A Full Breakdown and Explanation
What is privEOS?
PrivEOS is a new protocol from Slant Ltd that enables apps, companies and brands to let users own and control their data.
What is the difference between Slant Ltd and privEOS?
PrivEOS is the product and Slant is the service company creating the privEOS software. As the service company, Slant will continue to update the privEOS software, as well as develop new modules for the protocol.
Does privEOS have a token?
PrivEOS has a private token that allows the network to govern and organise itself as well as allowing for the automation of costs and payments amongst all participating parties.
Why does privEOS have a private token instead of a public token?
Because privEOS wants to engage with as many businesses, applications and users as possible and these customers predominantly reside outside of the eosio ecosystem and currently prefer using fiat rather than crypto to pay for their services (at least for now).
Having a public token would add a layer of complexity that simply isn’t needed. While public utility tokens can be advantageous for whoever issues them, they add a substantial amount of friction to the system that we’d rather not have.
Instead, we see an internal private token as the perfect way to run the internal structure of costs, billing, rewards, voting and governance for the privEOS DAC.
As well as fiat, privEOS will also accept payments in crypto.
How many privEOS tokens will there be?
There will be 1,000 privEOS tokens. Out of the 1,000 privEOS tokens, 800 tokens will have delegated rights attached to manage costs, billing, rewards, voting and governance among Node Operators and Slant Ltd. In addition, 200 privEOS tokens have permanent rights attached to incentivize experts, advisors and qualified investors.
How does the privEOS token work and what is its function?
Up until recently, coins and tokens have either represented units of value in the underlying software or protocol or a means of paying for transactions within it and most crypto projects have tended to use them in this very narrow way. However, with the advent of eosio, tokens can have different functionality and conditions attached to them through the inclusion of smart contracts and can thus represent much more than speculative value or a means by which to pay for transaction costs.
In the case of privEOS, the tokenomics will be structured very differently.
Instead of exposing the value of the privEOS token to the wild swings of the public crypto markets, each privEOS token will instead represent a unit of rights and obligations for the service provided in the entire privEOS project.
The token is therefore unlikely to ever have a public price attached to it, as it’s not designed to hold any kind of spendable value. Instead its value is allocated through the rights to privEOS revenues.
As well as a claim on income generated from the privEOS network, the privEOS token also represents voting rights. i.e. Node Operators will hold 60% of the voting rights within the DAC to align on upcoming changes and improvements that may or may not affect rights and obligations represented in the smart contract. Node Operators also receive 60% of the gross income generated from the privEOS network for the service they provide.
PrivEOS in a Trustless- and Choice Model
PrivEOS offers two operating models for the user - the Trustless and Choice Model. In case of the Choice Model, which will be released first, the user selects its Node Operators he or she trusts to store fragments of their encrypted keys and private data. In case of the Trustless Model, the protocol automatically selects Node Operators with the highest trust index. The Trustless Model will be released at a later stage to initiate and to optimize a decentralised approach for the Trustless Model on the mainnet.
PrivEOS revenue allocation is paid directly and proportionally based on the number of privEOS tokens each token holder has in their possession. This means that, the more privEOS tokens you hold, the greater proportion of gross revenue you’ll receive from the privEOS project.
All revenue generated by privEOS will be distributed evenly, proportionally and directly to the 1,000 priveos tokens.
800 priveos tokens come with Delegated rights. 200 priveos tokens come with Permanent rights.
All tokens whether Permanent or Delegated have the same rights of value – meaning both Permanent and Delegated tokens receive the same level of (distributed) income per token.
All tokens whether Permanent or Delegated hold the same voting rights.
PrivEOS tokens with Permanent rights attached
PrivEOS tokens with Permanent rights attached, enables the owner to receive a proportion of gross revenue generated by the privEOS protocol in perpetuity for their expertise, advise and financial support in the project next to its capability to vote for changes presented by the DAC. The DAC has no jurisdiction over Permanent tokens; instead, individual ownership rights and keys are assigned to these particular tokens. Permanent tokens will represent 20% of supply.
