The first few weeks since the EOS mainnet launched have been bumpy, to say the least. While many argue that this is to be expected with the launch of a major, decentralized network, there are more than just technical problems that have been plaguing the EOS universe. Lack of functional governance, the inability to hold bad actors accountable, the lopsided nature of EOS token distribution, arguably amounts of corruption, account freezing without oversight, and hugely inflated RAM prices are all undermining trust in the mainnet’s ability to become the “Ethereum Killer” that was prophesied.
Issues with EOS:
Whales:It is no secret thatthe top 10 holders of EOS own near half of all tokens.These “whales” wouldn’t be a problem if holding tokens didn’t come with a certain amount of political influence (1 token = 1 vote.). While vote buying is illegal (according to the current EOS constitution), some of the top BPs are “in power” (and receive block rewards to fund their operations), solely due to the massive voting power of the whales that support them.
Further exacerbating the issue, a number of block producers have recently appeared out of nowhere, who are blatantly out of compliance (the rules every BP agrees to adhere to) and are almost exclusively propped up by the voting power of a few whales.
As there is currently no oversight, or functional mechanisms by which these bad actors can be held to account, the community is powerless to stop this from happening.
Given the situation — what then is to stop these whales from colluding, hiring a team, firing up the necessary block production infrastructure, and using all their votes to then elect the majority (if not the entirety) of the top 21 EOS block producers? The financial incentive certainly exists, and we may already be seeing the beginnings of this.
Telos:A coalition of EOS block producers and EOS activists have begun fighting back against this oligopoly, by launching a new chain based on the EOSIO codebase (a “fork”), which (amongst many other improvements) has made the necessary changes to eliminate whales from being grandfathered into the new chain. This is “Telos” — which means “the ultimate purpose of a thing”.
“TLOS tokens will be distributed 1:1 with EOS tokens, capped at 40,000 per address”
No Whales:Telos caps the number of tokens in the genesis snapshot at 40,000/account. This approach has several advantages:
- It eliminates whale syndicates from exercising political power.
- It redistributes that power to the community.
- It significantly reduces the token supply, creating more scarcity and potentially higher valuation.
Everyone who has less than 40 thousand EOS should rejoice. Everyone who has more than 40 thousand EOS should be happy to now have an additional 40 thousand TLOS.
Estimating Telos Supply:According tothe Telos white paper, the Telos token supply will be between one fifth and one third that of EOS, which would put it somewhere in the range of 330 million. From Etherscan,we can see the top 500 Ethereum addresses that held ERC-20 EOS tokens, which collectively hold about 830 million EOS, with address 500 still containing 930 thousand tokens. All of these holders would be capped at 40 thousand Telos, which means that 830 million votes turn into 20 million; a 98% reduction is political power for the top 500.
Voting:Another benefit of Telos, is its inverse weighting of votes.Lessweight will be allocated to the votes of token holders who don’t use all 30 votes (token holders can stake their tokens to vote for up to 30 BPs at a time), but rather just vote for one or two BPs, which will lead to a more even distribution of total votes, and a lower barrier of entry for new producer candidates.
Block Producers:As with EOS, with Telos, there are 21 block producers all earning an equal amount of block rewards, with an additional 30 standby producers earning 50% of that. Unlike EOS, Telos standby block producers will actually need to produce blocks on a regular basis, and not just when any one of the top 21 are unresponsive. This way, Telos ensures that all block producers are ready to produce at any moment and there are no standby block producers with insufficient infrastructure. This reduces the risk of a network outage in the case six or more block producers become inactive.
“Telos enforces minimum requirements for all block producers.”
To further ensure BP accountability, block producers that do not fulfill their responsibilities will be penalized, which will incentivize them to keep up their infrastructure, which in turn will keep the Telos chain running as smoothly as possible.
Developers:From a developer perspective, Telos is not a threat, in fact, it is looking more promising than EOS itself. With lower RAM costs, and allowing for the inclusion of proprietary code, Telos and EOS can co-exist as two largely compatible platforms which may require only minimal changes for interoperability. In fact, the Telos fact-sheet makes exactly this promise:
“Telos is based on EOSIO code and will be compatible with EOS for DApp developers.”
“Telos has a developer focus. RAM will remain affordable. DApps will not be forced to be open source.”
Conclusion:As with the arrival of any newcomer, there are concerns that Telos could fragment the EOS community. EOS itself is so young that anything can still happen, hence it’s likely too early to give credence to any such argument. Due to the discontent that can arise resulting from the shortcomings of any incumbent — it is possible that projects such as Telos — that further the original vision of EOS — could even become the majority chain.
Whether you are a token holder, developer, block producer, or simply an EOS enthusiast, we encourage you to follow Telos along its ascendency. Remain skeptical, but comfortable in the knowledge that by supporting Telos — you have nothing to lose, and a lot to gain.
Telos Press Release:http://www.telosfoundation.io/TelosAnnouncement.pdf