EOS Ecosystem Approves New Tokenomics Model; Faces Skepticism and Promise of Growth
Summary:
The EOS ecosystem has agreed on a new tokenomics model, transitioning from an unlimited token supply to a fixed one, introducing high-yield staking rewards and allocating tokens for its RAM Market. The announcement, however, faced skepticism from the crypto community. EOS, which had the biggest initial coin offering (ICO) in the crypto industry at $4.1 billion, has failed to meet ICO expectations, leading to legal disputes and regulatory challenges. The EOS community established its foundation in 2021 to take control from Block.one. Yves La Rose, the foundation founder, sees the new tokenomics as a stabilizer for the token economy and a growth stimulator for the network.
The EOS platform has come to mutual agreement to greenlight a fresh tokenomics blueprint, signaling a "groundbreaking epoch" for EOS token owners and creators. A public statement on May 31 indicated that EOS will switch from an inflating token supply, capped at 10 billion EOS (EOS) tokens, to a static supply of 2.1 billion tokens. The EOS Network Foundation (ENF) stated that this shift is designed to counteract inflation. Meanwhile, the thoroughly Inflated Value (FDV) of EOS was decreased by 80%, and cycles of halving implemented every four years. An additional adaptation is the inclusion of "high profit staking rewards" that come with lockup, despite the specific yields remaining undisclosed. The EOS Foundation is set to allocate 350 million EOS tokens reserved for their RAM Market, a platform where creators and users can acquire RAM (Random Access Memory) in order to establish and employ applications on the network. The announcement was met with suspicion and uncertainty from the crypto community. An anonymous user named Xalytics voiced his confusion on this RAM announcement, saying that as an EOS holder since the 2017 ICO, he was unsure how to react to the news. In response to these recent changes, the EOS token remains steady at $0.80, showing no significant changes over the last 24 hours. As per CoinMarketCap, the token has dropped by 21.6% since its original launch. The EOS platform is credited for holding the most substantial initial coin offering (ICO) in the crypto sector. Block.one, the initial proponent of EOS, successfully garnered a staggering $4.1 billion in 2018. Yet, this victory was shadowed by unfulfilled ICO promises, legal confrontations, and regulatory issues. Block.one agreed to a settlement of a $24 million mandatory payment in 2019 with the U.S. Securities and Exchange Commission (SEC) for operating an unauthorized security offering during its ICO. Another legal complication arising from the ICO was a class-action lawsuit lodged by the Crypto Assets Opportunity Fund accusing Block.one of several falls promises during the ICO including the fictitious pledge of investing a further $1 billion in the EOS network. In 2021, Block.one resolved this issue with a payment of $27.5 million. The EOS community took independent control in 2021, creating its own foundation to take the reins from Block.one, which was widely viewed as failing to deliver on its commitments. Original block producer Yves La Rose assumed the role of foundation founder and CEO. According to La Rose, the tokenomics overhaul is “a pivotal moment for the EOS fraternity.” He added: “This strategic modification will stabilize the token economy and stimulate active participation and expansion within the network.” EOS, a layer-1 blockchain, is built to support decentralized applications, and initially portrayed itself as a formidable competitor to Ethereum. In their early days, they branded themselves as the "Ethereum killer".
Published At
5/31/2024 6:44:05 PM
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