ECIP 1112: Olympia Treasury Contract

Author	Cody Burns, Chris Mercer
Discussions-To	https://github.com/orgs/ethereumclassic/discussions/530
Status	Draft
Type	Meta
Created	2025-07-04
Requires	1111

Simple Summary

Redirect the BASEFEE introduced by ECIP-1111 (EIP-1559) into a protocol-defined on-chain treasury contract — the Olympia Treasury — instead of burning it. This enables sustainable, transparent, and decentralized funding for Ethereum Classic’s development, infrastructure, and security, without introducing inflation or trusted intermediaries.

Abstract

This ECIP specifies the creation and integration of the Olympia Treasury, a protocol-level smart contract deployed at a fixed address on Ethereum Classic. Upon activation of the Olympia Upgrade (ECIP-1111), all BASEFEE revenue from EIP-1559 transactions will be redirected to this treasury contract instead of being burned. The treasury will serve as a decentralized and transparent funding mechanism to support Ethereum Classic’s long-term infrastructure, ecosystem growth, and client development. The contract will be immutable, externally auditable, and interoperable with a permissionless governance system (Olympia DAO) responsible for disbursing funds via on-chain proposals. The design follows emerging standards used by networks such as Ronin, Celo, and Mantle, which also redirect basefee revenue to protocol-owned treasuries.

Motivation

Ethereum Classic has historically lacked a sustainable, transparent, and decentralized method to fund protocol development, infrastructure, tooling, or community growth. Funding has been dependent on short-lived grants, centralized donors, or nonprofit foundations — many of which have shut down or withdrawn support.

With ECIP-1017 reducing block rewards over time, Ethereum Classic must establish a new funding model that does not rely on inflation or centralized discretion. Redirecting the BASEFEE from EIP-1559 to the Olympia Treasury enables Ethereum Classic to capture value from network usage and reinvest it into the ecosystem. This aligns incentives between miners, users, and developers, strengthens the long-term security budget, and ensures a credible, on-chain funding pathway for public goods — without compromising immutability or Proof-of-Work.

Specification

Contract Address

The Olympia Treasury contract SHALL be deployed at a fixed, deterministic address. This address is hardcoded into Ethereum Classic’s consensus rules as the recipient of the BASEFEE defined in ECIP-1111.

Address (placeholder): 0x0000000000000000000000000000000000OLYMPIA
(final address will be published prior to testnet deployment and agreed by client implementers)

The final address will be derived using the CREATE or CREATE2 opcode during network upgrade coordination and MUST be reproducible by all client implementations.

Funding Source

100% of the BASEFEE collected under EIP-1559 SHALL be transferred to the Olympia Treasury contract.
This transfer SHALL occur at the protocol level and be enforced by client consensus rules beginning at the activation block of the Olympia Upgrade (ECIP-1111).

Contract Properties

The Olympia Treasury contract MUST meet the following conditions:

Be deployed immutably with no proxy patterns, upgrade hooks, or owner-controlled logic.
Include no selfdestruct or delegatecall mechanisms.
Emit standard Transfer, Receive, and ProposalExecuted logs for traceability.
Allow public balance and transfer history inspection through standard view methods.
Reject all externally owned account (EOA) withdrawals unless authorized through governance execution.

Governance Interface

The Olympia Treasury SHALL expose a governance interface callable by a designated DAO contract (see ECIP-1113). This interface MUST:

Allow for permissionless proposal intake via governance contracts.
Schedule approved disbursements via release() or execute() functions.
Support multi-step workflows such as milestone-based vesting or time-locked execution.
Log all governance actions transparently on-chain.

The Treasury contract MUST NOT include embedded governance logic. Instead, it SHALL serve as a funding vault governed externally by Olympia DAO through composable smart contract interactions.

Rationale

The Olympia Treasury contract serves as the cornerstone of Ethereum Classic’s transition to a sustainable, self-funded ecosystem. Its design reflects several key priorities:

Security Budget: As block rewards decline under ECIP-1017, Ethereum Classic requires a durable, non-inflationary funding source. Redirecting BASEFEE ensures the network retains a native mechanism to support client maintenance, audits, infrastructure, and protocol upgrades.
Incentive Alignment: By linking developer funding to on-chain activity, the Olympia model creates a positive feedback loop: more dApps and users → more transactions → more treasury funding → better tooling and development → more adoption.
Permissionless Participation: Unlike past funding efforts that relied on closed foundations or private donors, the Olympia Treasury enables any qualified participant to seek support through a public, merit-based process.
Transparency and Accountability: All inflows, proposals, votes, and disbursements occur entirely on-chain. This eliminates ambiguity, prevents favoritism, and builds community trust in how protocol revenues are allocated.
Governance Modularity: Decoupling treasury logic from governance logic allows flexibility in upgrading or replacing governance contracts (e.g. Olympia DAO) without altering the Treasury contract itself. This modularity protects against capture, mismanagement, or design flaws in any single governance system.

