EOS: a proposal for a new governance model
Blockchain

EOS: a proposal for a new governance model

By Alfredo de Candia - 15 Oct 2019

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A while ago, Daniel Larimer published a new proposal of a governance model for the EOS blockchain.

The EOS blockchain allows accounts to stake their cryptocurrencies to interact with the dApps; in addition, staking also gives them the opportunity to vote both for the referendum proposals and for the Block Producers (BP) who manage and maintain the blockchain.

With the REX (Resource Exchange) system, it is possible to borrow an impressive amount of CPU and NET resources at low cost for an entire month. However, the problem is that these resources could be used to have a greater right to vote and thus prompt a BP to enter the top 21, which would result in higher earnings, paying back the initial investment required to vote. 

So to solve these problems, one of Larimer’s proposals is to create several staking pools, 6 to be precise (3 months, 6 months, 12 months, 2 years, 5 years and 10 years) so that those who want to put EOS in one of the pools will have to lock their cryptocurrencies for a considerable amount of time.

This means that they will no longer be able to vote and make a BP prevail overnight.

Each pool will receive 5 million tokens per year which will be calculated according to the staking time; a user can also participate in the income of the pool by paying a fee to access it. The influence of each user’s vote will then be determined by the sum, as a percentage, of the various pools in which they participate.

The funds staked can still be unlocked, but only once a week. For pools with more time, it is expected that it will only be possible to unlock a percentage per week of the entire stake, moving the tokens staked in a smaller pool.

Another interesting aspect of this new governance model proposal is the removal of the staked tokens from REX, so as to increase the scarcity of resources, have a higher profit from the loan and avoid situations that have previously occurred, namely that, with less availability of resources, the price to borrow them would increase and it would be too expensive to use dApps.

Larimer also proposed a new BP voting method: once people have staked the tokens and voted, the 21 BPs will be elected on the basis of 1 token 1 vote, but also as a percentage based on the pool in which the voters participate. In short, BPs will be paid according to the votes they receive and not on how many blocks they produce.

The related BP reward will be minimised to 0.5% of the total supply per year and, in addition, a system of BP reliability has been proposed: a 99% reliable BP will have 90% of the maximum inflation, but if a BP starts to lose blocks and its reliability drops to 97% then even those who vote for it will be penalised, encouraging them to vote only for those who have high reliability.

As far as the tokens owned by the exchanges are concerned, they cannot be used to vote because most of them will be locked into long-term staking contracts.

According to the new EOS governance model proposal, the staking time for REX will be reduced to 3 days and the tokens placed in REX will not be able to participate in the voting.

 

 

Alfredo de Candia
Alfredo de Candia

Android developer for over 8 years with a dozen of developed apps, Alfredo at age 21 has climbed Mount Fuji following the saying: "He who climbs Mount Fuji once in his life is a wise man, who climbs him twice is a Crazy". Among his app we find a Japanese database, a spam and virus database, the most complete database on Anime and Manga series birthdays and a shitcoin database. Sunday Miner, Alfredo has a passion for crypto and is a fan of EOS.

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