TIP: 0027
Title: Creating a RAM reserve for RAM Administration
Author: Jan Smit, Interim RAM Administration Director <email: [email protected]>
Status: Draft
Type: Protocol
Created: 2018-10-21
This tip proposes a RAM Administration account receives RAM before launch rather than the RAM Administration having to compete for the purchase of RAM after launch. Furthermore this tip proposes the RAM administration receives such amount of RAM that the total reserved RAM at launch is ~50%. The RAM Administration will gradually release the RAM into the market in the weeks and months after launch.
The above measures are expected to significantly reduce speculation in the early days / hours when the cheapest RAM tranches are up for sale. This also sends a clear message that Telos will actively discourage speculation on Telos RAM prices. Finally, the profits of selling the RAM can be used to provide RAM grants to DApps.
Due to the sharp increase of RAM prices in the Bancor model going from 0% reserved to higher numbers, speculators are likely to have sophisticated RAM purchase algorithms ready to buy the first and cheapest tranches of RAM. The lucky person to buy the first 1GB slice will pay only 40k TLOS. In this scenario it is unlikely that the RAM Administration will be able to buy into the first tranches.
During the last 2 months the RAM prices at EOS Mainnet have reached a fairly constant level of ~0.1 EOS per kB. This price level corresponds with around 55 to 60% of RAM being reserved.
This tip proposes (i) to allocate the RAM Administration a pre-agreed amount of RAM before launch and (ii) that this amount effectively brings the reserved amount at launch to 50% (=6GB).
Assuming 1,5 GB is staked as RAM in the creation of the other genesis accounts, this means that at launch 4,5GB will be allocated to the RAM Administration. The RAM Administration will sell most of this RAM in the following months to the Bancor contract when the % of RAM reserved exceeds the 50% reserved threshold by a certain margin. At the 50% level the RAM price is around ~0.11 TLOS per Kb. Assuming the TLOS-USD rate is well below the EOS-USD rate, the Telos RAM price will be well below the EOS RAM price.
The RAM administration may retain some RAM (order of magnitude 10% of all RAM) as a reserve to discourage speculation in the future. The purchase cost for the first tranch of 4,5 GB is ~300k TLOS (based on Excel calculations which need to be confirmed shortly in test). When 50% of RAM is reserved the RAM price equates ~0.11 TLOS per kB. A full RAM sell, including 2x 0,5% trading fees, will cause a ~220k TLOS profit. The RAM Administration will use this profit when realized to support DApps through RAM grants. The additional benefit of the approach outlined above is that it is likely to significantly reduce the hectic and volatile RAM prices in the early days/ hours after launch. It also send a clear signal that Telos’ objective is to create a stable RAM price environment conducive to DApps.
The Telos Blockchain Network Operating Agreement (TBNOA), Clause 22, “Initial Token Allocation” shall be amended to read as follows:
New Telos accounts will be created to fund the Telos Foundation which will receive 6,000,000 TLOS tokens, the Telos Foundation RAM Administration which will receive the RAM equivalent of 300,000 TLOS tokens (or such amount of TLOS which will bring the total reserved RAM amount at 50% at launch), the Telos Founders’ Rewards Pool which will receive 6,000,000 TLOS tokens, the Telos Community Rewards Pool which will receive 1,000,000 TLOS tokens, and the Telos Exchange Token Reserve Fund which will receive 140,279,973 TLOS tokens.
(discussion is open)
This document is in the public domain.