REX Needs a Referendum: Why That’s Good For EOS
UPDATE 10/19/18
A member of the Block.One development team has remarked that channeling “network funds” i.e. tokens from eosio.ramfee and eosio.names is something that can be toggled on and off. This means that the community has the ability to implement REX without this feature and therefore without referendum. The network funds referendum can take place at a later date should the community wish to implement REX more quickly.
It has been suggested that the EOS public blockchain must solve some key issues to grow, notably: .
- The upfront capital costs of EOS development are too high (i.e. developers shoulder initial cost).
- The incentive to vote, which is necessary for the security of the network, is too low.
An elegant solution was proposed by Dan Larimer, The EOS Resource Exchange (REX), which aims to accomplish the following:
- Creates a marketplace (i.e. Resource Exchange) where the resources represented by EOS tokens can be rented for a fraction of the token purchase price.
- Returns rental fees, as well as network fees (i.e. eosio.ramfee and eosio.names), back to the token-holder who originally rented out the tokens.
- Shields accounts who require the use of the network resources from token price volatility.
- Raises network security by using requiring accounts to vote for at least 21 Block Producers or delegating to a proxy in order to participate in the Resource Exchange marketplace.
Basically…
Still have questions about how this works? EOS Cafe Block wrote an article explaining it.
The implementation of the Resource Exchange (REX) proposal seems like a slam dunk. As an active member of this community, EOS New York has not spoken with a single token-holder that is of the opinion that REX is a bad idea. But, while there is likely overwhelming support for the implementation of REX, we need to consider the precedent set should we implement it without token-holder referendum (pending successful testing of the feature through code reviews and audits).
Whether or not REX should require a referendum boils down to a very specific detail of the proposal. REX, as it is currently being built, channels tokens from eosio.ramfee and eosio.names into the Resource Exchange. This is a design feature as described by EOS Cafe:
There will however always be MORE EOS in REX than what was lent to it. This is simply because fees slowly trickle in block by block [from eosio.ramfee and eosio.names]. If you held [REX tokens] for one block that included a eosio.ramfee transaction, you are entitled to a portion of that fee. Token holders who lend to REX for any significant amount of time will ALWAYS receive some reward. — source
You might be asking…
“Up to this point, Block Producers have updated nodeos and the system contracts over 30 times, so why talk about referendum for such an awesome proposal?”
The reason is that we believe Block Producers should be prohibited from unilaterally moving “network funds”, i.e. tokens that belong to no one and everyone. This is not to mention that this is prohibited by the Constitution (Article III: Rights) and we feel it ought to be upheld so that Block Producer authority can be kept in check by the community.
“Every bad precedent originated as a justifiable measure.” — Gaius Sallustius Crispus
Beyond Article III, The current constitution does not clearly delineate between what actions are under the purview of Block Producers and what actions require referendum of the EOS token-holders. Even regproducer, the governing document of Block Producers, does not provide a framework for how EOS software updates can or should occur (despite it having already happened over 30 times).
This discussion of REX and referendum begs the question, “What exactly should Block Producers be able to do with regard to changes to the network?”
As it pertains to updating nodeos & eosio.system, EOS New York proposes the following framework to be included in the regproducer agreement and/or the Constitution:
Elected Block Producers are elected to maintain the blockchain, as well as any and all modifications to existing features, all upgrades, and all optimizations. Any features considered new in the future are to be implemented at the sole discretion of 15/21 Block Producers.
Altering the hash of any governing documents (the Constitution, regproducer Ricardian, and voteproducer Ricardian) as well as any action that may alter the current intended state of any tokens considered “network funds” is strictly prohibited without token-holder consent signaled by referendum.
“Network Funds” are: eosio.bpay, eosio.names, eosio.ramfee, eosio.ram, eosio.saving, eosio.stake, eosio.token, eosio.vpay
Token-holder consent is defined as a referendum ballot for the proposed action regarding any “Network Fund” account which receives affirmatives by 15% of tokens and no fewer than 10% more affirmative votes than negative votes, sustained for 30 continuous days within a 120 day period.
By requiring a REX referendum we accomplish the following:
- Draws a boundary around Block Producer authority and establishes the precedent that Block Producers may not affect tokens that belong to the network, without explicit token-holder permission
- Tests the referendum system with a proposal that is extremely likely to pass
- Engages those who have yet to participate in EOS voting and offers a direct token incentive (REX) to participate in a successful referendum.
Given the valuable milestones we will achieve as a community, we are proposing the following next steps:
- EOS New York will work with others to craft the ballot for REX referendum.
- We will work to ensure that language describing Block Producer vs. Token-Holder purview is included in either a proposed constitution or a proposed adjustment to the regproducer agreement.
When the referendum system is completed the time for discussion will make way for the time for decision-making. With those decisions will come precedent, and we must ensure that we are not only making the best decision for “now” but for the future as well.
The REX proposal will be an opportunity for the EOS community to flex its ability to make collective decisions and to signal to everyone that our system of governance, although young, is moving in the right direction. You, the token-holder, should spread the word, talk about the importance of referendum voting, and help make EOS a better network for yourselves and each other.
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