Community Governance in Action! EOS Burns Tokens Worth $132 Million, Reducing Annual Inflation Rate to 1%

The mainstream public chain EOS has been making headlines recently. First, Coinbase reported that the network performance issues may affect the deposit and withdrawal functions of EOS. Additionally, the community has passed a proposal to burn 34 million tokens, further reducing its currency inflation rate.

• 3,400 EOS Tokens Burned
• Annual Token Inflation Reduced to 1%

Second Major Token Burn Within a Year

After a unanimous community vote, EOS experienced another token burn worth up to $132 million, reducing its annual inflation rate from 5% to 1% annually. EOS had a similar burn of around 3,400 EOS tokens in the first quarter of 2019.

EOS had an initial supply of 1 billion tokens, with an annual 5% token inflation, out of which 1% was for node rewards, and the remaining 4% was stored in the EOS account named eosio.saving. After the proposal is passed, the tokens that were supposed to be inflated will no longer be stored in that account and will be directly distributed to the nodes.

Co-founder of Block.One, Brendan Blumer, expressed his surprise on Twitter regarding the proposal being passed:

Wow! I woke up today to find that overnight the community passed a proposal to reduce the EOS inflation rate from 5% to 1%, showcasing how the EOS system maximizes value for its holders and highlighting the power of decentralized governance.

Wow! I woke up today to find that a proposal to reduce #EOS network inflation from 5% to 1% had been proposed and passed by the community overnight. This speaks to the power of decentralized governance, and networks designed to operate in the best interest of their holders.

— Brendan Blumer (@BrendanBlumer) February 25, 2020

Network Performance Questioned

On February 22, Coinbase announced that due to a sudden drop in EOS network performance, deposit and withdrawal speeds may be affected and stated that they were actively investigating the issue at that time.

Brendan Blumer took to Twitter to explain through a series of tweets that the performance issue Coinbase faced was not due to EOS being slow, but quite the opposite:

EOSIO is highly scalable to the point where many applications struggle to scale their infrastructure to keep up with the transaction processing speed of EOS.

EOSIO is so scalable at the blockchain level that many applications have a hard time scaling the rest of their infrastructure to keep up. #EOS

— Brendan Blumer (@BrendanBlumer) February 25, 2020

According to Coinbase's latest network status page, the issue has been resolved.

Development of On-Chain Resource "DISK"

Although the performance issue faced by Coinbase may have been a misunderstanding, their network resource (CPU) did face overload issues. Therefore, Block.One's CTO, Daniel Larimer, confirmed that they are working on the latest solution for network resources:

EOS.io will soon launch DISK as one of the storage solutions for smart contracts, where data storage will no longer be limited to RAM. The DISK feature will be very useful for data applications with large data volume and low query volume.

#eosio will soon have a disk backed key/value store as an option for contracts that can trade cpu time for storage capacity. Based on rocks db blockchain state can now scale far beyond limits of ram. This is especially useful for large datasets that are infrequently accessed.

— Daniel Larimer (@bytemaster7) February 25, 2020

Despite the significant positive news of token burns and a sudden decrease in inflation rate, the performance of EOS tokens has not improved recently. After dropping below $4 yesterday, the current price is at $3.54, and its market ranking has dropped to 8th place.

Related Reading

• EOS Ecosystem's Future Questioned, Is Voice Worth the Six-Month Development?
• Surpassing EOS, Tezos (XTZ) Officially Becomes the Largest Staking Project by Market Value

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