EOSIO Proposal Would Prevent Users From Buying Blockchain Resources

The firm behind the EOS blockchain and token, EOSIO, proposed a major change to the network and its resource allocation system which would require users to rent network resources. As a blog post outlined, the EOSIO proposal wants to avoid network congestion caused by the inability to employ unused Central Processing Unit (CPU) time and bandwidth.

According to the blog post posted by EOSIO, the network now suffers from a poorly designed resource allocation system that allows most of its resources to go unused despite significant demand, precluding the network from operating at full.

During an outage like this, REX was managing around 30% of the network and its resources. When it ran out of them, “only a small percentage of the remaining 70% of the network’s resources were actually being utilized, evidenced by the fact that less than half of the blockchain’s total capacity was being used.”

This is why the EOSIO proposal wants to change the REX system. As the EOS news featured and outlined it:

“Under the new proposed system, a user will pay a resource rental fee via a smart contract to be granted 30 days worth of CPU/NET from the total supply. After 30 days the rental must be renewed and pricing is automatically adjusted using a market based mechanism, based on changes in supply and demand for CPU/NET resources.”

A new staking model would let users be able to stake EOS tokens in the new system. However, instead of obtaining CPU/NET resources, they would be compensated with fees from the EOS name auctions, RAM fees and proceeds from CPU/NET rentals.

“The objective of proposing a transition from a resource entitlement model to a leasing or rental model is to remove the influence of speculative markets over resource pricing. Introducing a rental market with pricing based on overall resource utilization will make resource allocation more predictable and reliable for the community,” the post featured in the altcoin news also explains.

The EOSIO proposal also shows that the resource’s price is based on their supply available out of the total. The less CPU/NET available, the higher the price. This transition would be gradual and more resources would be progressively shifted from the old REX implementation to the rental system over time.