As crypto-winter is raging, and at the same time we are getting closer to Christmas and New Year, EOS sidechains are getting ready for launch. Other than with bitcoin, EOS.io forks are code forks, so the chain, including holdings isn’t copied, only the code from repository. EOS holders get airdrops based on their holdings on certain snapshot dates. In Telos’ case that’s the genesis snapshot from June 2. Well since then more than 5 months have passed, so no idea, why they still intend to use this old snapshot. Anyway, that’s the way it is.
Whereas WORBLI, has set a new date for their launch, TELOS hasn’t provided a set launch date, they are working with a checklist, and only when it is ticked off entirely, will they launch. Not the worst approach and apparently a lesson learned from the EOS launch, which was clearly premature. This is where we are at:
Next Go/No-Go decision will be November 20, but doesn’t look like this will end up with a go. Anyhow, let’s have a look at what are the particularities of the upcoming TELOS chain: I’ve said above, that TELOS is a code fork, yet the code is not just copied, it’s quite comprehensively extended, and of you peek at the checklist above is intended to include all the fancy features, that EOS is currently lacking, Worker proposals, BP minimum requirement enforcement, base layer arbitration regulation etc. So will TELOS be the better EOS? Let’s go through the points where TELOS is different:
1) Snapshot capped at 40K EOS
That’s what the first thing was, what you heard about the project and that has sparked a lot of controversy and since this has been discussed ad nauseam already, i wont talk much about it here. The important part is, exchanges wont get the snapshot, and they will not be able to abuse their clients tokens for voting, or otherwise manipulating them for their purposes, as it’s apparently happening on the EOS mainchain. So at launch, there will not be any real whales, and in addition, as Douglas Horn, the Telos head, regularly asserts, although whales can emerge on TELOS, it would be a long way to get there. If TELOS is successful and catches the interest of investors, the price will increase and makes it hard to collect huge amounts. This might work out, might not, at least with a token distribution of only some 300M tokens, the chances are higher this will successful.
2) Governance: TELOS Operating agreement & Regproducer Agreement
Whereas on EOS there is currently a hot debate over having a reduced or rich constitution, TELOS approach is clearly for a comprehensive version, their draft counting 45 chapters and filling over 12 A4 pages. Most notable points of this constitution are that minimum requirements are demanded for block producers, including seamless block production, but also well behaviour (anti-collusion chapters) and transparency. If a BP doesn’t make up for those, any other BP can call a remove-bp-contract that enforces the other bps to take action, so they will be removed from the list of BPs.
Also in order to be a telos member and be able to transact, you will need to opt-in to the agreement. So this point really makes explicit, that also remains somewhat unclear or unenforced on EOS.
Tokenomics: 1% (more in the intitial phase) of inflation is reservced for BP pay, and another 1,5% for worker proposals. Worker proposal operations and execution are clearly defined: proposals require a 1% voting power to be set up for election, and pay a fee of 3% of requested funds. If a worker proposal can’t deliver, bps are appointed to file arbitration.
The document also includes a GDPR clause, which gives you an idea of its comprehensiveness.
3) Governance: Base layer arbitration
Arbitration is clearly at the base layer, with all disputes arising need to be brought to TELOS Core Arbitration, the ECAF equivalent or other arbitration forums, and you waive to bring any dispute to a terrestrial court. The loop hole might be, that both parties may agree to not use arbitration at all. And maybe wanna be players of that addictive eos critter game will happily waive whatever they are asked to in order to start playing…. at least this also excludes appealing to any other court. Interessting approach, i wonder if this could hold at any off chain court.
Another difference to EOS ECAF, is that arbitrators, can nominate themselves and are elected by holders. They serve for a term of about 90 days, with the possibility to be reelected 10 times.
Arbitration is really far reaching and includes things like: lost key restoration, reversal of erroneous transactions, torts for damages caused by dapps etc. and breach of the constitution itself (no financial loss necessary).
A critical factor: all arbitrators handling will be done on-chain, via a couple of smart-contracts, so there should be transparency regarding elections as well as arbitration orders, apparently still a huge scaling problem for arbitration on EOS.
4) Administration: The Telos foundation
Finally there is the Telos foundation, which is charged with promoting the chain, developing core features of the code (not covered by worker proposals) as well as appointing the RAM Administration Director, who is in charge of RAM pricing, more precisely to assure (presumably by market intervention), that the price remains within the official guidance price, some a function close to a central bank.
The foundation is to operate as a DAC, with a board of 12, Members who elect a Foundation director. Althought the scope of the founndation isn’t that vast, and the fact that currently they are only are funded by an initial 6M TELOS tokens (some 100K$), the setup sounds rather exuberant. In addition to that the board will be voted by holders of a special coin, the TFVT (Telos Foundation Voting Token), which is distributed to contributors to the net only (and originally at discretion of the current foundation). Those tokens are non-transferable, and any transaction involving this coins will result in immediate disposession of the coin. In my view all these structures are really excessive. They clearly aim for a bright future, but long term funding is done by the token holders, which would have the power to deplete the foundation.
As I’ve already said, at least on paper TELOS aims to include all those features, that on EOS are currently still under implementation, or partly even discussed. Not the least via the foundation, they will build a heavily governed chain, that follows an idealistic (maybe european-style) governance approach, in opposition to a more crypto-anarchist / law of the jungle governance, that Dan/b1 have fallen back to.
If you go through all those documents and papers it becomes apparent, that they try to pick up a lot of lessons learned from the EOS mainnet-launch, on they other hand the heavy governance might still be open to interpretation for one, but moreover might be quite tricky to enforce. It is also more than unclear if and how this system can be played/undermine and thus rendered ineffective. The series of loopholes to be found in the docs (opt out of arbitration, removing a failing BP requiring still a 2/3 majority vote), raise my doubts, especially if you’ve witnessed how the idealistic stance has been ridiculed on the EOS mainchain.
Having said all this i believe there is a good chance, for TELOS to succeed and occupy a significant place in the EOS ecosystem. In doing so it might play one part of making good on Dan’s promise of a goverened blockchain, in the sense of being one of several competing blockchains, that challenge each other in providing value to the users.
What do you think of Telos’ governance approach?
Did you find what you read informative? Here are some of my older articles: