EOS RAM Allocation - Reading Assignment

Blockchain Business Course
#101

  1. The dapp stops functioning.

  2. In Dawn 3.0 token holders could only sell RAM for the price they paid, just as the other resources. In Dawn 4.0, EOS switched to a market-based allocation approach using the Bancor algorithm.

  3. The benefits are fair pricing and more effective resource utilization (in theory), reducing hoarding and optimizing price.

  4. As more dApp developers join, and more data is needed to be stored for a long time, more RAM used is extracted out of the market, making RAM more and more expensive.
    Irrational behaviour of speculators on RAM will likely push RAM prices high, making it expensive for dApp developers to buy the resources they need, and thus deteriorating the ecosystem.

1 Like
#102

  1. What would happen if a dapp runs out of RAM?
    The smart contract cannot be deployed, because some operations cannot be executed.

  2. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?
    – Dawn 3.0 : The RAM was sold at the price it was purchased
    – Dawn 4.0 : The RAM price varies according to the market. Dawn 4.0 has an algorithm called Bancor that defines the market-based allocation approach.

  3. What are the benefits of having a market-based model for RAM staking?
    – Price determined by the market
    – Better supply and demand balance of the RAM allocation
    – Decreases EOS token hoarding for RAM allocation

  4. What are the drawbacks of having a market-based model for RAM staking?
    – Encourages speculation
    – Fees to stake and unstake EOS tokens

1 Like
#103
  1. It will stop running.
  2. Under the Dawn 3.0 system contract, token holders could only sell RAM for the price they paid, just as the other resources. EOS switched to a market-based allocation approach using the Bancor algorithm from Dawn 4.0.
    3.In DAWN 3.0 there was no incentive for a staker to un-stake his RAM, while in DAWN 4.0 a staker can receive capital gain from un-staking his RAM, and therefore is willing to free the resources.
  3. RAM speculators will likely hold RAM and push RAM prices high, making it expensive for dApp developers to buy the resources they need, and thus deteriorating the ecosystem.
1 Like
#104

  1. What would happen if a dapp runs out of RAM?
    If there is insufficient RAM some operations cannot be executed and smart contracts cannot be deployed.

  2. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?
    Under the Dawn 3.0 system token holders can only sell RAM for the price they paid while in Dawn 4.0 they switched to a market based allocation approach using the Bancor algorithm.

  3. What are the benefits of having a market based model for RAM staking?
    Holders are encouraged to make capital gains when they withdraw their tokens, freeing up resources.

  4. What are the drawbacks of having a market based model for RAM staking?
    As demand increases the RAM becomes more and more expensive.

1 Like
#105

What would happen if a dapp runs out of RAM?
The Dapp would not function, some operations would break down and the smart contract cannot deploy
What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?
With Dawn 3.0 tokens would be the same value when sold as when bought, whereas Dawn 4.0 allowed for current market price for tokens when sold. This was fairer for Dapp developers perhaps whose Dapp was unsuccessful but the market price of EOS had risen since they originally purchased tokens for staking. Helping to free RAM resource as developers would previously wait for the prices to rise before selling unnecessarily holding RAM resources.

What are the benefits or having a market based model for RAM staking?
It provides more balance to the price for RAM allocation

What are the drawbacks of having a market based model for RAM staking?
As more Dapp developers join the RAM allocation would become more scarce and would result in a higher price for staking.

1 Like
#106
  1. When RAM is insufficient for a dApp, some operations are unable to carry out and smart contracts cannot be deployed.
  2. EOS switched to a market-based allocation of RAM using the Bancor algorithm from Dawn 4.0.
  3. With the market-driven model, a coder can receive capital gain from un-staking his RAM, and therefore he is willing to free resources in a timely manner.
  4. As more dApp developers join, and more data needs to be stored for a long time, more RAM is used and extracted out of the market. This process would inflate the price of RAM.
1 Like
#107

1. What would happen if a dapp runs out of RAM?
Some operations are unable to carry out and smart contracts cannot be deployed.
2. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?
In Dawn 3.0, token holders could only sell RAM for the price they paid, just as the other resources. In Dawn 4.0 they switched to the market-based allocation approach using the Bancor algorithm.
3. What are the benefits or having a market based model for RAM staking?
RAM can be more efficiently allocated.
Capital gain from un-staking.
4. What are the drawbacks of having a market based model for RAM staking?
Speculation and increasing dApp developers drive up the price for RAM.

1 Like
#108
  1. What would happen if a dapp runs out of RAM?

Some operations are unable to carry out and smart contracts cannot be deployed.

  1. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?

Token holders can only sell RAM for the price they paid, just as the other resources.

  1. What are the benefits or having a market based model for RAM staking?

Holders of RAM can receive capital gain from un-staking their RAM, and therefore wouldn’t hoard the resources.

  1. What are the drawbacks of having a market based model for RAM staking?

This may motivate speculators to try and trade and eventually push the price up for the developers.

