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Telos Amend Proposal

Telos Amend Proposal:

Revise the Relative Staking Rewards to be Equal Between REX and sTLOS

By Douglas Horn for the Telos Core Developers

Overview

This proposal would amend the TBNOA to revise the REX and sTLOS parameters to give the same rate of return for each asset pool as opposed to paying REX a 50% greater return rate than sTLOS.

Telos Staking Rewards

Telos is about to add staking rewards to its EVM in the form of sTLOS, to extend some of the benefits of REX staking rewards from Telos Native to Telos EVM. In short, where Telos Native users can stake (temporarily lock up) their TLOS tokens to receive a reward paid out from Telos reserve accounts, without risk of loss or impermanent loss, and also gain voting rights with their locked-up tokens, Telos EVM users will soon be able to stake their TLOS on the EVM in single-asset-staking pools which will give them sTLOS tokens as a claimable receipt for their staking deposit. (REX users also receive REX tokens as deposit receipts but unlike sTLOS tokens, REX tokens cannot be used or transferred outside of the REX system.) Both systems offer protection from loss and impermanent loss common with two-asset-staking. The sTLOS tokens do not confer voting rights the way that REX token balances do. To offset this loss of utility, sTLOS tokens are able to be sold, traded, and staked against other assets in two-token liquidity pools (e.g. an sTLOS/USDC liquidity pool).

Both sTLOS and REX tokens gain value from the constant supply of tokens flowing into the pools every 30 minutes. Since both sTLOS and REX tokens represent a share of the TLOS held in the respective pools, as more TLOS flows in from the reserves, the amount of TLOS that each REX or sTLOS token is worth constantly increases.

All technical components of the sTLOS system are complete and in the late stages of testing in preparation to launch later in September.

Unequal Rewards

Although the forms of staking are intended to provide roughly equal utility, with sTLOS gaining the ability to be further staked for rewards, to make up for its lack of voting rights that REX tokens enjoy, they do not currently earn the same rate of return. Early discussions and a poll of Telos users indicated a community preference for assigning 60% of the staking rewards to REX on Telos Native and 40% to sTLOS staking rewards. In practical terms, for every 100 TLOS that an sTLOS staker earned on Telos EVM, a REX staker on Telos Native would earn 150 TLOS for the same amount of tokens staked.

Upon reflection and consultation, this split seems unfair and unlikely to achieve the primary goals of this program: to increase the total value locked (TVL) on Telos. Telos EVM is currently the fastest growing side of Telos usage in terms of value, number of apps, number of addresses/accounts and other metrics. To give a noticeably smaller share of rewards to Telos EVM stakers would be counterproductive to the goal of increasing the overall TVL of Telos — a metric that has been shown to lead growth in market capitalization for the chain.

This proposal, if enacted by a vote of Telos users on the Telos Amend platform, would equalize the split between sTLOS and REX staking to 50%/50% to provide more equal yield opportunities across both staking platforms and incentivize greater TVL on all platforms in Telos. This proposal seeks to amend the TBNOA clause 44 — Resource Exchange and sTLOS Rewards as follows.

Voting on this Proposal

Any holder of TLOS tokens staked on Telos Native may vote on this proposal using either the Decide Voter app (click for download links) or the Telos web app located at app.telos.net. The name of the ballot is equalstaking which can be voted on using the Decide Voter app or at https://app.telos.net/trails/ballots/equalstaking/1663184291376

The Proposed Text

(Modified text appears in green)

