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Ethereum Improvement Proposals: How they Work and Why they Matter

Read 5 min
Key takeaways
—  The Ethereum community can submit proposals for network changes or upgrades in the blockchain through Ethereum Improvement Proposal (EIP).

—  The community provides feedback on the EIP and makes sure that it is in the best interests of the Ethereum network. The review process is open and transparent, and anyone can participate.

—  EIPs help ensure that improvements to the Ethereum network are well-thought-out and have broad community support.

—  EIPs enable the Ethereum blockchain to be responsive to the evolving blockchain environment, implementing changes that will benefit the community and the network itself.

In recent months, there has been a lot of talk about changes to the Ethereum blockchain – for a bit more on The Merge, check out this article.

But did you ever wonder how changes to the blockchain are initiated?

For the largest part, any changes to Ethereum have their origins in the Ethereum Improvement Proposal (EIP) process.

The Ethereum Improvement Proposal (EIP) process is a key part of the Ethereum protocol and ecosystem.

But what exactly are Ethereum Improvement Proposals, how do they work and why do they matter? Let’s take a look.

What is an Ethereum Improvement Proposal (EIP)?

An Ethereum Improvement Proposal, or EIP, is a formal proposal to alter some element of the Ethereum network. EIPs can range from small improvements, like clarifying existing features, to major upgrades like changing the network’s consensus mechanism – an overview of the process can be viewed here at EIP-1, which standardized the procedure for all EIPs since that point.

Broadly speaking, there are three types of EIP.

Standards track EIP

Standards track EIPS are any type of improvement that will fundamentally impact the way the blockchain operates, or functionalities and features it offers – this includes changes to the consensus protocol, amendments to block validation rules, or any change that affects the interoperability of applications using Ethereum.

These might relate to networking, or introduce new token standards, for example.

Where the amendment in question is a core development (ie, one that would result in a hark fork) it will require specific action by the Core Development Team in order to be enabled. We’ll come back to that shortly.

Meta EIP

Also considered process EIPs, these are generally changes to one of the off-chain elements of Ethereum, such as procedures, decision-making processes or changes to the tools or environment used in Ethereum development.

Informational EIP

An Informational EIP provides information or guidelines on a given point to the Ethereum community, but does not propose a change to the network, or require to be implemented.

To summarize, then, EIPs are either focused on on-chain amendments such as changes to the protocol or new token standards (the most significant of which means a full hard fork for the blockchain); they may relate to off-chain processes and decision-making procedures that do need to be followed by the network nodes once ratified, but don’t concern the function of the blockchain itself; or they may simply be advisory guidelines for the community, which don’t need to be accepted or actively implemented by the community even once they are finalized.

How are EIPs processed?

The details of how an EIP is considered, debated and implemented depends on the type of proposal it is – let’s look more closely at those now.

Who considers new EIPS?

No matter what type of proposal is in play, there will be some key entities involved in the consideration process:

  • The EIP Author/Champion – this is the person who has authored the proposal and is now putting it forward for consideration.
  • Ethereum Editors Team – also known as the Cat Herders of Ethereum, the editors are tasked with reviewing EIPs for technical accuracy, spelling and grammar. They work with the author to ensure proposals are in the correct format to be progressed to the community review phase on GitHub.

The editor team (all elected members) consists of some of the original Ethereum developer team, ex- developers from other platforms, as well as researchers and software engineers. 

These individuals are valued for their deep knowledge of Ethereum, and the blockchain space. Hence, they collectively wield significant influence over the EIP process.

  • Ethereum Core Developer Team – the core dev team are prominent developers and researchers who actively work on the network’s node software, and have a key voice in technical discussions around new proposals.
  • Ethereum Community – end users of the Ethereum blockchain who want to have a voice in its future.

How are new EIPs processed?

The approval process for an EIP bares some similarity to the passing of a new law, with various phases of discussion, amendment and review. While there are variations to this process depending on whether or not the EIP is a core proposal, all EIPs follow a standard process that includes the following stages:

  • Draft – this is the phase prior to the EIP being published on GitHub. To be accepted onto the official Ethereum repository on GitHub it must first be checked for errors and properly formatted by an editor. This ensures all proposals are uniform, make technical sense, and outline a clear proposal the community will be able to assess objectively. Only then will it be published on GitHub for wider review.
  • Review – at this stage, the author, or champion, of the EIP will mark the published proposal as suitable for peer review.
  • Last Call – once an EIP has progressed through the earlier stages of peer-review, it then awaits review by the wider public. EIPs must remain at this stage for at least two weeks to give the community adequate time to read the proposal, scrutinize it and express opinions.

