RFC: Proposed Text for New Telos DeFi Instrument

Monday, Aug 10, 2020 by GoodBlock

by Douglas Horn

The recent Telos RFC: Creating an Innovative New DeFi Instrument to Bring New Exchanges to Telos generated strongly positive feedback from the Telos Community along with several suggestions, questions, and comments. Following this community feedback, I have created a proposed text of a Telos Amend proposal to implement this initiative. Please review the following proposed clauses to the Telos Blockchain Network Operating Agreement (TBNOA).

Clause 23 is a revision of the existing clause which would allow funds collected from the TLOS Recovery process (completed December 30, 2019) to be used to create bond-like NFT-controlled holding contracts for discounted sales of locked TLOS tokens for the purpose of allowing more funds for TLOS exchange listings and to delay the sale of large amounts of TLOS tokens earned by the Telos Foundation, Worker Proposal recipients, Telos Core Developers, and Block Producers.

Clause 50 is a new TBNOA clause that describes the methods and processes of allocating these funds. There is an added proposal that once the TLOS price remains over $2.00/TLOS for 30 days without interruption, this TLOS Recovery account will stop selling new NFT bonds and send all remaining funds in TLOS Recovery to the Exchange Reserve Fund. The rationale for this is that once TLOS reaches this price consistently, the funds that were needed to expand exchange onboarding will have done their job. Of course, this can always be modified (either way direction) by a community-voted Telos Amend proposal, but I believe that anything meant to be a temporary measure should have some form of sunsetting built into it, even if there may be changes later.

Please review the proposed amendments for community discussion. Once a consensus emerges, I will make any broadly supported changes and then officially submit the Telos Amend proposal for voting.

23. Requirement to Opt-in as a Member
The Telos Initial Distribution will include all accounts from the EOS Snapshot. However, it is unknown which EOS Snapshot account owners may wish to opt in and become Members of the Telos network. Because all token holders must agree to become Members by accepting the mutual representations of this Agreement, accounts that have no transactions 63,000,000 blocks (approximately 365 days) after the activation of the Telos network are subject to deletion or nullification by the Block Producers at that time or in the future, provided no transactions have yet been made. Tokens in any deleted or nullified accounts will be removed from those accounts and deposited in the TLOS Recovery account named “tlosrecovery”. Funds may be drawn from this account by a 2/3+1 vote of the Block Producers solely for the purposes and in the manner described in Clause 50 “TLOS Sold as Delayed-release Non-fungible Tokens”.

50. TLOS Sold as Delayed-release Non-fungible Tokens
TLOS tokens held in the TLOS Recovery account named “tlosrecovery” may be allocated by the Block Producers to an account designated to collect TLOS tokens for sale via smart contract-controlled delayed release, either in regular increments or at the maturity date of the holding period. These funds may be sold at a discount on a public market available to any Telos Member in the form of a non-fungible token (NFT) holding contract that controls the timed-release and ownership of the TLOS and which may be further sold on a secondary market. The entire face value amount of the sale shall be transferred from the TLOS Recovery account to the control of the NFT contract account upon sale. The holding term and discount rate offered to the original purchaser Member shall be determined directly by or via a smart contract deployed for this purpose approved by a 2/3+1 vote of the Block Producers. Funds paid for these NFT-controlled TLOS shall be held in the TLOS Recovery account or another account designated for this purpose and in a form (e.g. BTC) by a 2/3+1 vote of the Block. Funds in the Telos Recovery account may be used solely for the purposes of: a) Paying exchange listing and related required fees approved by a 2/3+1 vote of the Block Producers; b) Paying or providing liquidity or market-making fees to ensure reasonable trading liquidity of TLOS tokens as determined by a 2/3+1 vote of the Block Producers; c) Exchange for TLOS received by the Telos Foundation, Telos Core Developers, Economic Development Fund, Block Producers and Standby Block Producers as block producers pay, or Worker Proposal System recipients for the purpose of delaying large sales of TLOS on the open market when approved by a 2/3+1 vote of the Block Producers. All TLOS and other token prices shall be determined by the Telos on-chain token price oracle at account “delphioracle” or at some other Telos price oracle approved for this use by a 2/3+1 vote of the Block Producers. Prices for sales occurring without requiring a Block Producer approval vote shall be based on the most recently reported oracle price prior to execution. Prices for sales requiring a Block Producer approval vote shall be based on the most recently reported oracle price as of the creation of the Block Producer voting multi-signature transaction which shall expire within 48 hours of creation if not previously executed. Once the public price of TLOS on the approved Telos price oracle exceeds $2.00 US dollars for an uninterrupted period of 30 days, all unallocated TLOS tokens in the “tlosrecovery” account will be sent to the Exchange Token Reserve Fund account named “exrsrv.tf”.