Will the EOS Foundation's new Token Economic Model help it get back to the top?

Original | Odaily

Author | Asher

EOS was once considered one of the most promising blockchains in the Layer 1 zone. At launch, EOS was the top five Crypto Assets by market capitalization. On the morning of April 25, EOS Network Foundation (ENF) CEO Yves La Rose proposed a new tokenomics on the X platform and said he would meet with BPs later today to discuss the topic.

As soon as this news came out, according to OKX market data, EOS short term once broke through $0.95, a one-hour pump of more than 12%, and now falls back to around $0.88. **Below, Odaily Planet Daily will take you to explain in detail the new Token economic model proposed by EOS. **

All-round analysis of EOS Token economic model

Review the iterative history of EOS Token economic models

• 2018: Launched EOS Token with a Token supply of 1 billion and an annualized inflation rate of 5%. 1% of Inflation is dedicated to rewarding Block Producers, and 4% is accumulated in the “eosio.saving” account;
• 2020: Due to the lack of a framework to access and spend the assets accumulated in “eosio.saving”, EOS Block producers voted to drop the network Inflation rate to 1% and burned the remaining EOS Token accumulated in “eosio.saving”;
• 2021: EOS Block producers opted to increase network inflation to 3% to bootstrap the EOS Network Foundation. 1% of Inflation continues to fund Block Producers, and another 2% begins funding the EOS Network Foundation;
• 2023: The EOS Network Foundation (ENF) began manually funding EOS Labs as a new entity responsible for investing and rising the ecosystem. The ENF began distributing 0.5% of the 2% network inflation funds to EOS Labs through manual transfers;
• Early 2024: EOS Block producers pass the MSIG to update the system contract, which will automatically pay EOS Labs a 0.5% inflation fee and drop the ENF fee to 1.5%. The adoption of this proposal marks the network’s recognition of EOS Labs as an officially recognized base entity;
• This proposal: The EOS Network Foundation proposes to transform EOS from Inflation Token to a Token with a total supply of 2.1 billion.

New Proposal: Curb Inflation with 2.1 Billion Token Supply, Burn 80% of Total Future Supply

Based on the latest proposal, EOS will move from Inflation Token to a fixed quantity Token of 2.1 billion total supply, as shown in the chart below for the Token supply before and after the proposal:

• Pre-proposal (pre-token burning): consists of two parts, one is the Circulating Supply is 1.15 billion EOS Token, and the other is the total future inflation of 8.85 billion EOS Token, with an annual inflation rate of 3%;
• Post-proposal (post-token burning): Burn 80% of the future Inflation supply (7.8 billion EOS Token). The final actual Token composition is divided into two parts, one is 1.15 billion circulating Tokens, and the other is 950 million will be minted and distributed.

Source: EOS CEO tweet

Specifically, if the new proposal is implemented, the actual Token distribution will be as follows:

• Original Token Supply: 1,150,000,000 EOS, 54.8% of the total supply. The current amount of Token that existed prior to this proposal will remain the same, totaling approximately 1.15 billion EOS Token, with a commitment that no other changes will be made to this initial supply;
• RAM Market: 350,000,000 EOS, 16.7% of total supply. A total of 350 million EOS will be used to develop and grow the RAM market and its encryption community. Specifically, part of it is RAM market making and liquidity supply. 315 million EOS will be allocated for market making and Liquidity supply of Centralized Exchange and Decentralized Finance across long Blockchain. The other part is programmatic RAM procurement. 35 million EOS Token will be used to programmatically purchase RAM from the system’s Bancor pool within the TBD timeframe, and the RAM purchased through this mechanism will be used to support or fund the EOS ecosystem program;
• Stake rewards: 250,000,000 EOS, 11.9% of the total supply. A total of 250 million EOS Token will be used for stake rewards, the release rate of rewards controlled by EOS Block producers, and the proposal proposes to use a logarithmic curve to distribute rewards;
• EOS Network Foundation: 150,000,000 EOS, 7.1% of total supply. EOS The Cyber Foundation will allocate 150 million EOS Token, equivalent to the current 1.5% internet inflation for 8.5 years;
• Block Producer: 100,000,000 EOS, 4.8% of the total supply. To make Block production and network infrastructure more sustainable in the long term, all network fees generated by PowerUC, RAM Money Laundering, and name auctions will be distributed equally among the top 21 Block producers;
• EOS Labs: 85,000,000 EOS, 4% of the total supply. The Token will be used to invest in the rise of the ecosystem, the liquidity supply of ecosystem projects, and partnerships;
• Middleware: 15,000,000 EOS, 0.7% of the total supply. The 15 million EOS Token will be earmarked for public goods funding for middleware development to improve the availability of the EOS network.

The EOS release table under the new Token economic model