This week the EOS community rejoiced when block producers approved an MSIG to change the total inflation from 5% to 1%. Not only that, block producers also burned all of the EOS tokens that had accumulated in the eosio.saving account since the token burn in early 2019.

When the EOS Mainnet was launched in June 2018, the total inflation was set to 5%, which included 1% for block producers and 4% for a Worker Proposal System. However, the community was never able to reach consensus on how to spend those Worker Proposal funds and the 4% of inflation simply accumulated in the eosio.saving account. In early 2019, block producers decided to burn the accumulated funds in the eosio.saving but left the inflation rate untouched. Since that rate was hard-coded into the EOSIO software at the time, it would have been problematic for block producers to adjust that setting, essentially forking away from Block.one’s EOSIO repo. Thankfully, in EOSIO 1.8, Block.one implemented a setting for network inflation, which enables block producers to change the inflation rate by submitting a multi-signature transaction (MSIG) that requires approval by 15 of the top 21 block producers.

Since all of the accumulated 4% of inflation has been burned, we can now confirm that the EOS Mainnet has effectively only had 1% inflation since the start of the network. According to some quick research, this makes EOS the network with the lowest inflation rate among all of the major cryptoassets. The EOS Mainnet is processing an ungodly amount of transactions at a very low cost.

Let’s dig in a bit more into these inflation numbers and compare some interesting statistics:

EOS Mainnet costs (2020-02-26)

Ethereum costs (2020-02-26)

According to these numbers, the Ethereum network costs ~34x more to operate than the EOS Mainnet! Even when considering that Ethereum’s marketcap is ~7.6x larger than EOS, we can still observe the superior efficiency of the EOS Mainnet block production.

Furthermore, this week’s inflation reduction and token burn is a clear indicator that the incentives between block producers and token holders are extremely well aligned. The network is performing extremely well right now and the will of token holders was carried out by the block producers they’ve elected. This is DPoS at it’s finest! 👌