While we are all waiting for Rex to enter the stage on EOS mainnet, the guys at Worbli recently published a resources economy document, which is to define how Worbli tokens, which like EOS, represent a share of network ressurces like CPU, bandwith (and maybe RAM).
So lets have a look what this is about:
One of the first lines is this:
“An application that requires X% of WORBLI resource capacity requires X% of WBI to stake.“
If i am reading correctly, this means, that a dapp only gets as much bandwidth as they used, for not like with EOS that temporarily unused stake cannot be allocated by other dapps, as on the main chain, where ike during the gambling craze and then you wake up and cant do a single transaction. On the other hand of course resources available will be much more scarce, because unused stake cannot be used by the rest of the chain.
Talking about staking, currently on EOS the only thing that staking allows you is to vote for bps and referendum and once available REX.
On Worbli, there wont be anything to vote upon for quite a while, as bps are appointed for about two years.
So what’s so special about this Ressource Model?
WBI token has a 6% annual inflation rate. 1% of this is going to bps and the another percent will be allocated to the Network fund which equals Worker Proposal fund on EOS (see how every other eos.io chains are not carried away by the loud voices of a ideological ultras) the remaining 4% are reserved for WBI network users who have staked (or locked their tokens).
In fact [this is being discussed on the eos mainnet as well](https://eosauthority.com/polls_details?proposal=holderreward_20190113&lnc=en), but doesn’t look to receive much attention, so unlikely to pass.
How is this supposed to work?
To sum it up, Worbli separates two staking mechanisms, which is intended to establish different incentivation lines for investors and applications.
1) Staking: Stakers (those who run dapps) will receive a partial reward from their ressoureces staked. The lower total staking ratio (network is scarcly used) the higher rewards will be, but it will be capped at 12%. But stakers will always get the 4% of inflation
This is interesting, because it rewards early adopter dapps, whereas with growing usage of the network, this reward will diminish, it’s also incentivising dapp providers to use their own tokens rather then leasing ones, as you can harvest a significant portion of inflation, in addition to saving on leasing costs (which currently maybe would still be negligable).
Applications need to be approved by the WBI foundation, so the potential to declare yourself a dapp to harvest staking returns should be limited, which would be quite lucrative early in the game.
2) Locking: This is meant for investors, who are looking at WBI as investement, and provide their tokens for dapps to lease. They get a fixed annual rate, but it is depending on the utility rate (the tokens staked, as described above):
In addition locked tokens are rewarded with leasing rewards, which are generated from an internal algorithm based lending facility (which isn’t based on Bancor, like REX will be btw.)
All inflation tokens that are not distributed via one of the two models described, will be burned, so the actual inflation will also be variable.
The Worbli ressource model is a complex system, with a lot of factors interwoven. It clearly aims to incentivize different actors differently in different usage patterns of the chain.
It clearly puts early adoption of apps first, and on the other hand, tries to disincentivize excess speculation of investors in a fully used network scenario. As locked tokens also get a revenue from lending, in a scenario at full load, those revenues might turn into a much more significant factor than inflation rewards. At peak times during the gambling frenzy, Chintai had rates of nearly 20%. But the working mechanism of the lending vehicle isn’t described (only that there is a correlation to staking rewards).
Interestingly, in an empty network scenario, effective inflation will be rather low, as unused inflation rewards will be burned, so maybe this will be at 3% (only 1% or less being used for staked and locked tokens), whereas with increasing load inflation rises, which might act out as a measure to counter rapidly rising token prices.
Definitely investors (or speculators), wont be able to gain a lot in the initial stages, as lending fees will be minimal and inflation rewards will also only come with a significant utility usage of the network (e.g. it will reach 2% p.a. at a 10% usage ratio)
They claim, one goal of this model is to keep volatility of resources cost low, which honestly i cant see from this model per se.
Also lets not adopt that speech disorder affecting the use of tenses, which is so typical for the crypto scene: The Worbli Ressource model right now is just that, a theoretical model. Worbli CEO Domenic mentioned a timeframe of around 3-6 months until the mechanism will be implemented and any stakeholder will actually be able to stake or lock their tokens:
For such a resource model to come into effect, it will also require a relevant degree of usage and interested parties. Worbli has recently snouched the eos community by cancelling the sharegrap without proper notice. They claim, that the partners they onboard, will far outweigh what a prolonged sharedrop would have accomplished. I am not here to criticize their decision, and the consequences resulting from it. They didn’t owe anyone anything as for the sharegrap, but of course they haven’t stood up to their word, which does affect reputation, no matter how good an argument.
What it does mean is, that ramping up adoption wont come from the eos.io end and more then ever they will need to be able to demonstrate that they can onboard users via those partners they apparently have closed these glorious deals with. If these come into play, we might even see regular people coming in, those for who eos.io was always meant for anyway. If this works out, and there is increasing usage, we will be able to determine, if this dynamic system will align incentives in the desired way.