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A New EOS Economic Alignment Proposal: Eden as a Special Supervisor

Abstract: This article proposed a new EOS economic alignment in which Eden is a supervisor and an eco-development foundation.

About two months ago, I was excited by the New Economic Alignment proposed by Block.one. I was excited because I had sent a similar opinion to Dan’s Reddit blog, Even though I didn’t know whether there’s any relevance.

Recently, there are more and more things about Eden throughout. And I have joined several communities on Wechat. One day, I realized that the New Economic Alignment is significant to Eden. In the New Economic Alignment, I supposed it will have many tokens just staked for earnings, and these tokens will as the supervisor to the BPs. And Eden can appeal to take the abusing BPs out.

When I sent my opinion to a community, Francis Sangkuan, an Eden member, said only give earnings to staked but not vote to BPs sense like Eden buy votes and system pay for it. Then, I suddenly realize it would be great if the new economic alignment let Eden uses the only staked token’s right to supervise the BPs.

Furthermore, I believe it’s great if Eden receives part of the system’s inflation as the eco-development foundation.

The new economic alignment I propose

The picture upon almost has expressed all my points. Here the significant points:

1. How to allocate the system inflation?

Divide the staked token into three parts: [staked_no_vote], [staked_delegate_to_eden], and [staked_vote_to_bps]. And three parts can free switch to each other.

Divide the system inflation into three parts in some proportion. one part as the BPs’ reward, one part sending to Eden as the eco-development foundation, and one part sending to the [staked_no_vote] and [staked_delegate_to_eden] token pool as the stake earnings. And the tokens in [staked_no_vote] and [staked_delegate_to_eden] have a same APY.

The tokens in the [staked_vote_to_bps] pool do not gain the system inflation, because the BPs have paid them for their votes, directly or indirectly! It is significant to the new economic alignment. It makes sure Eden has enough power to supervise BPs. Otherwise, the new economic alignment will lose.

Let’s suppose 1% still to reward BPs, 0.5% sending to Eden as the eco-development foundation, and 1% sending to the [staked_no_vote] and [staked_delegate_to_eden] token pool as the stake earnings. Then, Eden’s eco-development foundation will receive about 5,150,000 EOS per year. Because BPs and staked pools receive the same amount of inflation and BPs have to pay some fees, the tokens in [staked_no_vote] and [staked_delegate_to_eden] together would always more than the amount of [staked_vote_to_bps]. And if tokens in [staked_delegate_to_eden] equal to [staked_no_vote], the right of vote Eden receive will always more than each BP receive. So, Eden would always be effective as a supervisor.

2. The importance of [staked_no_vote] staked pool

The future is unpredictable, we can not guarantee Eden and any other community works well. The [staked_no_vote] staked pool is a selection for those who neither believe Eden nor want to vote for BPs. Reserve this selection makes Eden’s right to vote justice. It’s the token holder’s selection, not just because of the stake earnings!

3. Eden can only send a negative vote

Eden in the EOS system is a supervisor. Eden is not supposed to determine which ones are the BPs. Eden is supposed to take the abusing BPs out. So, I think Eden can and only can send a negative vote would be great. (A negative vote is relative to the votes to BPs. The votes to BPs are the positive votes.) The votes a BP has equal some token holder vote to them minus the negative vote Eden sent to them.

And Eden community must formulate a clear rule to use the negative vote. Like “If BP …, then …”

4. 1 EOS 1 vote

Maybe you have minded if the new economic alignment executes, the votes a BP needs would suddenly cut down. “1 EOS 30 votes” may make someone holding huge tokens control all of the top 21 BPs. That’s awful.

So, I propose a change to “1 EOS 1 vote”. Token holders who have huge tokens may still control many BPs, but they must divide their votes. It makes others have mort possibility to become a BP.

5. Inflationary penalty

I truly agree with the inflationary penalty Block.one proposed.

“Proposal: We are proposing that Block Producers who underperform, or fail to produce blocks at their designated time, will create a penalty effect that decreases the total inflation in the system.”
---- Stake-Based Voting and Rewards: A proposal to Increase economic Alignment between EOS Participants (Block.one)

Expectations of this new economic Alignment

In this new economic alignment, Eden supervises BPs, and the token holders supervise both Eden and BPs.

In the current EOS system, as we see, BPs have to buy and exchange many votes. BPs cut down their infrastructure to keep themselves profitable. Each party in the system is a prisoner in a prisoner’s dilemma.

In the new economic alignment, under Eden’s supervise and the inflationary penalty, BPs have a motivation to keep themselves performs well.

And the new economic alignment also solved the problem that there’s not a foundation to support the projects developed on the EOS blockchain. Eden receives a part of the system inflation and allocates it in a truly democratic way. It’s significant to the EOS blockchain. I believe it will make the EOS blockchain powerful and prosperous.

