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EOS's Dan Larimer Has Plans To Reduce Network Congestion

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Stable CPU prices might combat network overload.

Dan Larimer has proposed a new resource allocation model that will combat network congestion on EOS. If the proposal is successful, it will give dApp developers better access to the bandwidth resources that they need to operate their apps. In particular, the change should make CPU and NET resources available at a more stable price.

“The single biggest complaint is that CPU is too expensive [and] that it is too unpredictable in terms of how much CPU bandwidth you get at any given time,” Larimer explains in his proposal. He also adds that the CPU rental market has become speculative, and, as a result, many people cannot commit enough EOS to reserve CPU.

Larimer’s new proposal is essentially designed to discourage speculative activity. It ensures that 100% of CPU is leased from EOS’s system contract at all times, implements a steep (or exponential) price curve, and makes CPU into a non-transferable resource. These features should turn the dynamic resource market into a stable one.

Redesigning REX

This is not the first time EOS has tried to solve its congestion problem. In May, EOS introduced REX, a resource exchange that allows users to stake their EOS, thereby giving their claim to CPU to other users and receive rewards in return. However, REX ran out of EOS as users made large withdrawals, according to Larimer.

REX has another problem as well: incredibly long waiting times. “Lenders end up waiting 30 days for leases to expire or potential renters end up without any EOS for rent because lenders have asked for their EOS back,” Larimer explains. He concludes that there is no simple solution for both parties under the current REX model.

Despite these failings, REX is still operational. “The good news is that REX is working as designed,” Larimer says. Lenders can still retrieve EOS from REX, and the new market will still distribute rewards to REX users in the future. Of course, this all depends on whether EOS actually implements Larimer’s solution.

Two DApps Have Bowed Out

EOS’s ongoing congestion issues hit a fever pitch this month due to an airdrop called EIDOS. According to Coinbase, EIDOS’s campaign is responsible for driving up the price of CPU by over 100,000%. Though it is possible that the campaign will die down in the future, EOS’s CPU prices are just as high as they were several weeks ago.

Due to this incident, two dApps are preparing to leave EOS. The social network KARMA has decided to move to an EOS sister chain called WAX. Meanwhile, the gambling app EarnBet has announced that it will leave EOS within a month unless block producers limit spam transactions. It does not see Larimer’s proposal as a solution.

This may not lead to a mass exodus, however. Given that DApps migrate between blockchains frequently, and given that EOS has about 500 dApps, the loss of two projects will not significantly hurt the blockchain. That said, Larimer’s proposal will be introduced gradually, so other projects may express dissatisfaction with EOS in the meantime.

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