Token Flow and Burn Proposal for WPS
From 5% block rewards inflation, approximately 133K EOS are issued daily, and after one year its volume reaches 140K. Of these, 1% is used as block producer rewards, and the remaining 4% is stored in the eosio.saving account. The following is a formula to calculate the amount of tokens newly generated by a date:
Figure 1. Inflation calculation
4% inflation which has been stored in the eosio.saving account amounts daily from approx. 10.6K to 11.2K EOS in the first year. Approximately 40M EOS for the first year in total.
In the moment that this article has been written, around 10.4M EOS have accrued to the eosio.saving account.
What happens when the WPS Referendum is passed?
All the funds EXCEPT 1M EOS will be burned. Until categories are brought into existence with governance, ALL of eosio.saving is burned as soon as it is created.
One million EOS is moved to eosio.wps. This 1M EOS is for emergency proposals, including the four proposals already submitted: ECAF, Mainnet Repository, WPS Dev group, and The Emergency Committee operation expenses.
Figure 2. First eosio.saving token distribution process
If you look up to the budget projection of EOS WPS first referendum, only 320K EOS will be used for the said four proposals at the EOS price of about 6$. Then what about the rest? Whenever a proposal is submitted, the Emergency Committee decides if the proposal is urgent or not. If it is found to be urgent, and the Emergency Committee finds it worthy of recommendation, the proposal is published to the portal for community vote. If passed, it gets funded from the balance of the 1 million not already allocated. At the end of the Emergency Committee’s existence the remaining funds in the eosio.wps account are distributed to the Categories or burned.
Category Funding and Proposed Burn
There are five WPS categories : Oversight, Infrastructure, Community, Development, and Miscellaneous. If a proposal is found to not be urgent by the emergency committee, the proposal is deferred until the appropriate category has been given a community selected governance and is funded from 10% of newly generated eosio.saving from time the category is “launched” with a governance.
If three categories are launched, then 30% of newly created tokens will be allocated to the three categories, each by 10% respectively. The rest will be burned until the next category is created. Although exact calculations can be performed by the formula above, this overall flow is as follows:
Figure 3. eosio.saving token distribution
after three categories(Oversight, Development, Miscellaneous) created
If each of the 5 categories is launched and funded at 10% of each newly created reward, 50% of 4% (i.e., 2%) is still burned upon creation.
Figure 4. eosio.saving token distribution after five categories created
written by Leo Seo, a member of WPS working group & data scientist at EOS NodeOne