Revolutionary reform of token distribution for Defibox: beneficial or harmful?
Although the current domestic EOS ecological project is very difficult, the foreign ecology is undergoing subtle changes: the newly established EOS Foundation has successfully completed the SETINFLATION proposal and can obtain continuous eos inflation rewards for foundation operations.
As the saying goes: “You have food in your hands, but don’t panic in your heart.” With continuous financial support, the EOS Foundation can let go of its hands and feet. It has successively carried out projects that have helped the EOS ecology through four batches of foundation grants. Donations will provide strong support and help to EOS ecologically beneficial projects in the future. This is undoubtedly beneficial to the long-term development of EOS ecology. After all, the ecology is rich and perfect, and the number of participating users can increase, and eos may usher in positive development.
In addition, the newly established Helios is also worthy of attention — -this is a new organization led by Brock Pierce to support the EOS community. This organization owns 45 million eos provided by Block.one (of which 8 million are mobile, and 37 million will continue to flow in the next 7 years). Although this may be Block.one’s attempt to divert its troubles, it may clear Block.one’s negative impact on the future development of EOS.
In summary, the overall environment of EOS ecological development abroad is slowly changing. The short-term effects of these changes may be minimal, but one day in the future, when the entire blockchain industry matures, the benefits of these changes Will be reflected.
Defibox will start a major reform of token distribution, beneficial or harmful?
In the last part, we talked about the current situation of EOS ecology together. The simple summary is: The domestic EOS ecology is very difficult, and the foreign EOS ecology is undergoing subtle changes.
In this section, let’s talk about the future of Defibox, the “one brother” of the domestic EOS ecosystem, and this future will start from the current ongoing reforms.
Recently, Defibox has made a lot of reforms around DAO. In order to promote the reforms, it has also intensively initiated a number of proposals:
The DIP31 proposal establishes the basic charter of DefiboxDAO, the DIP32/33/34 proposal completes the voting and election of the technical committee, advisory committee, and publicity committee, and builds the entire board of directors. The latest DIP35 proposal focuses on the new framework Changes in the distribution of tokens and protocol income distribution.
Judging from the community chat information, many community partners are very supportive of DefiboxDAO’s reforms, and have great disagreements on this “token distribution under the new framework and changes to the protocol income distribution”.
Since I have been following the Defibox project for a long time, I have a better understanding of its various changes, and I have written many articles to share my views, this time I might as well share my views on this change.
① Changes brought about by the DIP35 proposal
The theme of the DIP35 proposal is the distribution of tokens and the distribution of protocol income under the new framework, so it includes two parts: token distribution and protocol income distribution.
The new token distribution model is as follows:
As the Defibox Foundation is about to be dismissed, the existing token distribution and protocol income distribution model need to be changed simultaneously. The new plan is as follows:
92.5% Token release go to“Defibox-Treasury”，governed by DefiboxDAO, 7.5% goes to the team;
The cost of operation and development is covered by 30% of protocol income, to ensure a healthy long-term development.
The impact of the DIP35 proposal
As summarized above, the main change of the new token distribution model is to adjust the 15% of the tokens originally attributable to the foundation. I believe that most partners have no big differences on this. After all, the new distribution plan further increases various expenditures. Refined, more open and transparent, and adding 2.5% of tokens to application rewards is also beneficial to the future development of the project.
Then, the main controversy is whether it is reasonable to “allocate 30% of the protocol revenue for the basic development and maintenance expenditure of the project team”.
As a Defi project, Defibox is a decentralized project, but for the long-term development of the project, there are still people who need to maintain, develop new features, etc., and before the project is far from mature, this task needs to be handed over to the Defibox team to complete .
In the early days, Defibox was incubated by Newdex, and the Defibox team is also funded by Newdex, so there is no need to worry about the basic development and maintenance expenditures of the project team; now, the Defibox team has been completely separated from Newdex, and it is indeed necessary to consider the source of this part of the expenditure Of course, this part of the expenditure is also considered in the early token model, that is, it comes from the 15% foundation part.
Assuming a complete project team consists of 10 people (including product development, operation, community support, and project leader), and the average labor cost is 2,500 usdt/month, the labor cost is about 25,000 usdt/month. If the office space cost is 8,000 usdt/month, server support and other office costs are 15,000 usdt/month, and the comprehensive cost is 50,000 usdt/month. If the BOX is held through the sale of the foundation for payment, the current BOX price will be calculated based on the current BOX price. Sell 12,000 BOX/month; currently about 3500 BOX is released every day, and the BOX that belongs to the foundation every month is about 3500*30*15%=15750; this means that under the current circumstances, more than 70% of the foundation needs to be consumed to obtain BOX It is used to maintain the operation of the project team, which means that the funds that the foundation can use for promotion, security audits, and listings are minimal. “There is no food in hand, and the heart is panic.” In the long run, it may be difficult for the team to maintain efficient functional development and updates. It is not conducive to the long-term development of the project.
Also, as a team with no fundraising and no other income, if you want to survive, you can only sell the tokens it holds. On an open and transparent blockchain, the behavior of the team actively selling tokens can easily trigger other holdings. Users follow suit and sell, which is not beneficial to the BOX price.
The vast majority of the protocol revenue (75%) is used to execute BOX’s token repurchase and destruction, which does make a great contribution to maintaining the stability of the currency price for a period of time, but in the current EOS ecological downturn and inactive transactions Under the circumstances, the daily repurchase and destruction volume is far less than the daily release volume, so the repurchase and destruction effect on the currency price will be greatly reduced.
Under the current situation, 30% of the protocol income is used to support the development and maintenance of the project team, which is good for the long-term development of the Defibox project: on the one hand, it reduces the pressure on the team’s expenditure and reduces the foundation’s sale of BOX to the secondary market. On the other hand, linking protocol income with the income of the project team is conducive to improving team enthusiasm: only by working hard to increase protocol income can we get better income.
If the DIP35 proposal is passed, the allocation of 60% of the protocol income for repurchase and risk reserve will be a matter worthy of careful consideration: the current repurchase destruction is not a particularly suitable plan, and destruction is equivalent to throwing the generated protocol income into In the black hole, you might as well try the repurchase + market-making scheme, which can increase the depth of market making and expand the scale of market making, but also increase the scale of risk reserves in disguise; risk reserves are not the only option for EOS, maybe it can Consider comprehensively deploying a package of currencies such as EOS, USDT, and BTC.
Using 30% of the protocol revenue to support the project team does not mean that the Defibox project team can breathe a sigh of relief. As a concession from the community, the project team should work harder to increase the total protocol revenue, not only for themselves, but also for the long-term development of the project. : Leveraged market-making, interval market-making and other optimization improvements to the current market-making model can effectively increase capital utilization and increase protocol income. These beneficial functional innovations can be considered in future functional upgrades.