EOSIO, the blockchain software that runs the mainnet token EOS, currently has a built-in and automatic inflationary aspect to it, to pay block producers and to fund a worker proposal. Right now that means that annually speaking, the total EOS supply is inflated by 5% in the form of newly minted coins: 1% of which automatically go to the block producers in exchange for running and securing the network activity, and the other 4% goes into a smart contract called the worker proposal fund.
More on how much 1% and 4% of the total supply means in, say, US dollars, in just a bit. First, I’ll explain the fund a bit more.
The worker proposal fund is meant to be a clever way to have the network create capital through a relatively small amount of coin inflation, accumulating in an account, not unlike a community savings account, that will eventually go toward funding worthwhile projects and tools that will help the EOS ecosystem as a whole, that might not otherwise get funding.
The infrastructure/portal(s) to propose, vote on and green light projects worthy of receiving these funds has not been developed, yet. Nor has an official application process been built, or even the ability to touch these funds, to my latest understanding. (I believe much discussion exists on Telegram and in some EOS forums though.)
But that’s about it. A fund is accumulating newly minted EOS in the background right now. And that 4% is adding up. And quick. It’s estimated to be worth in excess of $400 million (in EOS) by the end of 2018, assuming the price of EOS in relation to USD is around $7. Hoping and assuming EOS will be worth more than that, and the $400 million by year’s end goes up considerably.
Regardless, it’s hundreds of millions of dollars we are talking about. And that’s just in the first several months (June-Dec). Do the math and we are talking about billions over the next few years.
So, here’s the point of this article: what should we do with this worker proposal fund? Should it be used as intended? Should we lower the %? Or, should we do as Dan Larimer, Brendan Blumer, and Kyle from ‘The Awakenment’ and member of the EOSVibes block producer team strongly suggest, and just burn it completely, and be rid of it?
Have a watch:
That’s a YouTube video of Kyle’s take. I am a big fan of him and his channel. He was probably the first person, aside of Dan Larimer himself, to get me interested and excited about the EOS project in the first place several months ago.
And at first watch, I completely agree with him and his logic. It’s too much money. It’s too easy to manipulate funding by whales. So let’s just press the abort button, burn all the funds already stored away, and be done with it. Right?
Then I watched another video, this time by Clay Albright, another EOS YouTuber:
And now I’m conflicted. The original intent of the fund is sound: fund worthy projects and tools for the EOS community that can’t afford to just create something for free and just give it to the community out of the goodness of the heart(s), in the hopes that they may or may not be rewarded in any way for their efforts. That does make sense.
Open source software is not, by its own nature, sell-able. As you give it away for free essentially. Clay is right to say that even Larimer, who created EOS, did not himself even do this; he opted for an ICO to fund his development of the EOS.io software, and then he open sourced it.
So there’s the 3rd option, the compromise: lower the 4% to something more reasonable. Say, 2%? Or even 1%, which matches what the BPs split on a daily basis, which is reportedly somewhere and sometimes in the neighborhood of $10,000/day worth of EOS (for each of the top 21 elected BPs a piece).
That’s no small amount, and could really help developers in need.
In the end, I say we lower the amount but keep the worker proposal fund, on a trial basis. Give it a chance to fulfill its promise. If it proves to be too easy to manipulate, consider fixing loopholes and making the process of approval more difficult and tamper-proof. And if all else fails, eventually do away with it completely. That’s the beauty of EOS by the way, we can make changes as we go along and learn.
But let’s get it a chance. The EOS community needs all the dapps and useful tools attached to it that it possibly can handle, to thrive and fulfill it’s promise as revolutionary, world changing tech. It’s the only way, in fact, that EOS can ever be called a successful blockchain.
Regardless of its impressive underlying tech, if no one adopts this blockchain in a mainstream fashion and builds upon it extensively, it’s essentially pointless, no matter how elegant a design.
RAM is expensive, even as the market has fallen. And even with a bear market price of EOS, which at the moment is making EOS ridiculously cheap at sub $6.00, the capital needed for developers to afford resources to run on the network remain prohibitively high for most.
This will change with updates voted in like staking rewards for renting out resources via the upcoming REX/SEOS exchange, and RAM prices falling even more when sidechains get implemented. Even still, good developers need up front capital help. And building community tools that won’t necessarily run on the network won’t be aided by those upcoming implementations.
The worker proposal fund is a clever outlet to help with that. Let’s give it a try before we disable it without even a trial run.