## 44. Resource Exchange and sTLOS Rewards

Upon a 2/3+1 majority vote by the then current Block Producers to do so, computer code and/or contracts enabling a “Resource Exchange” for staking an account’s system resources to a common exchange which leases or rents out said resources to others for a fee (even a zero value fee) and disburses said fees to all resource-staking Members in return for an equal percentage of network income from RAM transaction fees, name bidding fees, or any other fee for commonly owned or managed Telos resources shall be implemented in the Telos Blockchain Network computer code and/or contracts. The form of this Resource Exchange may be modified or removed in the future upon a 2/3+1 majority vote by the then current Block Producers. Once the Telos Block Producers have deployed an Ethereum Virtual Machine (EVM) smart contract named “eosio.evm” onto the Telos mainnet, a portion of the funds designated for the Resource Exchange may be directed to a single-asset TLOS token staking pool implemented as a staking vault smart contract by regularly transferring the funds to the “eosio.evm” address to be designated by the Telos Block Producers as the sTLOS staking account with the purpose of disbursing said funds to all TLOS-staking Members of the sTLOS liquidity pool. Members staking TLOS tokens into this pool will receive a number of sTLOS depository receipt fungible tokens commensurate with the amount of tokens staked and the TLOS-to-sTLOS ratio, which will continuously rise for as long as funds are transferred into the account from the Resource Exchange. For as long as funds exist in the Exchange Token Reserve Fund named “exrsrv.tf”, funds from that account may be deposited into the Resource Exchange account named “eosio.rex” for disbursement at a rate of 1,000,000 TLOS per month through block 98,000,000; 1,350,000 TLOS per month for blocks 98,000,001 through block 113,000,000; 1,500,000 TLOS per month for blocks 113,000,001 through block 128,000,000; 1,700,000 TLOS per month from block 128,000,001. From block 228,000,000 This amount will be 1,700,000 TLOS to the account “eosio.rex” with a percentage further transmitted to the sTLOS rewards account designated by the Block Producers. The amount forwarded from the REX staking rewards account to the sTLOS staking rewards account shall be calculated by first programmatically calculating the current ratio of TLOS tokens staked to REX and sTLOS reward-earning accounts and then multiplying by the governance-determined rewards ratio which as of block 228,000,000 shall be 50.00% of the total amount sent to REX forwarded to sTLOS the staking rewards account. Reverting or “unstaking” sTLOS tokens into TLOS tokens shall require a minimum of 10 days from an account owner’s action to unstake the tokens until the tokens are made liquid for the Member to withdraw. These parameters may be adjusted by a 2/3+1 vote of the Block Producers provided it does not exceed the limits set in Clause 49 “Telos Economic Development”. All references to specific block numbers in any Telos Governance Document refers to that block number or as soon as the Block Producers and developer teams are practically able to deploy such changes thereafter.

The Existing Text

(Removed text appears in red)

## 44. Resource Exchange and sTLOS Rewards

Upon a 2/3+1 majority vote by the then current Block Producers to do so, computer code and/or contracts enabling a “Resource Exchange” for staking an account’s system resources to a common exchange which leases or rents out said resources to others for a fee (even a zero value fee) and disburses said fees to all resource-staking Members in return for an equal percentage of network income from RAM transaction fees, name bidding fees, or any other fee for commonly owned or managed Telos resources shall be implemented in the Telos Blockchain Network computer code and/or contracts. The form of this Resource Exchange may be modified or removed in the future upon a 2/3+1 majority vote by the then current Block Producers. Once the Telos Block Producers have deployed an Ethereum Virtual Machine (EVM) smart contract named “eosio.evm” onto the Telos mainnet, a portion of the funds designated for the Resource Exchange may be directed to a single-asset TLOS token staking pool implemented as a staking vault smart contract by regularly transferring the funds to the “eosio.evm” address to be designated by the Telos Block Producers as the sTLOS staking account with the purpose of disbursing said funds to all TLOS-staking Members of the sTLOS liquidity pool. Members staking TLOS tokens into this pool will receive a number of sTLOS depository receipt fungible tokens commensurate with the amount of tokens staked and the TLOS-to-sTLOS ratio, which will continuously rise for as long as funds are transferred into the account from the Resource Exchange. For as long as funds exist in the Exchange Token Reserve Fund named “exrsrv.tf”, funds from that account may be deposited into the Resource Exchange account named “eosio.rex” for disbursement at a rate of 1,000,000 TLOS per month through block 98,000,000; 1,350,000 TLOS per month for blocks 98,000,001 through block 113,000,000; 1,500,000 TLOS per month for blocks 113,000,001 through block 128,000,000; 1,700,000 TLOS per month from block 128,000,001. From block 228,000,000 This amount will be 1,700,000 TLOS to the account “eosio.rex” with a percentage further transmitted to the sTLOS rewards account designated by the Block Producers. The amount forwarded from the REX staking rewards account to the sTLOS staking rewards account shall be calculated by first programmatically calculating the current ratio of TLOS tokens staked to REX and sTLOS reward-earning accounts and then multiplying by the governance-determined rewards ratio which as of block 228,000,000 shall be 40.00% of the total amount sent to REX forwarded to sTLOS the staking rewards account. Reverting or “unstaking” sTLOS tokens into TLOS tokens shall require a minimum of 10 days from an account owner’s action to unstake the tokens until the tokens are made liquid for the Member to withdraw. These parameters may be adjusted by a 2/3+1 vote of the Block Producers provided it does not exceed the limits set in Clause 49 “Telos Economic Development”. All references to specific block numbers in any Telos Governance Document refers to that block number or as soon as the Block Producers and developer teams are practically able to deploy such changes thereafter.