A growing trend of distributing value to token holders through reward sharing has been gaining traction across the different layers of EOS. It’s no surprise that the staggering rate of change, built on free market principles, has been met with various forms of resistance and hypocrisy.
On EOS, Eastern BPs like Newdex and Starteos provide the ecosystem with useful applications and tools while producing blocks with above average performance. Still they get cast in a negative light for providing value to token holders in the form of voter rewards. “This needs to change soon or this will continue going south very quickly.” While on DAPP Network, Western DSPs (dApp Service Providers) such as Bloks DSP, dominate the inflation stream by providing massive staking rewards without providing any real value to the DAPP network and yet, nobody bats and eyelash. “Nothing to see here.”
Do these patterns of biases and double standards hold any weight? Shouldn’t we be building bridges instead of walls?
Shame on NewDex!
First and foremost we need to establish what should be expected from a BP on EOS. The general consensus is that a BP should provide value to the network and token holders which can be done in a variety of ways such as:
- Developing useful tools and applications.
- Maintaining excellent infrastructure.
- High levels of transparency and communication.
NewDex is one of the first and only EOS-based exchanges most of us in the West have ever used. NewDex not only provides the most liquidity for exchanging your favorite EOS-based tokens but also has been evolving at a dynamic rate by consistently providing upgrades and new features.
On June 18th, 2019, NewDex launched the Newpos staking pool, a move that paved the way towards NewDex becoming a top-21 BP. Currently about 11.8 Million votes are proxied to NewDex and the rate of return is around 3.15% APR. NewDex is giving 90% of their block rewards back to token holders.
It didn’t take long before the experts came flying in to various English telegram channels to share their opinions. The echo chambers were being littered by the terms “vote buying,” “value extraction,” “race to the bottom,” and “death of DPOS.” Many of the same community members that were thrilled to do away with the ECAF and Constitution in favor of the EOS User Agreement, were now vilifying an entity that was playing within the rules they endorsed. Instead of spitting venom, and casting NewDex as the evil villain based on our own perceived morals we should evaluate their value with something tangible.
Thankfully AlohaEOS has tools and metrics that allow us to assess BP Infrastructure. While NewDex doesn’t have an incredibly large sample size, we can see they produce well above average CPU execution times of less than 1.4 ms.
Block Producers are expected to be transparent and provide basic information about themselves. They are also expected to maintain a public API, as well as Peer-to-Peer endpoints. NewDex satisfies all of these requirements.
dApp Service Providers (DSPs) are similar to Block Producers on the EOS mainnet. DSPs maintain DSP infrastructure and offer various services on the DAPP Network such as LiquidvRAM, LiquidAccounts, LiquidOracles and LiquidAirdrops. Similar to EOS, the DAPP Network has inflation rewards, which go to DSPs to help maintain their infrastructure and provide the services.
“Nothing to see here.”
In a very similar fashion to NewDex Newpos, Bloks DSP burst on to the DAPP Network DSP scene by sharing staking rewards with token holders who stake their DAPP to Bloks. Bloks DSP takes a 20% service fee and distributes 80% of the inflation rewards to their stakers. But unlike NewDex, Bloks DSP provides next to no value to the DAPP Network. Not only are they not maintaining any DSP infrastructure, they also have no intention of offering any of the DSP services like LiquidvRAM, LiquidAccounts, LiquidOracles and LiquidAirdrops. To be clear Bloks was not the first to offer staking rewards, they were the first to offer staking rewards while not providing any DSP infrastructure or services.
There is nothing in the foreseeable future stopping Bloks from continuing this inflation racket. The demand for DSP services is currently low and the masses of DAPP holders who are holding for speculative purposes are incentivized to stake with the highest bidder.
So where are all the pundits and moralists? Why aren’t they berating the LiquidApps’ telegram channel, pointing fingers and echoing the same sentiment they dished at NewDex? Where are the chants of “race to the bottom,” and “the death of DAPP”? Why does Bloks DSP get a free pass? Why the double standards?
Bridges Not Walls
In order to thrive as a community we need to be building bridges instead of putting up walls. Those of us in the west should not pick sides and alienate those in the east. We can have differences of opinions and still be on the same team.
Why doesn’t the LiquidApps community get together, debate and agree on a common denominator that defines the role and responsibilities of a DSP, and developed a regproducer Ricardian Contract similar to EOS?
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