New Resource Model (NRM) Proposal - Bitfinex Feedback

1 October 2020

Background to the NRM proposal

In spite of the fact that EOS is currently the blockchain with the most daily transactions processed each day, most EOS network resources are still going unused. 30% of resources are fully leased from the EOS Resource Exchange (REX), while only a fraction of the other 70% which are not offered in REX are actually being actively used to process transactions on EOS.

Summary of the NRM proposal

The NRM proposal outlines a transition from the current EOS resource entitlement model where each token represents a permanent claim to a specific percentage of network resources towards a leasing model where access to network resources is purchased on a temporary basis. It aims to remove the influence of speculation over resource pricing by introducing a rental market with pricing based on overall resource utilisation and thus make resource allocation more predictable and reliable for all community participants.

EOS users will pay to lease resources for 30 days, and then must renew this when the period ends. It will still be possible to stake EOS, but the return will not be CPU/NET, it will be a share of fees generated by name auctions, RAM fees, and proceeds from CPU/NET rentals. 

More details on the NRM can be found in Dan’s original post on the topic and the official Block.one proposal

Bitfinex Feedback

Summary

We’d like to give credit to the community engagement team at Block.one for their efforts to engage with EOS block producers and the EOS community on the new proposal. This new level of direct communication and collaboration with the community is, in our opinion, a key step in further developing the potential of EOS and lifting the ecosystem to new heights. 

We support the new resource allocation model and are committed to working with other block producers, Block.one and the wider community to see it implemented in the shortest time frame possible. 

Our Thoughts & Feedback

The model should achieve its primary aim and lead to a more reliable and predictable way to access the resources needed to process transactions or operate a dapp on the network. The new model makes the network more accessible and equitable by potentially reducing the upfront costs associated with network resources, and it should dramatically reduce CPU costs and give a boost to all EOS dapps which will be able to invest this newly freed up capital elsewhere. 

Adding yield generation directly in the EOS protocol layer will likely drive new market interest in EOS. This new passive income also appropriately compensates token holders who may have originally participated in the ICO for the aim of securing a permanent claim on the “network real estate” associated with their token holdings.

The NRM should greatly increase network utilisation versus the current model, but in our opinion in its current state it leaves potential for under-utilisation and potentially even incentivises undesirable behaviour. 

As other members of the network have already suggested, we believe the current plan for a single one-size-fits-all 30 day subscription plan does not sufficiently meet the needs of “light” users (i.e. those that may not interact with the network on a daily basis or enough to justify a recurring monthly subscription) and it could be improved upon by either:

  1. Adding shorter plans, e.g. 1 or 7 days

  2. Supporting per-transaction payments similar to Ethereum

  3. Adding support for transaction sponsoring such that 3rd party wallets or other service providers can cover costs

Option C rings most true with our vision for EOS and the vision the Dan Larimer has previously outlined where network resource costs are shouldered by EOS dapps and the complexity involved with managing this requirement is abstracted away from the typical experience of “light” users. 

The costs incurred by dapps to cover these network resources for users can be offset by the costs savings they themselves gain through the new model. However, the community should go a step further and support dapps through funding mechanisms, e.g. the EOS WPS. 

The rollout of the new resource allocation model should be accompanied by a community-wide effort to push all dapps to cover enough network resources for a base level of network interactions and thereby deliver a more frictionless user experience. 

Similarly, increases in network utilisation should lead to increases in the size of the blockchain and increase demands on history solutions and funding mechanisms such as the WPS should be deployed along with the new resource model to support the operations of history solutions.