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Do we need inflation to jump start EOS?

This post is in response to Yves’ proposal for a 2% inflation to start the EOS Foundation.

I generally agree that unchecked inflation is bad, but in this case (where EOS is right now) it is much needed. Inflation in EOS at 1% is probably the lowest among all crypto with inflation in their tokenomics. Originally it was 5%. We as a community, voted to cut it down to 1% and even burnt a significant amount accumulated in savings. This has turned out to be both the right and the wrong decision in hind sight. Right decision because we weren’t ready or well equipped then to make use of that inflation for “worker proposals”. Wrong decision because burning savings completely cut off any funding and starved us from significant progress. Now we have fallen behind a lot of other crypto projects that were way behind us.

However, the EOS community has matured. We’ve realised that funding is needed and we are ready for it. With entities like Eden and Pomelo we are in a good place and have a fairly good idea on how to make this work. We are in a more solid footing than we’ve ever been before. There is a certain sense of renewed vigour in the community.

2% inflation to jump start the progress in EOS is a very small risk we can afford to take. It can always be turned off. I do think that in the long run, we should try to stop inflation or even make EOS deflationary. We can achieve this by focusing on what I believe is EOS’s greatest strength: Transaction speed.
We know EOS is capable of 4000tps(in the future we may be able to greatly exceed this). If this is consistently sustainable(BP experts, please chime in here) that equates to close to 350,000,000 transactions per day. That is the potential of EOS. With the new PowerUp model, assuming a modest cost of .001 EOS per transaction, this amounts to 350,000 EOS in earnings per day or almost 128,000,000 EOS a year. This would amount to almost 13% of total supply going into REX. If we were to distribute 2% to EDEN and EOS Foundation for funding projects, 8% to the token holders as rewards, 1% for Block producers, we would still have 1.8% left to burn to make EOS deflationary if we wanted to.
Hence the greatest focus in EOS should be on projects that are not only great ideas but projects that also promote transaction volume. To get to that point from where we are at present, we need that 2% inflation.
What Yves (with Dan’s backing) is proposing for the EOS foundation is an excellent idea but I believe EOS Foundation should be the administrative/executive body within EDEN on EOS not a separate entity. It would only be a distraction. Within EOS, we need to collaborate not compete. EOS’s biggest weakness has been too much decentralisation. Too many trying to do the same thing individually without any coordination. This has led to haphazard efforts that went nowhere. I think with EDEN, we have a real chance. Many heads are coming together in a coordinated way to work together. If we can reformulate Yves’ proposal within what EDEN is trying to achieve then it would be extremely powerful.

I also think that EDEN needs permanence. Currently, EDEN is just based on volunteers. There is no permanence to the way it’s structured (there are plans for this from what I’ve heard). We would continually see changing faces every election. It will never succeed in it’s current form. Nobody is going to work for ever without getting paid. Let’s be real. I would rather prefer a tiny portion of the inflation be used to hire and pay permanent and dedicated employees. This is where I believe EOS Foundation would fit perfectly. The foundation would manage the budget, keep everyone accountable and keep EDEN running. The elections would produce the leaders who bring the ideas and support of the community to the forefront. Together, EOS would have a legitimate centralised/decentralised structure.


Great, you have expressed most of my idea, mostly agree! we need inflation to jump a new start EOS!

1. Added reasons:

  • 1.1 “burning savings completely cut off any funding and starved us from significant progress.” We have burned about 68M EOS in 05/2019 and 02/2020, actually we need EOS ecosytem to be prosperous firstly, to fully release the potential value of EOS. That’s why we need inflation to afford long-term funding. Decrease inflation 5% to 1% did not increase EOS value, which have been proved by the market.

  • 1.2 "EOS’s biggest weakness has been too much decentralisation. ", now Eden reorganized EOS community and afford an effecitve fund distribution mechanism, this is a great innovative social system based on blockchain, to keep organized and decentralized. That’s why we support Dan’s talent so much!

  • 1.3 “2% inflation to jump start the progress in EOS is a very small risk”, 1.68M EOS /month ( $7M /month), EOS ecosytem has waste to much time, we need this to fill the void of past 3 years ASAP.

2. Added 2 ssues:

  • 2.1 “EOS is in a state akin to exsanguination.” as Yves said. So how could we stop bleeding? I think we need a more inflation to encourage EOS holders to voting really good BPs, rather than give up the right by storaging in Exchange, or do nothing by unstaking, or earn profit by giving to a proxy, have no voting profit is accelerating worsen this matter. If distribute 1%-2% inflation to voters, the would get 2%-6% inflation profit witch will hedge inflation, just like buying an inflation-related bonds. KEEP the voting independent, effecitve and stable, then KEEP really good BPs in the top position, so INCREASE the driving sources for EOS long-term ecological development.

  • 2.2 “I see it as a means of coordinating the bps to effectively transition to Eden.”, “The EOS community needs a transitional leader to navigate the journey from stake-weighted decision making toward fractal democracy.” as Dan said. Then how to set the EOS foudantion board of directors and the “temporary” relationship with Eden become key issues to discuss. More questions asked by @ChrisBarnes check here: My Response to the EOS Foundation Proposal

Fight inflation, get Dan to pay for himself, get Dan out of EOS, don’t allow Dan to tell EOS what to do.