EOS Dev to Make "Blockchain Governance Proposal"

One of the main parts of the proposal by Dan Larimer is that only tokens blocked in a long-term stake contract be given the right to vote
16 October 2019   426

Dan Larimer, technical director of Block.One, the developer of the EOS protocol, has published proposals to improve decentralized network management and increase the reliability of block manufacturers.

The purpose of blockchain governance is to make decisions in the best interest of as many people as possible while minimizing the opportunity for a small group of people to act in ways that benefit themselves at the expense of the community.

Daniel Larimer

CTO, Block.One

In particular, Larimer proposed that only tokens blocked in a long-term stake contract be given the right to vote. The income from it should compensate for the loss of liquidity and be proportional to the duration of token blocking. To this end, Larimer considers it appropriate to introduce a system of market interest rates similar to US Treasury securities.

U.S. Treasury Yield Curve
U.S. Treasury Yield Curve

According to Larimer's proposal, it is necessary to create six staking pools that block funds for: 3, 6, 12 months, 2 years, 5 and 10 years. Users will receive revenue in proportion to the share in the pool. The weight of the vote is calculated by the sum of their shares in each staking pool.

The withdrawal of tokens will be possible no more than once a week and at interest, for example, for 3-month and 10-year terms, withdrawals will cost 7% and 0.2% per week, respectively.

Transferring tokens from a short-term pool to a longer one will be unhindered. The reverse operation is again possible only with interest.

According to Larimer, his proposed system of staking will establish a yield curve based on the balance of the desire for power and higher profits. Few will want to give up liquidity for 10 years in order to obtain greater profitability and power, but for the period of 3 months, with lower income and influence, the majority will agree, he said.

Elections of 21 block manufacturers Larimer proposes to conduct on the basis of the principle “one token - one vote”. The remuneration of producers should be 0.5% of the annual issue and determined in proportion to the votes received, and not on a block basis. The maximum annual inflation of tokens is assumed at 3.5%.

To stimulate reliable production of blocks, voters (stakers) will be punished by falling profitability for skipping blocks by the manufacturer. For example, if the reliability drops to 97%, the yield will already be 73% of the maximum.

Larimer believes that the proposed changes, first of all, will not allow exchanges to vote with user tokens. Smaller players will be able to gain additional influence and high profitability by participating in long-term staking pools, which will increase the decentralization of network management. In addition, it is likely that even the smaller of the block manufacturers will be forced to provide high reliability.

Since tokens from staking pools will not be able to get on the EOS Resource Exchange (REX), this will increase its throughput. REX profitability will be determined by the shortest 3-month pool, which stimulates the transition of users to them. Also, REX tokens will not receive voting rights, Larimer emphasized.

Block One to Issue EOS Resource Allocation Model

The team decided to make this proposal after the recent incident, when during the EIDOS airdrop there were issues accessing REX
24 December 2019   283

Block.one, the company behind the development of the EOSIO blockchain, has published an official proposal to change the current system for allocating CPU resources on the EOS network, according to which users will rent them for a 30-day period.

In November against the backdrop of the EIDOS airdrop, during which users used CPU resources to receive free coins, there were problems with access to the REX CPU resources exchange. At the same time, the cost of resources soared by more than 100,000%. This situation pushed the team to create this proposal.

The REX exchange allows you to stake EOS coins to provide resources owed to users to other users in exchange for a reward.

According to the project’s blog, the current resource allocation system is designed in such a way that most of them, despite high demand, remain unused. Because of this, the EOS network cannot fully realize its potential in terms of performance.

So, during the mentioned incident in November, REX processed about 30% of the resources, and when they were exhausted, a very small part of the remaining 70% was used. This, developers write, is also confirmed by the fact that the blockchain bandwidth was less than half used.

Under the new proposed system, a user will pay a resource rental fee via a smart contract to be granted 30 days worth of CPU/NET from the total supply. After 30 days the rental must be renewed and pricing is automatically adjusted using a market based mechanism, based on changes in supply and demand for CPU/NET resources.


Block.one Team

Block.one representatives say that users will still be able to steak EOS coins in the new system, but instead of resources, compensation will be in the form of commissions from auctions for the sale of EOS domain names, RAM and rental income CPU / NET.

The objective of proposing a transition from a resource entitlement model to a leasing or rental model is to remove the influence of speculative markets over resource pricing. Introducing a rental market with pricing based on overall resource utilization will make resource allocation more predictable and reliable for the community.


Block.one Team

The proposal provides that as the available resources decrease, the rental price should increase. The transition itself should be gradual with the progressive transfer of resources from the old REX implementation to the new one.