In theory, privEOS tokens with Permanent rights attached can be privately bought and sold, as they are the property of whoever owns them. However, the characteristics of Permanent rights come closer to an incentive program for key roles in this project to bring it alive, bootstrap and scale it in different stages.
PrivEOS tokens with Delegated rights attached
PrivEOS tokens with Delegated rights attached are delegated to participants who perform some type of function, service or task within the privEOS ecosystem (such as running nodes, performing a service company role etc). If the holder of the Delegated tokens stops performing the function or task allocated to them, or performs below the standards in which they agreed to perform the said task/function – then the tokens could potentially be recalled via a smart contract that’s attached to them.
80% of priveos tokens will be Delegated. 60% of which will be delegated to Node Operators and 20% will be delegated to Slant as the service company.
Why have a token with two different rights attached?
For many reasons.
PrivEOS is an ambitious project with a need for expertise from different areas and investment capital. Permanent tokens are therefore ideal for issuing to VC’s, qualified investors, founders and advisors in exchange for startup capital, ongoing funding and creating,bootstrapping and scaling the network.
Any future income the Permanent token holders receive is protected through owning tokens with Permanent rights attached. Whilst nobody can guarantee that the privEOS project will be successful, Permanent tokens can at least guarantee that if revenue is generated from the privEOS project; then a share of that revenue is protected in perpetuity under permanent ownership rights for their expertise, advise and in some cases capital
It must be understood from the outset that Permanent token rights are protected and cannot be taken away through a change in policy or through a DAC vote.
The 600 privEOS tokens for Node Operators will be issued with Delegated rights attached. These tokens will be kept in their own pool within the privEOS smart contract and 60% of all generated revenue will flow into this pool where it can then be distributed amongst participating Node Operators.
200 privEOS tokens with Delegated rights are hold by Slant for building and maintaining the network.
Node Operators and Slant will not hold Permanent tokens unless they wish to also become accredited investors in the privEOS project.
Can anyone buy privEOS tokens?
Providing you are an accredited investor you can buy privEOS tokens with Permanent rights attached.
PrivEOS will be run as a private DAC. For legal reasons, we cannot and will not offer the token for public sale.
Permanent tokens make up 20% of the total token supply.
Permanent tokens are kept in a separate pool and are assigned to VC’s, accredited investors and founder/advisor accounts.
Tokens with Delegated rights attached are assigned in exchange for work or tasks (such as operating a node or building software).
Why has privEOS chosen to be a private DAC?
We wanted to blend decentralization with an efficient level of governance.
The privEOS node network relies on important parties such as service providers and experts. Each parties’ function, cost and income is described in a smart contract represented by the privEOS token. Every token holder gets paid for his/her service or expertise by Slant as the service company. Next to the service and expertise provided, each token holder also participates in the privEOS DAC (governance).
How do I become a Node Operator on privEOS?
By simply running a node on privEOS. See our GitHub for instructions (goes live at launch). Once your node is up and running, you can register with the privEOS smart contract by calling the
regnode action, that’s our equivalent of
regproduce. The regnode action charges a small fee of 10 EOS (400 TLOS) that goes into the general revenue distribution to prevent spamming.
Is it only Block Producers that can become Node Operators?
No. Any business with available infrastructure and technical know-how can become a node operator on privEOS. However, in order to be selected as a Node Operator by users of the privEOS protocol, you would likely need to have a good reputation in place. You will also need to post a bond.
Why do Node Operators need to post a bond?
In case of the choice model, businesses, applications and users can select up to 30 Node Operators, in case of the trustless model up to 30 Node Operators are selected to store fragments of their encrypted keys and private data. If a Node Operator decides to run a node on privEOS and then wishes to quit at some point in the future, then there needs to be an incentive for them to handover their portions of encrypted key fragments back onto another Node Operator. The bond incentivizes the Node Operator to complete this handover process. Once the handover process has been completed, the node operator has their bond returned to them.
