EOS Power-Up Model Breakdown
As the entire blockchain ecosphere begins to ramp up activity on its various networks, it’s becoming more and more apparent that congestion, is becoming a real problem, as new users come into the blockchain ecosphere, and resource allocation possibly has never been more of a prime issue, then now. In this article I intend to go over the EOS main-net up and coming new resource model, how it will work, and how it will address many of the problems both current, and future within the EOS main-net ecosphere. OK now let’s get started.
How a public blockchain distributes and manages resources along a blockchain is significantly crucial. In the current blockchain proof of work generation one transaction model, block miners charge fees, and the network operates in a market where the price rises as more people try to make transactions. This especially becomes noticeable when, proof of work blockchains moved to new all-time highs, and fees become increasingly an impediment to transaction activity on a blockchain network.
However, generation 3 blockchains like EOS do it differently, three resources are important in the EOS Public Blockchain: CPU bandwidth (CPU is the time it takes to process a transaction), network bandwidth per byte (NET measures the size of the transaction in bytes), and the method of storing data on the chain, Ram (which is measured in bytes).
For example: when a user locks his tokens, he reserves a percentage of the total resources available, and the amount of CPU and NET he receives is proportional to the number of tokens he has locked. Currently, we talk about digital ownership, that percentage shares in EOS are comparable to percentage shares of real-estate on the chain.
If a user locks his token, the resource remains unused, even if others want to access it. This is time consuming and not a good experience if the user is just trying to make a transfer or something similar. The icon is locked within a certain time, and resources are not used.
Obtaining additional EOS resources through the resource exchange allocation system, AKA Rex. Can be cumbersome at times, and new users may not know, or initially understand the Rex Exchange. Many transactions are REX-dependent, which brings us back to the liquidity problems mentioned above. I have read that, A better solution, could be a combination of some proof of work elements, in addition to elements from the current resource exchange, combined with elements from proof of stake.
In autumn 2020 Block-One, together with some of the EOS-IO developer community, evaluated the newly proposed model for the distribution of CPU and NET resources on the EOS Public Blockchain. And they called it the “Eos Power-Up” model. They believe that it offers the public blockchain of EOS main-net more freedom and efficiency than the current resource model, and a more efficient resource allocation system, and I tend to agree with them.
This will most certainly, in my opinion, change things for the better within the EOS main-net ecosphere. This should have a significant impact on near spam transactions on the network, as well as increase APR rates in a positive direction for dividend seeking users.
Imagine if the average EOS holder was hypothetically, a proof-of-work, block miner, that generated fees from the entire EOS main-net blockchain. Transacting accounts would need to pay a small fee to Power up their accounts every 24 hours with CPU and NET bandwidth that can be used to meet transaction requirements. Unused tokens are deposited by token allocated users, to receive fees, generated by transaction activity along the chain.
This new model will give an EOS token allocated user the ability to earn transaction fees, paid out based on transaction activity on the network, the more the activity, the higher fees, which also means the higher the APR rate token allocated users will receive. And depending on the total amount of tokens deposited, the fees you pay to replenish your account will be offset by the fees you earn by allocating your tokens to the network.
In my opinion, basically, what is happening here is a combination of a (proof of work), and (proof of stake) token model. Which should in theory give us the strength of both without the disadvantages, after all think about it for a second, if you happen to be a token allocated user, any amount of transactions that would be paid for your personal usage of the network, will be paid using your earned tokens, and since most EOS main-net users do not interact with the blockchain on a daily basis, the amount of earned fees that a user will potentially accumulate will be higher than his or her personal usage, which will also likely bring in the additional beneficial user behavioral changes, of self-moderation for individual users, since transactions will be seen as more valuable considering the slight cost.
For me, it is hard to see this in any other way, but immensely beneficial for the future of the EOS main-net, and I for one am looking forward to the likely higher APR rates that EOS main-net users will be able to gain from such an innovation. And I can only imagine what the perception of higher APR rates would do for attracting more future crypto users to hold and invest in EOS main-net tokens. I would wager that, token price will likely take a significant flight upward as a direct result of this potentially, either way only time will tell.
To all EOS holders, it’s time to fly.
It’s good to see EOS chain finally making some progress, it’s been held back for way too long.
P.S. check out this cool app that’s built on EOS, it’s essentially a decentralized reddit alternative: https://ushertechs.com/discussions-for-ios
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