Hello EDSers, today we look into the newest form of EDS token distribution
What are EDS tokens?
EDS tokens are HIVE income tokens that are pegged and backed to 1 HIVE each. They pay out weekly dividends every Monday based on 12% of the total powered-up HIVE balance of the @eddie-earner account. This is currently paying out an APY to token holders of roughly 35%.
EDS Distribution
Let's get to the meat of the post from the start. EDS has a total hardcap of 500,000 with around 33k in circulation. Some of these were sold during an IPO that lasted 9 months back in 2020, some have been allocated to EDS miners to fund rewards for 2 decades and the remaining amount to be allocated will be going into this new form of EDS distribution.
So far....
| Hardcap | 500,000 |
| Sold during IPO | 20,000 |
| Allocated to both EDS miners | 300,000 |
| Unallocated | 180,000 |
Introducing EDS-vote
This is the newest and will be the last way to mint brand-new EDS tokens into circulation. The remaining 180,000 EDS tokens are being allocated to this and will be released over the course of the next 5-25 years.
What is @eds-vote?
Eds-vote is an account that people can delegate HIVE POWER to. In return for their delegation, they will receive EDS tokens each Monday.
The delegated HP will be used to curate content on HIVE and provide small upvotes for those that hold over 100 EDS tokens. Delegating HIVE POWER to @eds-vote will not result in an upvote. This is not a delegation to upvote service. It is a way to distribute the remaining reallocated EDS into circulation.
Distributing EDS as HP delegation rewards is the best way on paper i can find. This is the perfect way to distribute new EDS while also gaining growth in a slow and predictable way. Based on my projections and to give you an idea, if @eds-vote were to receive 200,000 in HP delegations which is not likely to happen, it would take 25 years to issue all the EDS and extend rewards for EDS miners by 5 more years.
What sort of APY will I get?
50% of the curation rewards earned by @eds-vote in the shortest form
The @eds-vote account will perform full power-downs of its curation earnings. 50% of these rewards will be used to mint new EDS tokens to distribute to @eds-vote delegators and the remaining 50% will be powered up to @eddie-earner to help increase income payments and add more sustainability to the EDS APY.
Curation on HIVE pays at an APY of 8-10% so @eds-vote will issue EDS tokens at a rate of 4-5% at an honest guess.
Im not going to BS here and say that is great but on the flip side, you still earn 2.9% on top of that from HP inflation and you'll be earning EDS each week that pays out HIVE income payments equal to a 35% APY. You could also sell it each week for over-peg as there are a few buyers for EDS.
Why 50/50?
Based on running projections, this works out best for long-term HODLers of the EDS token. 2 HIVE are powered up to @eddie-earner for every 1 EDS issued from @eds-vote. The longer you hold your EDS, the better you are rewarded. When I say longer, I mean consider EDS a lifer token that you will never sell. You should only sell EDS if you are quitting HIVE.
Paying out at a higher rate shortens the length of time we can do this. If we minted EDS at a ratio of 80% of curation rewards, we would run out of EDS after only a few years and have gained little growth for the account doing damage overall. If we minted EDS at a ratio of 10% of curation rewards, it would take over 100 years and there would be no incentive. 50/50 is just right and most of my projections fall in line with EDS miners to ideally both wrap up around the same time in 20-25 years.
When all 500,000 EDS are in circulation, the EDS APY will only increase. This is because the @eddie-earner HP balance will continue to increase long after EDS hits its hardcap. More income is split among the same amount of tokens.
I understand 4% is not great but think long-term. When EDS first launched and the HIVE income APY was only 12%, only a few could see the model and understand its potential. Now the EDS APY is over 35%, people are waking up. EDS are backed and pegged to 1 HIVE, there is no risk of it dropping in value. You can earn 10% from leo.voters for delegating HP but what if the price of LEO drops another 50% because it has unsustainable inflation of over 40%? That can not happen with EDS, its not possible.
The APY is important, yes but the quality of the token you are being rewarded is more important
I decided on 50/50 because I believe most of the community understands long-term consistent growth and compounding is the best plan. We take the pain now to be rewarded later. Delegating HP to get a little EDS each week is painful but after a few years, you'll have a big bag of EDS that are backed by HIVE and you be earning a decent HIVE income. It's as simple as set and forgot.
When is this starting?
Ideally, this will launch within the next 2 weeks.
The code to track delegations and distribute rewards has been written and is ready to go.
I'd like to launch no later than 18-19th April with the first rewards going out 24th of April.
Whats next?
I will release 1 more post at the start of next week showing in more detail some of my projections and how this can work out depending on how much HP is delegated to EDS-vote. This will be more about showing how different things happen depending on how much HP is delegated to EDS-vote. These will include how long it can run for, how long the EDS flip takes place, how the EDS APY is affected, how much the EDS HP balance grows and about 10 other things.
Round up of Key Points
- Delegate HP to @eds-vote to get EDS
- HP will be used to curate content
- People that hold more than 100 EDS will get a small upvote (not guaranteed & dont ask)
- 50% of curation rewards are used to mint new EDS tokens
- 50% of curation rewards are powered up to @eddie-earner
- Newly minted EDS are split between @eds-vote HP delegators each Monday
@eds-vote delegators can then either sell their rewards are keep them to build a HIVE income. EDS are pegged to 1 HIVE each and have a never lost peg from launch 3 years ago so they have a solid history and buying demand on hive-engine.
- This form of EDS distribution lets more people get EDS without having to pay HIVE directly or own EDS miners
- This will better distribute the EDS token as a whole to a wider amount of people.
- Minting EDS from curation rewards is not boom and bust with this incentive planned to last decades.
Final note:
This will not affect EDS miners in any shape are form. EDSM and EDSMM will continue to mint at exactly the same rate as is now. If anything, this will add more years into EDS miner rewards. You will see more in the next post i release next week.
Thanks for taking the time to read through this post. Please feel free to ask any questions you have below.
Please do not delegate @eds-vote...yet
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