EOS Network Foundation Caps Token Supply at 2.1B in a Bid to Make EOS Great Again

Make EOS Great Again – that’s the mantra of the EOS Network Foundation, which recently green-lit a proposal to cap the chain’s token supply at 2.1 billion.

The EOS Network Foundation has approved a proposal to cap the EOS token supply at 2.1 billion and introduce quadrennial halvings.

The proposal, which was passed by a super majority consensus of EOS Block Producers, will see EOS burn 80% of its future token supply, transitioning from an inflationary token capped at 10 billion to a fixed supply of 2.1 billion.

The move is designed to enhance the economic potential of the EOS ecosystem and mark a “New Era for EOS.”

EOS launched with a 1 billion token supply and annualized 5% inflation in 2018. The last inflation adjustment occurred in February 2021, reducing the annual inflation rate from 1.6% to 0.8%.

The new tokenomics will see the EOS community shift away from token supply-related discussions and focus on other aspects of the chain, such as dApp development, user experience, and chain governance.

“High liquidity with expectation of inflation increases the difficulty of market making, and the market value ranking of EOS continues to decline,” the proposal reads, highlighting the need for such a change.

Of the 2.1 billion fixed supply, 1.15bn is already in circulation (54% of total supply).

In addition to the inflation-tackling measures, the proposal also includes other provisions, such as the allocation of 250 million EOS tokens (around $142 million at today's prices) to staking rewards for EOS and RAM.

The rate of reward emissions will be governed by EOS block producers, and EOS staking rewards are expected to begin by the end of June with the implementation of REX 2.0.

The proposal also includes the allocation of 350 million EOS tokens to a dedicated account managed by ENF and Labs, which will be used to nurture the chain's RAM market cap, which already stands at $300 million.

These efforts will include earmarking funds for the programmatic purchase of RAM from the Bancor pool to support funding of ecosystem initiatives.

In time, EOS users will also gain the ability to stake their RAM — although this contract is still under development.

RAM is vital to the EOS network's functionality, facilitating operations like account creation and dApp execution.

“This strategic overhaul will not only stabilize the token economy but also incentivize active participation and growth within the network,” predicts La Rose.

For the ENF, the update is seen as a shot in the arm for the blockchain as it looks to revitalize its ecosystem and unlock value for token-holders, particularly through primitives like staking, inflation protections, and RAM market support.