How really decentralized is Telos, the EOSIO software fork? Let's look at the Telos launch group (TLG); Part 2.

In the first part of the series, we looked at Douglas Horn, the architect and author of the Telos whitepaper and GoodBlock, the organization that he started in terms of decentralization of the different facets of that organization. Now we will look at the Telos launch group (TLG), the group that actually put the whole Telos network together. First of all we go ahead and define decentralization.

Decentralization according to Wikipedia is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.

On July 12, 2018, an announcement was made concerning the Telos network and this was well received by the EOSIO community. Initially, 6 Million Telos tokens (TLOS) were going to be shared by Appointed Block Producers (ABPs) to launch the network. Concerns from the community signaled that the amount of the reward was pretty centralized. This was scrapped and the Telos Launch Group decided to form the Telos Founders Rewards Pool of the 6M TLOS that will be divided amongst people that will be involved the TLG. Also 1 M TLOS was set aside to reward people that wanted to get involved in promoting Telos but could not have the time commitment like the TLG. The Telos Launch Group eventually grew to about 120 people. There were even more countless more people that got involved in the promotion of the Telos network.

The 120 people involved in the TLG were put in different groups, working together as teams with the goal of bringing what was on the whitepaper into reality. These were groups like exchange outreach group, dApps outreach group, code generation, governance, promotion, etc. There were weekly updates on where the teams were in regards to what they were working on. These meetings were held live for the community to watch and also uploaded for anyone to experienced. I would say personally that it was amazing to watch how the team came together. It was truly decentralized.

Now, the TLG had a launch checklist that needed to be satisfied before the network was launched. Because of this checklist, the launch kept getting delayed. With this delay, there was a vote to increase the rewards for the Launch group by 300 percent to 18 M TLOS. Personally, I understood that the Launch group had been working on the project for a while and when delays come up, people will need more compensation. Adding to that we are in a brutal crypto recession so the price discovery of the Telos token might not be that great.

I was concerned about the amount of TLOS tokens this was going to create. Now, one of the reasons that Telos was received well in the EOSIO community was the issue of people that had so much EOS that are called whales and the kind of influence that they had on the community especially in terms of voting. Was this increase in TLG reward tokens going to going to cause the same issue?

In Telos network there will be a cap of 40K TLOS tokens for each address that will be receiving the forked TLOS tokens. This is to limit the influence of these whales especially in the area of voting. These 18 M TLOS that the TLG will receive had no caps on them like the 40K account limits and also no vesting period. For those that are new to crypto, vesting periods are time limits put in place where early investors don't have access to their tokens so that there is price discovery in the tokens for the project and the price does not go down a lot because of massive selling. When some of us involved in promotion of the network brought this issue up on the Telos Foundation telegram group, some in the Telos Launch Group said that they were for personal choice and freedom concerning the reward tokens so there should be not limits. Personally, I was not buying this because if there were restrictions on the whale addresses for the genesis snapshots, why not put the same restrictions on the TLG reward tokens.

Some in the TLG said there was not enough time to implement this limit for the TLG tokens. I could understand that a bit because there was so much that the TLG was trying to implement in a short peroid of time. Apparently, the people in the TLG that will be receiving a majority of the tokens had wanted this limit to be implemented but it was voted down by majority of the TLG. Most of the people that will earn the largest share of the rewards have pledged to limit their voting to 40K so as not to influence the votes or BPs colluding as we see on the sister chain EOS. Anyway, I was somewhat comforted that these leaders thought this was an issue. Another issue was that since there was no vesting period for these tokens, there might be a lot of dumping. Again, some of the TLG members said that they will be acquiring more tokens instead of selling.

There is a saying in cryptocurrency that says, "trust but verify." So I will say that this is one area that I don't think the Telos network is decentralized enough. Except there is a way to verify what some of the TLG members said will happen with their tokens, we will just have to rely on their good faith. Now, the reason I said that in this TLG rewards area that Telos is not decentralized "enough" might sound negative but it is actually positive if you put this in perspective with other projects and you will understand what I mean in a while.

If you look at the tokens reserved for TLG, the 18M TLOS is still very small. BlockOne the creators of EOSIO software from which EOS came from holds 10% of total supply of EOS even after raising 4 Billion dollars from the community. With that amount of money and tokens, they could have a very significant influence on the network. Telos did not raise any money and depending on the price of Telos when it trades on exchanges, there might not be a lot of influence. The Worbli foundation which has another fork of EOSIO called Worbi will hold about 30% of the total supply of Worbli tokens. If you add executives, founders, board, advisors and strategic partners, it goes up more than 35%. 18M TLOS is about 5% of the total supply of 343M TLOS. Not only that but TLG has about 120 people sharing that 5% which reduces the amount that an entity can get from this amount. BlockOne and Worbli foundation have less people sharing in their own rewards which means that lots of tokens in these projects are in control of very few people.

When Satoshi created and mined Bitcoin, he kept 1M Bitcoins which is about 5% of Bitcoins. That is one person in charge of a lot of coins in a network. I understand that those tokens have never been moved, but it's still a large amount for one person to hold. Even though it would seem that in this area of TLG rewards, Telos does not seem as centralized, when we look at other projects in comparison, the TLG rewards is still the most decentralized in terms of token distribution.
As it says on the Telos foundation website, "Blockchain Perfected," but the Telos launch Group will try to get there even though even though it is a tall order.

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