How much is the bond and who keeps it?
The bond is 1000 EOS and if technically feasible, will be kept in REX so Node Operators can earn interest on it.
For the Telos Network, the bond is 40,000 TLOS and again, will be kept in TREX (if technically feasible).
In order to encourage Node Operators to start joining the privEOS network, bonds can either be paid upfront or accrued post launch.
PrivEOS will also create a proxy and will vote for Node Opertors operating a privEOS node. If there are more than 30 Node Operators operating a node on privEOS then preference for Node Operator selection will be given to the nodes that are performing the best on the privEOS trust index.
Once the bond level has either been paid or accrued, the Node Operator will begin receiving 90% of their pay. The other 10% of their pay will continue to be added to their bond for a period of 12 months. The DAC will then take over the responsibility for setting what percentage level of pay the ongoing node operators’ contribution towards the bond needs to be set at.
Setting the percentage level of pay for bonds will be a balance of incentives. It needs to be high enough to incentivise the completion of a handover in case a node operator leaves the network, yet low enough so as not to unduly impact the viability of running a node.
Won’t most Node Operators on privEOS be the same block producers who have taken over EOS main net?
No, as there is no token to trade for votes, selecting Node Operators on privEOS is completely different from how Node Operators get selected on EOS.
It will be businesses, dapps, applications and users from the outside world that will be selecting which node operators they want to use/select for their particular use case or simply managed by the protocol itself.
Selection of Node Operators within privEOS is a process of reputation, trust and choice managed directly by the user or by the protocol, it has nothing to do with how many tokens you have access too.
As a Node Operator, how do I gain a good reputation on privEOS?
Already having a good reputation within the eosio community will put you in a good starting position, however, outside of the eosio community you will likely be an unknown entity. In which case, privEOS will run a trust index that will display the amount of fragmented key and file shares your node is successfully running and will display the reliability and uptime of your particular node. Businesses and applications outside of the eosio ecosystem can then use this technical trust index as a guide for selecting Node Operators. Being among the top 30 Node Operators will help you to be chosen by the protocol in case the user of privEOS selects the trustless model.
As a Node Operator, how will I get paid?
The pay (revenue) you receive is distributed via a self-adjusting smart contract that automatically divides and assigns the 600 privEOS delegated tokens to the Node Operator pool which sits inside the privEOS smart contract.
All revenues coming into privEOS will be visible to the DAC and 60% of this will flow into the Node Operator pool.
The individual Node Operator’s share of the revenues being accrued inside the Node Operator pool is determined by the number of key fragments stored (virtual token), so the more files and key fragments a Node Operator has been selected to store in comparison to other nodes operating on the network, the greater the proportion of the revenue they will receive.
Each Node Operator is able to withdraw their share of the Node Operator pool whenever they want by calling the withdraw smart contract action.
If a Node Operator wishes to permanently leave the privEOS network, they can by completing a handover process, which will involve passing their share of key fragments onto another Node Operator within the privEOS network. By completing the handover process, the Node Operator wishing to leave the network, will receive their full bond back plus any interest accrued.
Who sets privEOS pricing?
The privEOS DAC.
As Node Operators hold the majority of the stake (60%), they will hold the majority vote in determining what privEOS will charge as a service.
It is anticipated that Node Operators will vote for a pricing structure that will not only cover all of their infrastructure and employee costs, but also offer a competitive rate when compared to other market participants.
Pricing will be set using the median average voted for by DAC members.
Compared to the standard mean average, the median average is resistant to outliers, meaning a minority of participants cannot (inadvertently or maliciously) influence the price by setting an artificially high value.
- Testnet Signup for Node Operators: https://www.slant.li/testnet-signup/
- Developer Documentation: https://github.com/rawrat/priveos-client/wiki/Getting-started
- PrivEOS Telegram Channel: https://t.me/SLANT_official