Just two weeks before the EOS main online line, the first red-hot product came out of the EOS system itself, the recent hot EOS RAM trading system.
The chart below shows the price per kilobyte of EOS RAM. As you can see, in just one week, the price of EOS RAM has risen from 0.017EOS/KB on June 26 to the highest point on July 3. 0.935EOS/KB, the highest increase is up to 55 times.
Seeing the fiery degree of EOS RAM trading, some exchanges couldn't sit still. ZB.COM and OTCBTC.COM launched the EOS RAM/EOS trading pair on July 3, trying to share a piece of it. However, most EOS RAM investors identified this as a false transaction within the exchange, forced by public opinion pressure ZB.COM to remove the transaction pair.
As the current digital currency wallet boss imtoken on the market on July 3 also announced the upgrade of software to support EOS RAM transactions. Previously, other digital asset wallets, such as TokenPocket, Wheat Wallet, and HaloWallet, which attracted users early, began to lay out EOS, an emerging asset, and acquired a large number of users in a short period of time.
So what exactly is EOS RAM, and why can it quickly gather the attention of the market in a short time? Before answering this question, you need to understand several resources in the EOS system.
EOS is essentially two different blockchain projects and Ethereum. If you use analogy, EOS is actually more similar to a distributed computer network operating system. This operating system belongs to the underlying software infrastructure and a large number of Dapp projects. Both can run on this operating system.
And we know that under the operating system, the lower level is the hardware infrastructure, which involves CPU, network, memory, storage, etc. They are all limited resources. Since the system resources are limited, the allocation of resources is required. Due to the different characteristics of different resources, the distribution system is different.
We can compare the EOS operating system with the operating system of our mobile phone (such as IOS or Android).
When we use mobile phones for WeChat chat, the above four resources (CPU computing, network, RAM, storage) will be used, but the difference is that once we turn off WeChat, the use of CPU and network is interrupted. , and chat records, pictures and other information will be temporarily stored in RAM in the form of a cache, that is, in memory. (EOS storage mechanism may adopt IPFS protocol)
The problem arises. The difference between the CPU and the network and the RAM (depending on whether it is used or not) must involve different allocation systems. In the EOS system, the right to use the CPU and the network is pledge EOS. According to the ratio of the number of pledge EOS to the total EOS pledge of the whole network, the corresponding proportion of the right to use is obtained. Once you do not use it, you can redeem all of you. EOS. The RAM allocation system uses the Bancor algorithm.
The Bancor algorithm is a set of human-machine trading mechanism, which is an algorithm that is only available after the super node upgrades the EOS DAWN 4.0 system. In the EOS DAWN 3.0 era, the EOS RAM was bought and sold using the “original price to buy the original price” approach, but this would create a problem, that is, once the EOS RAM is bought, the first buyer does not need to use so much RAM resources. He also has no incentive to sell it back to the market.
In order to ensure the balance of supply and demand in the market, it is necessary to reform the EOS RAM allocation mechanism, and thus BM introduced the Bancor algorithm.
So how does the Bancor algorithm implement the trading process? After the EOS Creation Block was created, in addition to simultaneously mapping the EOS token holder's account, some system built-in accounts were also generated, and eosio.ram was one of them.
EOS RAM buy-in process, EOS holders only need to send a certain amount of EOS to the account of eosio.ram, the EOS system will receive the total number of EOSs received by the eosio.ram account based on the number of EOSs you send to eosio.ram. The three parameters of the remaining RAM of the EOS system calculate the amount of RAM you should obtain. After deducting the 1% handling fee, the RAM is allocated to the EOS holder.
The EOS RAM sell process is the opposite of the buy process, and the sale process is also deducted 1% of the fee.
In short, the less RAM remaining, the higher the price; the more RAM there is, the lower the price.
In order to ensure market liquidity, traditional financial markets will create some financial derivatives. The advantage of Bancor algorithm is that the market supply and demand are automatically adjusted. It does not depend on liquidity, and all operations of all accounts are transparent. Any operation of large accounts is in retail. Under the eyelids, any buy-and-sell price is predictable and is calculated by the system, almost completely avoiding the possibility of the dealer's control.
It stands to reason that Bancor's algorithm is theoretically perfect, but because the algorithm calculation formula itself has some leveraged nature (RAM price increases with the approximate number of RAM in the system), it is brought in the early days of EOS market development. problem.
As can be seen from the previous picture, the price of EOS RAM has quadrupled on July 3, but then, the market has turned sharply because the acceleration of new funds is less than the withdrawal of old funds. For EOS, the price of EOS RAM can only support the current price when the ecology is very prosperous, not to mention the current role of EOS is only reflected in the account free transfer.
The impact of the blindly high EOS RAM price on the EOS ecosystem is self-evident. Retailers who do not need RAM occupy a large amount of RAM, and developers can only retreat in the face of high development costs. But for now, the speculation in the market is declining.
So, as a core developer of EOS, what does BM think about this problem?
When someone asked the BM in the telegram what the EOS RAM price would reach, BM's unceremonious reply "Ask your mom", obviously BM's position is not to interfere in the market, but when someone asks BM what is the price? At the time, BM's reply was not to think that the price was very high (RAM price was 0.2EOS/KB), so there is speculation that BM's move intentionally pushed up the price of EOS RAM, which forced developers to develop sidechains to achieve The goal of "Million TPS".
So what do super nodes think about this? Based on the fact that the current super node meeting did not put the expansion issue into place, the nodes have a negative attitude toward the expansion. But in fact, we can understand, after all, the current EOS RAM is in the hype, and not much is actually used in the Dapp ecology, expansion is only a temporary solution, right?
Here also write about the EOS RAM market outlook. At present, the price of EOS RAM has dropped from the highest point to around 0.3eos/kb, and the used amount has dropped from the highest 85% to about 80%. This is still a relatively high value. The reason is also mentioned earlier, that is, the current EOS. Ecology does not need to use so much RAM resources for the time being. If it is a long-term investment in RAM, it should consider the impact of subsequent expansion and other proposals, and then make judgments.
In the short-term, the recent big exchanges have launched the EOS withdrawal function. At present, there are about 4.8 million EOS in the eosio.ram account, and then 300 million EOS has been pledged for voting. The remaining 700 million “free body” EOS is on the market. On the flow, the ram fund pool occupies about 0.6% of the mobile EOS, which is not high in percentage. However, after entering July, the market is warming up, and the funds originally on the exchange may not be willing to transfer.
The Bancor algorithm used by the EOSRAM allocation mechanism actually provides more ideas for the latecomers. People are worried that the centralized exchanges are opaque and the market is heavily manipulated. Therefore, the direction of the exchange has shifted to the decentralized exchange, but the current decentralized exchanges are inefficient and inferior, and no one is willing to use them.
Why can't I introduce the Bancor mechanism to the secondary market? Even the ICO of the primary market can be introduced. Perhaps EOS's first detonating product would be an application using the Bancor algorithm.