The result is a system that reflects Ethereum Classic’s values — decentralization, transparency, sovereignty — while ensuring it can grow and compete in the modern EVM landscape. Similar treasury redirection mechanisms have been adopted by other EVM-compatible networks. Ronin (a sidechain for Axie Infinity) routes its EIP-1559 basefee to a treasury contract governed by its DAO. Celo redirects gas fees to a Gas Fee Handler that supports carbon offset and community programs. Mantle, an L2 rollup, similarly redirects sequencer revenue to a DAO-governed treasury vault. These precedents validate Ethereum Classic’s approach and demonstrate the viability of basefee redirection for sustainable ecosystem funding.

The Olympia Treasury design is inspired by similar EVM-compatible implementations that redirect protocol fees to public goods funding or DAO-governed treasuries:

Ronin Network (Axie Infinity sidechain): Redirects EIP-1559 BASEFEE to Ronin Treasury Contract.
Celo (L1): Directs gas fees to a Gas Fee Handler, which routes funds to carbon offset and community programs.
Mantle (L2): Implements a modular treasury with gas fee redirection governed by MantleDAO.
Polygon CDK (modular L2 framework): Supports EIP-1559 and modular DAO-managed treasuries as part of its rollup architecture for sovereign chains. See Polygon CDK overview.
OP Stack (used by Base, Optimism): Implements EIP-1559 and supports custom sequencer fee splitting, although it does not currently redirect BASEFEE to a DAO treasury. Serves as a contrast to the full redirection model.

These examples validate the redirect model as an emerging standard among EVM networks prioritizing sustainable funding and decentralized governance.

Implementation

The Olympia Treasury will be implemented in the Core-Geth client as part of the Olympia network upgrade.

Client changes include:

Hardcoding the Treasury contract address in consensus logic as the recipient of the BASEFEE in each block.
Redirecting the BASEFEE from EIP-1559 transactions to this address instead of burning it.
Ensuring gas accounting, consensus rules, and transaction validation logic reflect this redirect accurately.

The Treasury contract’s bytecode and deterministic deployment address will be published in the Olympia upgrade release and audited prior to mainnet deployment.

Test cases will be included to validate:

Proper BASEFEE transfer to the treasury address on each block
Balance tracking and event emission from the contract
Compatibility with governance contract interfaces (propose(), release(), execute())
Full testnet replay and consensus validation via Mordor deployments

Backwards Compatibility

The Olympia Treasury contract introduces a change in the default behavior of EIP-1559 by redirecting the BASEFEE to a treasury contract instead of burning it. This alters the consensus logic for fee handling and requires clients to implement the redirect as part of the Olympia upgrade.

Legacy nodes that do not upgrade will remain unaware of EIP-1559 (Type-2) transactions and the treasury address, resulting in a permanent consensus fork. All mainnet participants must upgrade their clients to maintain network compatibility.

This change does not impact legacy transaction formats (Type-0) or smart contracts that do not interact with the treasury. It is fully forward-compatible with existing tooling and dApps.

Security Considerations

The Olympia Treasury contract must be implemented with strict security guarantees:

No Upgradability or Admin Keys: The contract MUST be immutable, with no proxy, delegatecall, or admin modifiers that allow for privileged access or modification after deployment.
On-Chain Verification: All inbound and outbound transactions are recorded transparently on-chain. This ensures that treasury balances and disbursements are fully auditable by the community.
DAO Integration Risk: Governance failures (e.g., malicious proposals or collusion) are possible at the DAO layer. While outside the scope of this ECIP, best practices in DAO design—such as proposal review periods, multi-sig controls, and on-chain voting—should be implemented to minimize abuse.
Client Enforcement: Clients must enforce protocol-level redirection of the BASEFEE to the treasury. Failing to do so risks consensus divergence and breaks compatibility with the canonical Ethereum Classic chain.
Replay Protection: As with all hard forks, clients must ensure proper transaction replay protection for cross-fork safety.

Extensive testing on Mordor Testnet will precede mainnet deployment to validate correct redirection logic, contract immutability, and integration with the Olympia DAO governance system.

ECIP 1112: Olympia Treasury Contract Source