Summary - Telos Economic Development Plan 3 (TEDP3)
TEDP3 establishes the framework to “fuel” Telos’ most impressive period of growth to date.
This is a TLDR version of the full proposal.
Overview
Telos has steadily built in all areas for over four years since the project began, expanding our technology, value and community in important ways. The Telos Foundation, Telos Board and Telos Core Developers continuously monitor the current economic state of Telos, the broader crypto industry, and the world to take advantage of our unique opportunity as a nimble, user-governed blockchain. In a joint effort, we propose revisions to our economics to thrive better under the current and expected economic conditions.
The Telos Economic Development Plans (TEDPs) aim to find consensus within the community around approaches to breaking through impediments and addressing economic opportunities to advance Telos. The TEDP3 is the latest approach to this. With it, we seek to face challenges, assess features that are not increasing success, and take advantage of a clear opportunity to improve Telos's capitalization and grow faster.
Our Challenges
Despite our proven innovation, superior technical specs significantly increased staff, and aligned and supportive community, Telos has yet to achieve a market capitalization even 1/100th that of EVM blockchains with speed, capacity and demonstrated resilience far below what Telos offers. There are a number of economic challenges that we have identified that must be addressed before we can do this.
- The top exchanges have a higher bar for L1 network listings due to the technical costs they incur from running wallet services and upgrades — many exchanges have noted their desire to see greater on-chain activity, liquidity and the overall trading volume for these technical costs to be worthwhile.
- The liquidity within the telos ecosystem is currently below where we believe it could and should be due to a lack of incentive structures which stems from a lack of token allocation for such a program. More centralized networks have foundations with incredible control over their network’s tokens and, therefore, could quickly establish such programs. For Telos to establish an adequate DeFi incentive program, it requires funds to be properly allocated via this proposal.
- The Ignite program (Grants and Ventures) has two problem areas currently. First, it does not have dedicated funding and second, the network’s liquidity significantly limits the capital deployment rate.
- The TCD needs a higher level of funding for the work it’s taking on, especially with the establishment of Antelope, which will bring great technical advancement to Telos and its applications.
- Staking on Telos in its current form is too complicated for many users and difficult to market, with differing lockup parameters for staking on Telos Native and TelosEVM.
- Telos Native has a recoverable account creation cost, making it difficult for the Telos Foundation to provide user-friendly free accounts in the way it desires.
Our Opportunity
Telos has the world’s fastest, highest capacity Ethereum Virtual Machine (EVM) and the only EVM that prevents front-running (a.k.a. MEV), which is one of the most intractable impediments to greater EVM adoption. From observing several other EVM-type projects recently, it appears that increasing TVL also increases the market capitalization of the chain itself in a powerful and relatively predictable way.
We have the opportunity to take advantage of this pattern in an attempt to bring the market value of Telos more in line with its relative utility and technological value compared with other top smart contract platform blockchains. To do so, we intend to refine Telos's economics in several ways that eliminate some costs while increasing the spending in others in a Keynesian economic model intended to foster growth in specific areas that will incentivize an increase in TVL and, as a result, TLOS market cap.
Grow Telos DeFi — By Establishing the 54M Telos Fuel Liquidity Incentive Program
Via an aggressive monthly distribution of 1.7m TLOS, the Telos Fuel Liquidity Incentive Program will stimulate DeFi and CeFi activity in the way that networks like Avalanche (With Avalanche Rush) have done in the past to great effect. You can read more about Telos Fuel here. The core premise is simple — Liquidity Fuels Growth — the impact of such a program is expected to be far beyond DeFi alone.
Expected Impacts
- Greater DeFi and CeFi Activity
- Higher TVL and Liquidity
- Higher trading volumes
- Appeasing the requirements of top-tier exchanges
- Rapid onboarding of DeFi and non-DeFi projects
- Launchpad and liquidity for all Telos projects
Read about the Exciting Telos Fuel Program and the new team being established here.
Ignite Telos Ecosystem Growth — By Establishing 12M+ Dedicated Ignite Fund
When Ignite was first launched, a small portion of the total 12m tokens was allocated to support initial capital deployment, however, a full funding plan was never put in place, with the expectation that a future solution would be designed. By Establishing 500,000 TLOS/month funding specifically for Telos Ignite (Grants and Ventures), the team will be able to deploy capital at a much higher rate than we have been able to previously and fully fund the program.
