The EOS Network Foundation has announced a significant overhaul of its tokenomics during a recent X Space event held on June 12, 2024. Hosted by Stéphane Bisson, the discussion featured key figures such as Yves La Rose, CEO of EOS Network Foundation, Aaron Cox, Chief Brain of Greymass, and Nathan James, Director of Developer Relations at EOS Network Foundation. This event marks a pivotal moment for EOS as it navigates through substantial changes aimed at enhancing its blockchain ecosystem.
Highlights from the X Space Event
During the event, several major updates were discussed, including the formation of a new tokenomics proposal, a drastic reduction in the overall EOS supply, and new allocations for infrastructure support and staking rewards. Some key points include:
- Formation of the Tokenomics Proposal: Developed through extensive community feedback and data analysis since the inception of the EOS Network Foundation.
- Reduction of Overall EOS Supply: The total supply of EOS has been cut from 10 billion to 2.1 billion, effectively burning 80% of the anticipated future token supply.
- Infrastructure Support through Middleware Allocation: 15 million EOS has been dedicated to Middleware to enhance infrastructure development, with the first 5 million entrusted to Greymass.
- REX 2.0 Staking Rewards: Effective July 8th, staking rewards will be distributed from a network allocation, offering attractive APY to boost on-chain TVL and removing the vote proxy requirement.
- Allocation of 350M EOS to RAM: Primarily for market-making efforts between RAM and EOS, enhancing liquidity and accessibility.
- Redirection of System Fees to Block Producers: With the REX 2.0 upgrade, fees from PowerUp, RAM trading, and Name Auctions are redirected to top block producers.
Tokenomics Proposal
Yves La Rose explained that the new tokenomics proposal emerged from a comprehensive review of the incremental changes made in EOS over recent years and an assessment of practices within other blockchain ecosystems. The goal was to integrate lessons learned and align EOS more closely with industry best practices. This involved gathering extensive feedback from a broad spectrum of EOS community members, including stakeholders, block producers, token holders, and developers.
Impacts On EOS Overall Supply
Under the original EOS code, there was a token supply cap of 10 billion, which would have taken approximately 72 years to reach. The new tokenomics approach has significantly altered this by retiring or burning about 80% of the future token supply, setting a new maximum supply limit of 2.1 billion tokens. Concurrently, tokens were issued to reach this new cap, with 365 million tokens made immediately liquid and the rest set to be issued gradually over the next 24 years, following a halving cycle similar to Bitcoin’s.
A Diverse Funding Framework
The updated tokenomics of EOS involve the full minting of the 2.1 billion token supply, with some tokens already circulating and others vested to be released gradually. The strategic reduction in issuance, which will halve every four years, is designed to align incentives for entities to deploy and utilize their tokens effectively, fostering sustainable growth within the EOS ecosystem.
Aligning Block Producer Incentives with Network Fees
With the introduction of REX (Resource Exchange) 2.0, network fees will begin flowing to the top 21 active block producers (BPs). This change, scheduled for July 8th, aims to ensure that block producers are adequately incentivized to support increased transactions and network utilization.
REX 2.0 Staking Rewards Overview
The new allocations for REX 2.0 staking rewards total approximately 267 million EOS, with an initial annual issuance of 31.25 million EOS for the next four years. The staking function and the allocated tokens will go live on July 8th, 2024, promoting longer staking durations and providing competitive returns.
Middleware Allocation
The Middleware bucket, allocated 15M EOS, aims to create essential connective tissue that links users, token holders, the software, and the platform. Greymass, having received 5M of this allocation, focuses on improving the onboarding experience for new users on EOS and other Antelope chains.
Enhancing RAM Utility on EOS
The new RAM bucket includes 350M EOS designated primarily for market-making efforts for RAM and EOS. This allocation aims to create additional token pairs, further increasing liquidity depth and accessibility of EOS and RAM.
The Path Forward for EOS
The recent X Space event provided a comprehensive overview of the significant updates and changes to EOS tokenomics, shedding light on the new staking rewards, RAM allocation, middleware development, and the realignment of block producer incentives. These discussions underscored the collaborative efforts within the EOS community to foster sustainable growth and enhance the functionality of the EOS ecosystem.
As EOS transitions into this new era, the community’s engagement and feedback will be crucial. For those who missed the live event, the full recording of the X Space discussion is available for listening.
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