As announced by one of the most active Block Producers (BP) on the EOS blockchain, EOS New York, the annual inflation of the crypto was reduced from 5% to 1% today.
Inflation has been officially reduced on $EOS from 5% to 1%. The issuance of tokens to the legacy account “eosio.saving” has ceased. This marks an important milestone where BPs have effectively voted to reduce their own pay among other effects. https://t.co/bpZ6zhAY2i pic.twitter.com/h3Ln4CoNtq
— EOS New York (@eosnewyork) February 25, 2020
In order to understand what is happening it is necessary to first explain that when the EOS mainnet was launched there were 1 billion EOS in circulation with a system of inflation set at 5% which allowed the creation of 50 million EOS each year.
Of these 50 million, 5% of the crypto in circulation, 4% went into a fund called eosio.saving and the remaining 1% was allocated as a reward to BPs, divided into 25% as a reward for each block and 75% as a reward for votes.
This system was implemented in order to make use of the fund to improve the EOS blockchain itself, but so far it has never been used because of some disagreements about its use (other details about the inflation of EOS can be found for example in the free book Mastering EOS, available on Amazon).
With today’s change – with the transaction already approved by 17 Block Producers and pending for the other 46 – the annual inflation is reduced to 1% and the percentage allocated to the fund is completely removed: all the inflation of the crypto will henceforth be shared between the Block Producers of the EOS blockchain.
This change in inflation represents an important turning point for the EOS blockchain and a goal that many have wanted for some time.
Meanwhile Block.one is continuing the project of the decentralized social network Voice, currently in beta and open only to US citizens.
Recently Binance published a report on EOS, analyzing its governance, which is always a bit controversial topic for this blockchain, and its problems regarding the lack of incentives for voting.