proportionately, relative
to the amount of people on the network.

KrawlCat’s focus was to design an automated payout structure for
token rewards on its network, but there was no standardized process. This led
us to evaluating various methodologies, such as a “push system”, whereby
developers are ‘pushing’ out the rewards to users. However, as networks scale
to the tens of thousands, keeping track of this participant-inventory and each
user’s corresponding reward becomes unmanageable. ERC-1973 has instead proposed
a “pull system” where users can withdrawal their funds, and based off their
usage on the network, a corresponding reward is automatically distributed to
their wallet.

KrawlCat is the ideal first use case for ERC-1973:

There are a lot of EIPs in various stages of development,
however many of them are not ready to integrate with current projects. In
contrast, ERC-1973 has been designed to provide utility to projects that are in
the space today, and therefore is ready to create tangible value for the
KrawlCat ecosystem, as well as other projects.

KrawlCat is a decentralized data feed provider that allows
blockchain projects to access off-chain data like stock prices and other
predictable events like aviation information and weather forecasts. KrawlCat’s
infrastructure consists of a distributed network of computers that have been
specifically manufactured to scrape the web for internet statistics. As each
computer scrapes data, they are rewarded in the form of KrawlCat tokens; the
more they scrape, the more they earn. ERC-1973 would help expedite KrawlCat’s
reward-payouts. Rather than utilizing a push system where developers must send
the appropriate rewards to each address, which also raises centralization
concerns, a pull system would be much more efficient as rewards could be
automatically withdrawn.

The idea of token rewards, and tokenized economies is relatively
new, so let’s explore some other use cases that highlight ERC-1973’s
functionality.

Other Use Cases that can generate value from ERC-1973:

Compensation:

ERC-1973 works especially well for projects that require people
to contribute work to the blockchain network, such as miners who are
responsible for verifying transactions.

Profit Sharing & Usage Incentives:

Some projects are designed to redistribute the cash flows
generated from network activity. ERC-1973 would work especially well for such a
function, as the distribution of rewards could be done much more efficiently so
developers don’t need to push the rewards to each user’s wallet.

Fractional Ownership and Dividend Distribution:

One of blockchains most exciting use cases is fractional
ownership; the process of tokenizing real-world assets like real-estate and
selling equity in these assets in the form of tokens on the blockchain.
ERC-1973 would fit seamlessly into this operation as now these asset-backed
tokens can be distributed to the appropriate party through automated means,
rather than through centralization.

One of the strongest inhibitors preventing blockchain adoption
is the ability to distribute token rewards without centralization, as it
prevents these projects from scaling and servicing their customers in a truly
decentralized manner. Based off these short comings, this EIP should be seriously
considered by the community. ERC-1973 can improve the service delivery of
projects within Ethereum’s ecosystem, while also weakening their reliance on
centralization.

Want to learn more about EIP 1973 or
help contribute?

Check out https://eips.ethereum.org/EIPS/eip-1973 to learn more!

Interested
in learning more about KrawlCat’s decentralized data feed?

Check out KrawlCat.com to learn more!

News
Provided By:

[email protected]

SOURCE:

Yesbit Technology Ltd.



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