Make EOS Nice Once more – that’s the mantra of the EOS Community Basis, which just lately green-lit a proposal to cap the chain’s token provide at 2.1 billion.
Per the Could 31 announcement, EOS will burn 80% of its future token provide, transitioning from an inflationary token capped at 10 billion to a set provide of two.1 billion. And that’s simply the beginning.
Considered one of a raft of updates launched because the ENF started manually funding EOS Labs as a completely new entity final yr, the tokenomics improve will even see the implementation of quadrennial halvings a la Bitcoin. The brand new tokenomics mannequin is “designed to reinforce the financial potential of the EOS ecosystem” and mark a “New Period for EOS.”
A MEGA Improve
The daring proposal, which was put ahead by ENF boss Yves La Rose in April, was handed by a brilliant majority consensus of EOS Block Producers.
“Excessive liquidity with expectation of inflation will increase the issue of market making, and the market worth rating of EOS continues to say no,” learn the proposal, underlining the necessity for such a change. EOS launched with a 1 billion token provide and annualized 5% inflation in 2018.
By decreasing its token’s Absolutely Diluted Worth (FDV) by a gargantuan 80%, the ENF hopes to get rid of inflation and improve long-term worth for the EOS group. The addition of halving cycles, in the meantime, is meant to reasonable the inflow of tokens getting into the market. Of the two.1 billion fastened provide, 1.15bn is already in circulation (54% of whole provide).
Whereas the inflation-tackling measures understandably generated essentially the most headlines, there have been different provisions baked into the proposal. For instance, 250 million EOS tokens (round $142 million at as we speak’s costs) have been allotted in direction of staking rewards for EOS and RAM, with the speed of reward emissions to be ruled by EOS block producers.
EOS staking rewards are anticipated to start by the tip of June with the implementation of REX 2.0.
If the introduction of quadrennial halvings inevitably evoked the specter of Bitcoin, the proposal’s point out of high-yield staking rewards calls to thoughts the DeFi-centric Ethereum and Layer2 panorama.
Elsewhere within the proposal, it was stipulated that 350 million EOS tokens are to be locked in a devoted account managed by ENF and Labs and allotted in direction of nurturing the chain’s RAM market cap, which already stands at $300 million.
These efforts will embrace earmarking funds for the programmatic buy of RAM from the Bancor pool to assist funding of ecosystem initiatives. In time, EOS customers will even achieve the flexibility to stake their RAM – though this contract continues to be below improvement.
RAM is significant to the EOS community’s performance, facilitating operations like account creation and dApp execution.
“This strategic overhaul is not going to solely stabilize the token financial system but additionally incentivize energetic participation and progress inside the community,” predicts La Rose.
For the ENF, the replace is seen as a shot within the arm for the blockchain because it seems to be to revitalize its ecosystem and unlock worth for token-holders, significantly by primitives like staking, inflation protections, and RAM market assist.
