EOS Worker Proposal System (WPS) being considered again
At the last EOS governance call that took place on 9th October, block producers talked about the Worker Proposal System (WPS) and resources management. The EOS WPS is an ongoing topic that started even before the mainnet launch. Resources management issue stemmed from a network’s congestion mode created by a user who used a few tokens borrowed from REX to effectively impede some of the network’s functionality. While no decision was taken it is important to talk about the possible options.
EOS has a 4% annual inflation that gets accumulated in the eosio.saving account. There was an intention to use this inflation for the WPS which would fund new projects. The lack of a good system capable of resistance to corruption prompted the token holders to vote against it.
On 8th May 2019, 34,171,037.4625 EOS tokens were sent from the eosio.savings to the eosio account (see transaction) and they were burned. The inflation wasn’t lowered though and it continued flowing resulting in 19,825,909.3010 EOS ($57680470.96) accumulated as of 19th October 2019. The community is wondering if it has sense to burn these tokens again considering that the last time the burning had minimal if any, influence on the token price. There’s still no solution to the WPS being resistant to corruption however there’re some interesting solutions that could be adopted.
The major roadblock to the WPS is the community reluctant to unlock such a big sum of money for the fear of it being used for personal interests rather than for the benefit of the EOS network. The alleged cartelization of the chain is the major factor in little trust in the WPS being used efficiently.
Another factor against the WPS is the fear of the token price plunge if the tokens had to be sold by those winning the funding. While this is a legitimate worry, some steps like project funding in stages could be used to mitigate the sudden falling price. It is presumed that the benefit resulting from the initial investment would be long term gain for the whole network.
Some few months back, Greymass BP expressed an opinion that the inflation flowing entirely to BPs is harmful to the network because it drives to the centralization. This trend could be offset with another part of inflation going somewhere else, most likely to the WPS. This is true only if the funded projects don’t belong to the same BPs who receive the most inflation now. If not, they could use the system to cement their top position even more. On the other hand, giving away EOS to teams to build their projects and seeing no return isn't a good idea either. Some checks and balances need to be applied.
While the community sees the benefit of having a WPS capable of funding useful projects, having a system where those with the biggest stakes can’t use it for their benefit is the key. In EOS everything is stake based and this seems the core of the issue.
Existing WPS' on EOS.IO
The BPs at the governance call talked about bringing in the BOS WPS. It’s been proposed to take about 10% of the total accumulated inflation and use BOS WPS to fund necessary projects which can be proposed by the community, prioritizing support of full nodes infrastructure and technical solutions for optimizing EOS blockchain. During the call, there were no proposed other solutions except already existing BOS WPS.
Telos blockchain is another example of a successful WPS. It already funded Wordproof and other projects. Telos has also the arbitration in case the block producers suspect that the worker proposal recipient failed due to fraud or negligence.
Perhaps the biggest difference between these two projects is who approves the projects. While in BOS the proposal is voted mainly by BPs, in Telos, WPS is voted by a larger community. This is because of the initial Telos token distribution that was very wide and capped at 40K EOS.
These two systems involve always stake voting. The bigger the stake, the more influence on which projects should be approved.
EOS has its own WPS ready to go and which was turned down during the referendum but not even Brendan Blumer liked this idea. This is what he said about WPS in January this year:
"Worker proposals should not be base later. Yes on UBI, but not base layer. ECAF absolutely needs to go."
"I stopped worker proposals before launch because I never wanted them base layer, anything experimental or irrelevant to some should not be part of the core protocol"
"Because the success of an autonomous new-age DAO that offers resources in a way that can be gamed by large token holders, no accountability for progress, or enforceability for fraud should not be affecting the base layer"
"These types of DAOs should be security tokens that bring communities into the investment selection committee and has a certain degree of centralized enforcement or you will most certainly give away more value than you’ll ever receive"
"I mean without centralized enforcement, the DAO will give away more value in tokens (which affect token holders when the recipient sells them for USD to pay bills) than they will receive back"
"DAOs are better structured with security tokens that pay dividends and have a centralized operation that uses the investment committee to build community and do open DD" (due diligence)
"WPS is just a system to give away to causes that large token holders want (most likely themselves). It can’t properly be implemented without security tokens that find real businesses and have rights to profits"
"Without that, it’s a charity, not a WPS"
When someone asked Brendan why using STO he answered:
"It could be a utility token sure, but what would it do and how would it gain value from the companies it funds?"
"If the WPS system was implemented in its current form the eos token price would fall as the sell pressure from inflation went up 5 times without any clear way to measure returns and drive value back to those same holders that funded the project"
Brendan Blumer believes that the WPS shouldn’t exist at the base layer. With the core protocol WPS the possibility for the resources to be gamed or wasted is too big.
EOS talkchain is perhaps the best solution I have heard of. It’s a platform with asynchronous video conversation suitable for collective decision making. The panelists open up a discussion and people vote and seamlessly rate short video posts. They essentially indicate their level of agreement on what the panelist says. This kind of voting is good only if there’s a unique identity attached to each account and this is something the platform will adopt. Until then 1 account 1 vote is good enough. With the voting that is possible only after the video ended the bots will be obsolete. To minimize the risk of multiple people voting with multiple accounts a margin error of +/- 5% could be applied.
By creating the WPS debate on EOS talkchain we could prove the concept of collective decision-making and use it further for the WPS proposals. The voting is oblivious to the stake which makes it a good candidate for a corruption-resistance system.
Once people see that this is the way to have a voting system people will use, referendums will become possible again and choosing an EOS Foundation members will be much easier.
The EOS WPS is a highly contentious topic. The EOS community has been wonderful in developing so many free tools from the start and contributed to many projects despite the lack of public funding. It will be up to the community to decide what’s right to do but I’d like to see BPs give EOS Talkchain a try.