At this point, the proposal may be sent back for further review by the author, if deemed necessary. Alternatively, if the proposal remains here for 6 months or more and is inactive during this time, it will be moved to “stagnant”, which removes it from review until a later date.

  • Final (Non-core) – the Final phase sees the EIP reach its final standard, with no further changes required before adoption by the community. 
  • Final (Core) – for core EIPs, a further phase exists beyond the Final stage, with the Core Dev team required to implement the now ratified amendment into the client node software for it to be enabled.

Why do EIPs matter?

EIPs allow adaptations and improvements in the network – this allows the blockchain the flexibility to meet the changing demands of the blockchain space. Moreover, they enable open collaboration through inputs from the community.

EIPs are important as they enable Ethereum to be flexible, and constantly improve and develop.  By submitting all proposals to a rigorous community and peer review process, EIPs ensure that changes to the Ethereum network are well-thought-out and have broad community support, making the entire process inclusive yet accurate.

Ethereum Governance – how protocol changes are managed

It’s worth mentioning that the blockchain ecosystem features different mechanisms for making changes to blockchain protocols, with varying degrees of decentralization. 

On-chain decision-making 

Some more recent blockchains are embracing truly decentralized community governance, via on-chain decision-making. This is executed via governance tokens

Here, changes are already written in code, and all that remains is for them to be implemented on-chain once approved. Tokens are programmed to be able to register “votes” on the blockchain, enabling the community to decide on changes and upgrades as a decentralized organism, and implement them with immediate effect. Would you like to participate in the Ethereum Improvement Proposal? Buy some ETH and hold them in the most secure Ethereum wallet.

Ethereum’s off-chain decision-making

On the other hand, changes to the Ethereum protocol happen via the informal process of discussion and debate, set out above – in other words, the decision-making is off-chain.

Although anyone in the community can propose EIPs, in reality these will only be vetted and debated by the Ethereum Editors, the Core Dev team and the community’s most active members. And for core EIP’s that involve a hard fork (such as the Merge), ultimately only the Core Dev Team can implement the amendments into the network’s clients to make this possible. This creates at least one element of the process that is fairly centralized.

So on balance, although Ethereum Improvement Proposals are inclusive to a degree, very small (but very qualified) hierarchy, such as Core Devs, Editors and the most active community members, heavily influence the process and how much support a momentum a proposal will garner – there’s a definite hint of politics at play.

Key Ethereum Improvement Proposals (EIPs) 

To give you an idea of exactly how EIPs are used – and the impact they’ve had – let’s take a quick look at a couple of the most significant examples from recent years.

NFTs

Non-fungible tokens – a growing market with a current value of $3bn – were the product of the EIP process, with EIP-721 responsible for ushering in the new token standard initially.

Gas Fees

Meanwhile, EIP-1559 fundamentally changed the fee structure for how transactions on Ethereum are processed and prioritised. On a blockchain where gas fees are a constant source of debate, this is a great example of a significant amendment that started life as a humble improvement proposal.

The Merge

Perhaps the most prominent example of EIPs at work is the Merge, which was initiated by EIP-3675. This proposal saw the Ethereum blockchain switch from its original proof-of-work consensus mechanism to the less energy-intensive Proof-of-stake system, with the aim of bringing greater scalability and efficiency to the entire blockchain and its ecosystem.

An evolving blockchain for an evolving system

As the Ethereum blockchain continues to evolve, Ethereum Improvement Proposals play a vital role in shaping its future, and ability to overcome current limitations.

They allow the community to improve the network through open collaboration and understanding exactly how the process works. It also leaves the door open for anyone to assist with these improvements: you actually get to have a say. Check out EIPs to learn more about how Ethereum network upgrades – you could even submit your own proposal.

Now you know how this process works, you’re free to submit your own – you never know, you could be the author of the next chapter of Ethereum.


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