Issue #1
As the communities of EOS, as well as GOLD.IO, are well aware, block producers (BP) and related governance are in the basis of an efficiently working user-focused decentralized system. While we have published draft versions of the documents related to BP incentives and governance structure, our community has shown significant interest in an introductory comparison between EOS and GOLD.IO in these terms. These papers can be found on https://gold.io/, under section “Documents”. As noted, GOLD.IO employs three documents which are designed to be substitutes to those of EOS with the intent to fit more neatly GOLD.IO and in this way contribute to the development of the EOS ecosystem as a whole. In this issue, we will focus on the differences in rewards for block producers.
EOS BP Reward System (Summary)
The BP reward is calculated from the annual inflation of the EOS token supply. That is, every year the total supply of tokens increases by 5%, and out of this 20% is provided as a reward for block producers’ activity. From these 20 %, a quarter is distributed for block production while the rest is allocated to the top 100 block producers with a cut-off value of 100 EOS per day in accordance with the votes they received. As of the time of this writing, the top 80 (21 active and 59 standby) block producers are rewarded for their activity — top 21 for block production and votes and the rest 59 for votes only. Block production takes place in a rotatory manner — i.e. every block producer produces for 6 seconds (12 blocks) before switching to another one.
GOLD.IO BP Reward System
Before proceeding, we would like to remind the reader that the figures mentioned below are not definitive, but rather indicative and are subject to change before mainnet launch. In GOLD.IO the token inflation is expected to be set at 3.618% per annum out of which 44.721% (or 1.618 percentage points) will be dedicated towards rewards for block producers.
Active Block Producers
Instead of having a constant split of 25% for block production and 75% for voting, the reward for block production will change over time in favor of that for voting which will be increasing proportionally for active block producers who have been active for more than 3 months. The rate of transfer (between the two types of rewards) is 0.05 percentage points for every week after the third month of being active block producer, indefinitely. The starting values for active BPs are 21% and 79% for block production and from voting, respectively. If the block producer falls out from the list of active BPs for more than 1 week, this rate begins to revert to its initial values at 0.33 percentage points per week. Once the initial values are reached, the reward for block production begins to increase at a rate of 0.05 percentage points at the expense of that for being a standby block producer until reaching 33% to 67% split of the rewards for block production and from voting, respectively.
Standby Block Producers
The starting values for standby BPs are 33% and 67% respectively as rewards for block production and from voting. The same mechanism as for active BPs applies here in reversed order.
Unlike fixing the number of active BPs we apply a fixed percentage of total BPs which will be defined as active and standby. As their total count grows both the active and standby will grow, rather than having constantly 21 active and at the moment 431 standby (the current EOS state). Up to the total count of 144 block producers, 21% (30 BPs) will be considered active and the rest 114 are standby.
While here we wanted to shed light on the block producer rewards specifically, subsequent issues will aim to clarify the initial number of block producers, their growth path, inflation, election and voting processes.