In the end, please feel free to discuss this proposal with me.

6 Likes

I like your proposal. I am trying to conclude what you are proposing. Please correct me if I am wrong.

The main idea of your proposal is “let Eden uses the only staked token’s right to supervise the Block Producers”, which mean token holders proxy their vote to Eden. Then let Eden filter out unqualified BPs.

To my understanding, here is what you are proposing:

  • [staked_vote_to_bps] only inflated 1% to reward BPs

  • [staked_no_vote] 1% to stakers, plus 1% to reward BPs. Network totally needed to inflate 2%

  • [staked_delegate_to_eden] 1% to stakers, plus 1% to reward BPs, plus 0.5% to Eden development budget. Network totally needed to inflate 2.5%

With 1 token 1 vote mechanism, the token holders have to choose control the network [staked_vote_to_bps], or give up the network control for staking reward [staked_no_vote], or trust Eden to supervise BPs but also can earning staking reward [staked_delegate_to_eden]

But I have a question about [staked_delegate_to_eden], If Eden do not have right to select BPs and the token holders have delegated their vote to Eden, who is going to choose the BPs? Do you means the token holders still have the right to choose BPs but Eden have to right to filter out those selected BPs?

2 Likes

Correct! And about the question, there are many different types of token holders. Some can be BP themselves, some’s tokens be controled by others such as Exchanges, and some can get higher APY from BPs than just staked, and the others staked in system would be the best way.

There would be a equilibrium.

They are different token holders. They are three parties. One choose BPs, one trust Eden, and one just staked to see.

But do you mean the token holders who trust Eden still have right to choose BPs? Because you said

Eden is not supposed to determine which ones are the BPs.

May be “negative vote” is completely new concept that never appear in EOS network, so I don’t understand how it works…

No, they can’t. They can’t choose BPs when they delegated to Eden. And they can’t delegate to Eden when they choosed BP.
They are mutually-exclusive event.

Let’s assume they can do this. Then, BPs would buy vote from who delegated to Eden. We can predict almost all of us will sell to them and nobody in [staked_no_vote] and [staked_vote_to_bps]. If so, the Eden’s right of vote wouldn’t has justice. All of the selections are because of money.

Eden can decrease the number of votes which vote for the BPs, by using the votes which delegated by token holders who votes for Eden proxy. But Eden cannot vote for any BPs. This is the meaning of “negative vote”. Am I corrected?

Yes, you are correct.

1 Like

Add a new significant point of the new economic alignment I just thought.

6.proposals approached when 2/3 staked tokens (the tokens delegated to Eden and BPs if they approached, regardless of whether active or not)

The proposals are approved when 15/21 active BPs approached. It’s sense reasonable under the sitting economic alignment. They represent most of the tokens involved in the system government regardless of whether why the tokens vote for them.

But for the new economic alignment, 15/21 active BPs cannot represent most of the tokens involved in governance yet. There would be a large part of these tokens delegated to Eden or just staked not vote.

I think it’s necessary to redefine when a proposal be passed. I think it should be: 2/3 of all tokens involved in government approached this proposal.

For the new economic alignment, it might be 2/3 staked tokens approached this proposal.

But, regarding the low activity of the [staked_no_vote], there should be some special handling methods. It might just ignore this part of tokens. But there’s another method we can extract the active tokens of them. We can give the tokens in [staked_no_vote] both positive and negative voting rights to the proposals.

How do the negative votes count? We can minus the negative votes both numerator and denominator in the statistic.

([votes of approached BPs] + [votes of Eden] + [positive votes from staked only] - [negative votes from staked only]) / ([votes to all Bps] + [all votes of Eden] + [positive votes from staked only] - [negative votes from staked only])

If the value of function upon greater than 2/3, the proposal be approved.

7.The amount of Eden receive from system inflation depends on the approval rating of token holders

In this new economic alignment, Eden is a government. And the inflation Eden receives is the tax this government achieves. Then, I think it is better than the amount this government achieves depends on the approval rating of “their people”.

How can we know the approval rating? In this new economic alignment, the tokens in [staked_no_vote] and [staked_delegated_to_eden] pools always have the same APY. The selection whether delegate to Eden or just staked will depend on the trust to Eden the token holders have. So, we can use the amount of the tokens in [staked_no_vote] and [staked_delegated_to_eden] pools to evaluate the approval rating Eden has.

Let us assume that Eden begins to receive system inflation when the approval rating is more than 30%, and 70% reaches the top 0.5%.

R = the inflation rate Eden receive
f(K) is a function of K
K = [staked_delegated_to_eden] : [staked_no_vote]

a. If K < 3/7 (the approval rating would be 30%), then R = 0.
b. If 3/7 < K < 7/3 (the approval rating would be 30% - 70%), then R = 0.5% * f(K).
c. If K > 7/3 (the approval rating would be more than 70%), then R = 0.5%.