Expected Impacts
- Greater Funding to Ignite Telos Network Projects
- Taking Telos Network Effects to the next level via ecosystem expansion
Retaining our Place as the Technology Leader by empowering Telos Core Developers (TCD) with a funding increase
We wish to boost TCD funding by 100,000 TLOS per month, so they have adequate funding to help retain Telos’s place as the most advanced L1 in this industry.
Expected Impacts:
- Retain and increase the TCD’s ability to retain Telos’ technology lead
Simplified Staking with 10-day lockups on native and tEVM
By adding a 10-day lockup on Telos Native (to match telosEVM), we gain simplified communication around Telos staking and add appropriate risk/reward parameters to the activity that benefit the network greatly.
Expected Impacts:
- General price stability during moments of macroeconomic uncertainty
- Clearer, easier communication that will gain greater visibility for staking on Telos
- An added layer of security for Telos Native stakers
Improving UX on Telos Native — Via unsellable RAM change
A small but greatly impactful economic change — allows the network to give away user friendly accounts without a sybil attack concern.
Expected Impacts:
- Greatly improved Telos Native UX
Improving Optics — Via reduced Total and Max Token Supply
Token holders have indicated confusion around our current Total and Max Supply. Reducing the Total Supply to a round 355 million tokens (from the current 355,208,670.6674) , is a small change that results in a more memorable number to communicate. Reducing Max Supply from 10 billion to a more realistic 1 billion alleviates concerns of stakeholders who don’t understand how the Telos Network works as a DAO.
Expected Impacts:
- Simpler communications around Telos tokenomics
- Improved Tokenomic Sentiment
Actions of the TEDP3
If the Telos community votes to pass the TEDP3 Telos Amend proposal, it will amend the TBNOA (Telos Blockchain Network Operating Agreement) governance document and instruct the Telos block producers to enact and facilitate the following actions:
Amend Clause 49 of the TBNOA as follows:
- Telos Fuel Incentive Fund: Establish 1,700,000 TLOS/month in new funding to launch the Fuel Incentive Program and grow TVL on the EVM.
- Telos Core Developers: Increase funding by 100,000 TLOS/month to expand work capacity and dedicate resources to improving user experience, further improving and proving Telos high speed and capacity.
- Economic Development Fund: Eliminate 150,000 TLOS/month in unneeded funding.
- Ignite Grants Funds: Establish 500,000 TLOS/month in new funding to attract and support partners and fully fund the Ignite program.
Instruct the Telos block producers, Telos Foundation and Telos Core Developers to:
- Reallocate Stagnant Funds: Transfer 1,000,000 TLOS from Telos Works account (‘works. decide’) and transfer the balance of TLOS funds from the Economic Development Fund (‘econdevdfund’) to the Telos Fuel Incentive Fund account to pre-fund the rapid deployment of funds to begin the TEDP3 actions immediately.
- REX Staking: Revise the lock-up period to 10 days from the unstaking command to match the sTLOS unstaking period, and better secure the on-chain value.
- RAM Unstaking: Modify RAM selling to eliminate selling RAM below an account minimum set by the active block producers and increase the RAM given to new accounts to this level to improve the new user experience while preventing theft through Sybil attacks.
- Total Token Supply: Deflate total token supply to 355,000,000.0000 TLOS by eliminating 208,670.6674 TLOS from the ‘tlosrecovery’ account.
- Maximum Token Supply: Reduce maximum token supply from 10 billion to 1 billion to increase investor confidence.
The overall intended economic impact of the TEDP3 is better to align the deployment of capital from our reserves to support high-impact initiatives, including liquidity, incentives, grants and development funds, to unleash rapid economic growth and attract greater participation from the broader crypto economy.
What Next?
Are you excited about the opportunities TEDP3 creates for Telos? Discuss the economic plan in Telos Governance and prepare to vote on September 23!
Key Links
Telos Fuel Liquidity Incentive Program
About Telos
The Telos EVM is the most powerful and scalable Ethereum Smart Contract platform built to power Web 3.0. Telos features a robust, third-generation, ESG-compliant evolutionary blockchain governance system, including smart contracts, advanced voting features, and flexible and user-friendly fee models. In addition, Telos supports the blockchain ecosystem by serving as an incubator and accelerator for decentralized applications through development grants. Come build with us.
