The following is a request for comments (RFC) from the Telos community regarding a proposed approach towards advancing the economic development of Telos.
We call on the Telos community to discuss and then vote on a proposal to divert funds from the largely unused Exchange Token Reserve Fund to the ongoing economic development of Telos. This would allow for several improvements such as:
- Better funding for the Telos Foundation’s mission of promoting the network
- More funding for worker proposals
- Consistent block producer pay to ensure network stability
To offset any increase in sell-pressure and support the token price, funds would be used for:
- Advertising, marketing, promotion
- Additional exchange listings
- Professional market-making services to add liquidity and price support
- Funding REX to provide a generous ROI to Telos REX stakers
- 0% annual inflation on Telos for as long as these funds last
Such a proposal is expected to increase the value of Telos for anyone who has already claimed their Telos accounts, at the expense of an account that is largely sitting dormant due to lack of exchange interest. The expected TLOS price increase is likely to increase the interest of exchanges in claiming their customers’ Telos accounts, ultimately allowing more of those users to receive their tokens. This vote would further highlight the unique iterative governance of Telos as the only blockchain where all token holder can collectively determine incremental changes in governance.
The Telos mainnet launched and activated five months ago in what was 2018’s largest mainnet launch of any grassroots blockchain project. The ability to launch Telos without raising money through any form of ICO or token sale helped ensure an equitable distribution, which is so crucial to meaningful DPOS governance. However, it came at the cost of denying the network with an easy treasury of funds for future development.
In the past five months there have been many positive developments for Telos: the Telos Foundation board has judiciously used their limited funds to secure exchange listings, our worker proposal system is funding exciting and important projects, and wallets, services, users and dapps have started coming to the network. However, the lack of a significant treasury has limited several growth opportunities. With better funding, Telos could be on more exchanges and contract for the professional market-making services that so many projects like ours use to improve trading liquidity. We could also advertise, better promote and market the chain, take part in more conferences and initiate partnerships for the betterment of the entire Telos community. Although we reserved a sizeable number of tokens for the EOS genesis holders whose tokens were on exchanges at the time of the genesis snapshot, very few of these exchanges have engaged with us to claim those tokens. Similarly, many genesis accounts remain unclaimed and subject to future deletion. As a result, Telos economic development is underfunded while the network sits on a very large untapped source of revenue.
The Exchange Token Reserve Fund was established as a store of tokens for those EOS holders who held their EOS on exchanges at the time of the EOS genesis snapshot. Telos has a process for exchanges to claim these funds for their customers but it is sparsely used. Customers cannot claim these funds directly. Telos also has genesis accounts that were created for EOS genesis holders who did control their accounts as of the genesis snapshot. These accounts are subject to deletion if still unclaimed one year after the Telos mainnet launch. This is a separate issue.
We don’t know if the unclaimed exchange and genesis accounts are due to lack of interest or of awareness. Economic development to raise the profile and token value would address both and hopefully bring in more of these account holders.
The Proposed Action
We propose that a monthly allocation of TLOS tokens from the Exchange Token Reserve Fund (ETRF aka exrsrv.tf) be used for the purpose of economic development. These funds would be allocated to a number of purposes including worker proposals, block producer pay, network promotion by the Telos Foundation, REX funding, and other economic development purposes such as professional market-making and liquidity-providing services.
Exchanges would still be able to claim their tokens for as long as, and to the extent that funds existed in the ETRF. This would allow several months to years for exchanges to decide to claim tokens for their customers. If the block producers should decide to apply tokens from unclaimed accounts to this fund, this period could be extended even further. The regular depletion of funds would create a timeline for exchanges to claim tokens which may increase the rate of exchange claims.
The Telos block producers, as elected by the token holders would administer the distribution of these funds, including the possibility of returning over-allocated funds to the ETRF as the TLOS price increases and need for economic development eases. This would allow the fine-tuning of these funds as economic conditions change, without the need for constant elections, yet still remaining under token-holder control through their delegated block producers.
During the period that these tokens are used to fund economic development, these funds would be used in lieu of inflation and Telos inflation would become 0%. When these funds were depleted or fully claimed, WPS and BP inflation would become a fixed amount meaning that the rate of Telos inflation would gradually decrease in percentage terms.
Well managed, this proposal could grow Telos so that token prices increase, more dapps and features are funded and deployed, token holders could earn among the highest annual ROIs from staking rewards of blockchain projects, and Telos would become a 0% inflation blockchain, possibly for a decade or more.
We seek feedback on this proposal from the Telos community. In order to pass, an amendment based on this proposal and community feedback would be submitted as a Telos ratify/amend proposal, which would be voted on by the token holders using the Telos voting system. In order to pass, the proposed amendment would need to have received 55% Yes votes from among at least 15% of the votable Telos tokens as described in Clause 38 of the Telos Blockchain Network Operating Agreement.
Voting would be immediately available on an updated version of Sqrl wallet. The Telos Core Developers have undertaken the development of a Ratify/Amend voting portal where token holders could also vote using Scatter or other wallets. The date for deploying such a voting portal is pending.
If approved, the Telos elected block producers may revise the allocation of these funds by a 2/3+1 vote (15 of 21). The proposed initial allocation is as follows:
The duration of this draw-down would depend on various factors:
- ETRF (35% exchange claim): ~13 months
- ETRF (no exchange claim): ~20 months
- ETRF + unclaimed accounts (50% exchange claim): ~30 months
- ETRF + unclaimed accounts (no exchange claim): ~39 months
- ETRF + unclaimed accounts (50% exchange claim) allocation reduced to track rising token price : up to 120 months
- May 15 Target date to publish RFC infographic/document
- May 24 Target date for updated version of Sqrl with Ratify/Amend voting pushed
- May 27 Target date to propose amendment / Begin voting ballot
- tbd: Activate Ratify/Amend voting portal (if possible — not certain)
- June 25 Voting ballot would close
This RFC is co-sponsored by a consortium of Telos block producers including: GoodBlock, CalEOS, Telos Miami, Infinitybloc, Dutch EOS, TelosDAC, Telos Global, eosBarcelona, TelosGreen, Blindblocart, Telos Unlimited, Telos Vancouver, Telos 21 Zephyr, EOS Vibes, EOS Dublin, Telos Germany, Telos Canton, Telos ZA, Telos USA
More info about the Telos Foundation can be found at: https://telosfoundation.io/
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