The new Tokenomics proposal of the EOS network has passed the BP vote in May 2024. The general plan is:
1. Reduce the overall supply of EOS:
• Impact on EOS price: By burning 80% of the future token supply, the overall scarcity of EOS tokens increases. This could lead to an increase in EOS price due to the reduced supply.
• Indirect impact on RAM price: As the value of EOS increases, the cost of purchasing RAM (priced in EOS) may also rise if the demand for RAM remains the same or increases. Users may need to spend more EOS to get the same amount of RAM.
2. Infrastructure support distributed through middleware:
• Enhanced user experience: 15 million EOS will be allocated to middleware, particularly initiatives led by Greymass, to improve the onboarding experience for new users. Better infrastructure can attract more developers and users to join the EOS ecosystem.
• Increased demand for RAM: As the user base grows, more dApps and smart contracts will be deployed on the EOS network, leading to an increase in demand for RAM. This increase in demand could push up the price of RAM.
3. REX 2.0 Staking Rewards:
• Staking Incentives: Providing attractive APY for staking EOS could potentially increase the total value locked (TVL) on-chain. More users staking their EOS tokens could reduce the circulating supply of EOS, potentially increasing the price of EOS.
• Extension of the staking period: Extending the staking period from 4 days to 21 days may also cause EOS to have less liquidity in the short term, indirectly affecting the RAM market.
• RAM demand: If staking attracts more users to the EOS network, it may indirectly lead to increased demand for RAM as more activity and transactions occur.
4. Allocate 350 million EOS to RAM:
• Market Making and Liquidity: Allocating 350 million EOS between RAM and EOS for market making efforts could increase liquidity in the RAM market. Increased liquidity could help stabilize RAM prices and reduce volatility.
• Support for additional WRAM system tokens: Enhancing liquidity by creating additional WRAM system token pairs could also make RAM more accessible, potentially mitigating price increases by ensuring a more balanced supply and demand dynamics.
5. Redirect system fees to block producers:
• Incentives for block producers: Redirect fees from PowerUp, RAM transactions, and account auctions to head supernode block producers, aligning their incentives with network maintenance and development. This ensures the network remains robust and efficient, indirectly supporting RAM price stability.
• Sustainable Funding: Providing sustainable funding for block producers can enhance overall network health and attract more users and developers to the EOS ecosystem, which in turn will increase demand for RAM.
Summarize
• Increased EOS value: A reduction in the overall EOS supply is expected to increase the value of EOS, which could increase the cost of acquiring RAM priced in EOS.
• Higher demand for RAM: Improved infrastructure, better onboarding experience, and attractive staking rewards could bring more users and developers to the EOS network, thereby increasing demand for RAM.
• Enhanced liquidity: Market making efforts and additional token pairs can stabilize RAM prices by increasing liquidity.
• Sustainable network growth: Redirecting system fees to block producers ensures network sustainability and indirectly supports RAM price stability.
Overall, these changes suggest that while RAM prices are bound to rise due to increased demand and EOS price appreciation, efforts to improve liquidity and infrastructure can help manage this growth and prevent excessive volatility.