Since its inception in 2018, the EOS network’s infrastructure has been run by a group of block producers who are incentivized to maintain network stability and performance through inflation rewards which are distributed to block producers. Recently the developers of EOSIO, block.one, have proposed a new framework for rewarding block producers which eliminates bpay and increases annual inflation from 1% to 3.8%. As a team, we have spent an extensive amount of time reviewing this and other proposals from the community. The following post is a summary of our team’s feedback on the proposal.
A New Future for EOS HODL’ers?
As a concept, we support a small increase inflation for the purpose of rewarding long-term locked up staking or other holding behavior which requires token holders to contribute to the community (such as forgoing the ability to sell in return for rewards). These kind of rewards disproportionately benefit individual community members that contribute and believe in EOS as a platform at the expense of exchanges and other short-term speculators.
The proposal from block.one, however, suggests a jump from 1% to 3.8%, which, after discussing with community members and existing token holders, is perceived by many as “too much inflation, too fast”. We suggest an additional 0.8% bump inflation to be set aside for the purpose of making EOS a more popular deFi investment vehicle. Specifically, we support the allocation of a 0.8% bump in inflation to be donated to REX along the lines of EOS Nation’s alternate proposal, albeit for a lower amount (EOS Nation proposes a jump to 3.8% as well).
Penalizing Block Producers for Missed Blocks
Block.One proposed penalties for missed blocks by active block producers.
While in reality missed blocks are a rare occurrence for the network (All BPs except for one were at over 99% availability), the gesture which our team fully supports.
Elimination of bpay
The elimination of bpay is a tricky matter. We believe the pay gap mentioned in the block.one between BP #21 and #22 may be a driving force between the competitive nature of voting. In our view, the more competitive the voting landscape is, the more block producers will compete against each other to provide the infrastructure that will ensure they can hold on to community votes. Community votes, as apposed to exchange votes, impose strict voting criteria and require BPs to run solid infrastructure with high availability. If this voting plateau” is removed, the community votes which are currently critical for block producers to stay in the top 21, would no longer be the lynchpin and force for basic standards that they are now. For this reason, we do not support the removal of bpay.
As a community, we must continue to innovate and we hope that additional inflation can be provisioned to encourage positive community behavior such as rex staking and locking up tokens. At the present time, we prefer the EOS Nation code proposal on the basis of both code and concept. That said, we believe that the block.one proposal is a good foundation to continue discussion and further development.