Eidos and chaos at the core of the EOS being
A brilliant idea can originate from great chaos. Chaos is how we can describe the state of the EOS community. Network congestion, users frustration, the silence from Block.one, apparent lack of direction is what is observable from the standpoint of a community member. But as disordered and confused this everything seems we must know that everything has its meaning and leads to unpredictable results even if set into such a deterministic machine which is EOS.
“Chaos theory states that, within the apparent randomness of chaotic complex systems, there are underlying patterns, constant feedback loops, repetition, self-similarity, fractals, and self-organization.”
Why EOS went into a congestion mode
It all started on November 1, 2019, 8 am GMT. EIDOS is an airdrop that pushed EOS into a congestion mode. People send a small amount of EOS to the eidosonecoin account to receive instantly the same amount of EOS back and an additional 0.01% of all the EIDOS tokens. The contract is set to mint 25 new EIDOS tokens every second. 5 EIDOS are sent to the team account, 20 EIDOS are held for the airdrop. This will go on for about 15 months. By then 1 billion EIDOS will exist and 800M of it will be given to the community for free.
This mechanism is considered ‘mining’. People needed to rent resources from REX to mine EIDOS. Consequently, the CPU became a scarce resource because there are millions of transactions going through. REX noted a significant increase in returns going from 10 to 83% in just 3 days but at one point it reached the level of saturation. This should have never happened with the Bancor algorithm built-in however there’s a line in the REX code that prohibits the price of REX to go into infinity or at least to the level where 1 EOS gives 1 CPU. The result is that the network activity declined and a state close to the system paralysis occurred.
EOS resources allocation
To understand what’s happening we need to get some background about the mechanism the EOS resources were allocated until November. The users were allowed to use the resources they paid for when buying EOS. Considering that the network was under-utilized, these users were able to use not only their own resources but also the resources of other users. The leeway was very high and people were essentially given more CPU than they paid for. It’s already for a while that EOSIO supports the turning off the free CPU but the top 21 BPs didn’t enable it yet. Block.one released this feature a few weeks back. This tweak in the code would put the network into a mode that is the same as constant congestion. This, in turn, could be addressed by dapps switching to the state where they pay for the users' resources so no one would care about CPU, NET, and RAM anymore. Up until today, only very few apps announced covering resources for their users. Karma and Prospectors are between the first while bloks.io offers 5 free daily transactions to each account. In this situation where the top 21 BPs ignore the situation, EIDOS seems to come like the manna from heaven.
EIDOS - manna from heaven or spam attack
It could seem that the EIDOS airdrop is rewarding spamming of the network with 0.0001 EOS transactions and is just using up CPU at high rates. Someone could say that it’s the spam attack on the network by the community itself, but it turns out that the benefits of this could lead to better functioning of the entire network and higher resilience. The same Aiden Pearce who is behind the EIDOS token wrote: "Tokenize your free EOS CPU and NET instead of letting it go to waste” which makes one think that there’s much more behind it rather than a simple spam attack. The whole concept of the airdrop is quite brilliant and it was also instantly appreciated by exchanges like Newdex, Bithumb and by many wallets who instantly listed the token and enabled mining. The airdrop got a huge marketing and community support and while its price dropped significantly, those behind the concept said: “we will continue building and adding utility and adding value to the EIDOS token in the coming years on various projects” which would indicate that much more will be revealed in the future.
At the current stage, however, the leeway went away now and it became impossible for a user with 10 EOS to perform many transactions. Users need resources from REX or need apps to pay for them. What we will have from now on is apps paying for the users and users paying for their own resources when moving the tokens outside of apps like staking, sending tokens. With time, the responsibility of the resources will be all on the service providers just like it is today with the websites paying for the hosting and users paying for nothing but for now, REX went into a liquidity crunch. Most users are withdrawing their EOS by selling REX before loan periods are over. The sell orders are being put in a queue while new loans are disabled till the queue is emptied. There’s a delay of 25 days to be able to liquidate REX loans now.
While the CPU costs are getting out of hand for the few apps that are paying for user resources, it is only until the point when more apps will start doing it en masse that this paralysis will end. But this damage caused by the EIDOS airdrop is only apparent because, after all, EIDOS is supported by all the community members who send the transactions and mine the token. It also raised REX rewards for all those users who had EOS tokens in it. REX price never goes down and it is like a saving account where interest is accumulating so the whole apparent chaos caused by this airdrop is addressing many things at once while making of REX the biggest DeFi project ever and raising the collective intelligence of the whole community.
When I say that the EIDOS airdrop model is brilliant it’s also because it allows for every single user to mine EIDOS with her own resources. It is a form of UBI which was initially behind the original idea of the project.
On the official Twitter account of Enumivo which launched the EIDOS airdrop we read:
“Look at most IEO/ICO projects, they are not optimally incentivized to deliver since they get the money upfront. It leaves so many investors losing. EIDOS will only succeed if we make the holders succeed. Other projects are not like that. They'll even ban you if you complain.” The token contract is open source and anyone can create an airdrop on EOS or other sister chains instead of doing ICO or IEO.
“Joining EIDOS fairdrop with your staked EOS is free money at any nonzero EIDOS price. Renting CPU to get it is another story. What we give for free is now sold as a futures contract by CPU lenders. We still give it free but you speculate on its future value and you pay rent.”
“EOS was never a “free to transact” chain. There’s time value of money. You lock your assets, that time value is what pays for your transactions.”
“EIDOS is good for EOS long term. The perception that it hurts EOS is only short term.Everyone competes for finite resources of the EOS network. It’s totally fair and market driven. We are all looking for equilibrium. And it’s an endless chase. Nothing’s 100% free.”
Enumivo.org has also a plan of building EIDOS CODEX, a community owned decentralised exchange where users will be able to buy shares in the market maker what will make of them an exchange operator without the hassle of operating a traditional exchange.
Right now though, the community needs to wait around 25 days because that's when a large amount of the loans mature (52 million) and the liquidity can be returned to the market. Quitting REX paralysis is also possible by adding more EOS to the REX. At the moment, there are proposals to use the eosio.saving account as the input for REX to leave the 20% threshold that froze it. This is a quick fix that could do the trick, the other option is to wait for leases to end while letting frustrated and smaller apps leave EOS and increase adoption of other EOS.IO chains. Telos seems like the most likely choice for many.
The proposals are flowing in and the community is thinking. When the chaos will end, EOS will be again the cheapest and fastest contract platform with big market liquidity and a huge userbase - things that most businesses look out for.
The enframing of EOS
EOS is just 1.5 years old and the road to becoming at the top of its capabilities is long. While the community is thinking and striving to put the world "into boxes," to enclose all of the events within categories of understanding like mathematical equations, laws, sets of classifications that can be controlled, EOS is evolving at the same time. Through each individual’s logic used in thinking and acting, and the basic ideas by which the members of the EOS community organize and interpret experience we are collectively creating the logical structure of EOS.
Anthropologist S.F. Nadel once said, “The eidos is visible wherever group behavior is characterized by intellectual efforts of a similar kind.”
And we see it.