Eyal Hertzog (Bancor) on RAM

Eyal Hertzog, Product Architect, Bancor on RAM at EOS Community Conference 2018.

Explaining RAM:

“Everyone is talking here about…the transactions per second of EOS. Which is amazing, right? We don’t see those numbers with other blockchains. RAM is the reason that we can do that because EOS is built in such a way that all the transactions are in memory. However this is a very scarce resource and a very expensive one. This is why it’s important to allocate it in the best, optimal way.”

On high costs for users:

Eyal: “…as much as we raise the barrier to how much it costs to launch an application on EOS, it means we’ll have less and less applications and less and less use cases that make sense financially, and we don’t want to do that. RAM is like an asset right, I buy RAM and then I can sell it. There is an issue with that because I cannot rent RAM, if I could rent it, it wouldn’t be such a problem. But it’s impossible today.

Imagine a real estate market where everyone could buy houses…but people could buy houses just for investment, and if you cannot rent the house, then all the houses that were bought for investment…would stand empty. This is really bad resource utilization.

There are solutions for that. We should strive for a solution for that and strive to make sure that the resource utilization is…as high as possible without hurting the free market principle, and there are ways to do that. Like you could have a property tax on the house, making it a bad long term investment. It could be a good short term but a bad long term investment.”

On airdrops:

“It’s a matter of balance…airdrop can be used in a funny way. If you airdrop a lot of tokens to a lot of users who have no idea what this token is an don’t care. First of all it’s going to show your market cap is much higher than it really is because most of them they don’t care about it. I think that maybe there is room to think about a system that is more proactive.

So you have a great project, tell everyone about the project, let’s have like an airdrop site where people go and engage and say ‘I’m interested in this and this and this’ and they will pay for what needs to be paid in order to get that, because they care about it. Maybe it should be a little bit more proactive but really really in the beginning and airdrop is really an essential part of how EOS business model was designed so we’ve yet to see where this thing is going.

The real issue with RAM:

“I think you should not allow stipulations in finite and required resources…if people think ‘oh there is so many developers discovering EOS and they want to move over, they’ll need to buy RAM’ — if someone predicts that and buys the RAM in advance, is actually making this future less probable. Because it makes it more expensive for everyone to do that. And the main problem is there is no price for this stipulation [other than the small fee to trade].

Liquid EOS came up with this proposal to burn EOS from that contract. Burning EOS is like airdropping EOS on all the users — economically speaking, it’s the same thing. Essentially whoever holds RAM at every given moment, is essentially paying rent for that RAM to the entire community. Which I think would make it much less appealing as an investment. And that would take the prices down. If we would have anything like that, you should expect people to make that investment because that is the right thing to do financially for them.

You shouldn’t expect anyone to care about how much RAM will cost to the application developers. That’s not his job, that’s our job to think about that.”

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