2 Likes
#109
  1. What would happen if a dapp runs out of RAM?
    Some operations will not be carried out and smart contracts would not deploy.
  2. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?
    A switch to a market based allocation approach rather than the price paid approach.
  3. What are the benefits or having a market based model for RAM staking?
    It should provide more balance over time in terms of supply and demand of RAM allocation.
  4. What are the drawbacks of having a market based model for RAM staking?
    As more dApp developers join, and more data is needed to be stored for a long time, more RAM used is extracted out of the market, making RAM more and more expensive.
    Also
    Irrational behaviour of speculators on RAM will likely push RAM prices high, making it expensive for dApp developers to buy the resources they need, and thus deteriorating the ecosystem.
1 Like
#110
  1. It will not work anymore
  2. in Dawn 3.0 you could sell your RAM contract for the same amount you bought it. In 4.0 it was changed to an market-based approach with the bancor algorithm
  3. It gives developers an incentive to sell their RAM contracts instead of just holding them
  4. It can become expensive
1 Like
#111

1
The dapp stops running.

2
A market based (Bancor model) trading was introduced.

3
More real use of the ram

4
Speculation on the ram market

1 Like
#112
  1. When a dApp runs out of RAM, some operations cannot be carried out and smart contracts do not get deployed.
  2. Dawn 3.0 only allowed you to sell RAM at the price it was purchased at. Dawn 4.0 switched to a market-based approach which means the RAM can be sold at the EOS market-value.
  3. There is an incentive to un-stake RAM for EOS when the market-value is high and return RAM resources.
  4. As more dApp’s go into development and an increased demand for the limited supply of RAM, the price will rise. One solution is to increase the supply of RAM, but this brings about another challenge, which is that if the demand decreases, then there is an excess of unused RAM, which means the value EOS would depreciate and therefore any RAM token holders that wish to un-stake their RAM will be selling for less than they purchased it for.
1 Like
#113

  1. Certain parts of the Dapp (or the entire thing) will not work, including the use of smart contracts.

  2. “Under the Dawn 3.0 system contract, token holders can only sell RAM for the price they paid.” Under the Dawn 4.0 system contract however, EOS has switched to a market rate based approach. This means that when holders decide to sell their RAM they must do it at a floating market rate instead of the price they paid.

  3. In theory more RAM will be available because it de-incentivizes hoarding. As the price of the token increases holders of RAM will want the token instead of the RAM, since they can make money off the increasing floating market price of the token (i.e. there is arbitrage opportunity in the market).

  4. The price of RAM is speculative, and that speculation may cause holders to continue to hold because they think there will be better opportunities for arbitrage in the future. This could be especially true if there continues to be a ramp up in the amount of Dapp developers on the platform, since they will have to battle it out for scarce RAM that would theoretically drive up the price. Holders of the expensive RAM who are only waiting for their sell opportunity would in the meantime be sitting on untapped/wasted potential on the network.

1 Like
#114
  1. Certain operations may not be carried out and will not deploy Smart Contracts.
  2. It created a market driven model for RAM staking where by there would be an incentive to un-stake RAM for capital gain.
  3. It would incentivize dApp developers to free up RAM allocation.
    4 Some developers may still hold on to their stake as prices continuously increase, either due to speculation and more developers joining the EOS ecosystem and requiring resources.
1 Like
#115

A: it will stop running

A: EOS switched to a market-based allocation approach using the Bancor algorithm from Dawn 4.0

A: it has a more stable price over time with the supply and demand

A: the more storage needed for ram will go up in price

1 Like
#116
  1. What would happen if a dapp runs out of RAM?
    Their application would not work and smart contract would not process
  2. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?
    In Dawn 4.0 RAM fluctuates in price based on market supply/demand and it’s meant as a motivation to release RAM when not needed (previous version you’d hodl RAM to make money - benefit for the owner but super bad for the ecosystem)
  3. What are the benefits or having a market based model for RAM staking?
    Because it can cost actual money users are motivated to use as needed only then release it when done
  4. What are the drawbacks of having a market based model for RAM staking?
    Because of the price fluctuation you could lose some money as EOS changes in price
1 Like
#117

1- Dapp will stop running
2- Under the Dawn 3.0 system contract, token holders can only sell RAM for the price they paid, just as the other resources.
3- Ram staking is fair price and more effective resource utilization reducing hoarding and optimizing price.
4- speculators may hold RAM and push prices while making it wasted for actual dapp use.

1 Like
#118

2. What was the change between Dawn 3.0 and Dawn 4.0 in terms of the RAM market?

Yes sir, exactly, but could you please describe a little bit what’s about the Dawn 4.0 update?

If you have any doubt, please let us know so we can help you! :slight_smile:

Carlos Z.

1 Like
#119

  1. Smart Contract will not deploy as some functions will not be carried out.

  2. Switching to market based RAM pricing instead of Fixed price

  3. Less incentive to hold RAM as price to release can be profitable (making more RAM available sooner to the network)

  4. RAM price could head too high making dApps to expensive to develop and therefore deteriorate the network

1 Like
#120
  1. smart contract can not be deployed
  2. switching token holders ability to sell RAM as the market-based allocation approach using the Bancor algorithm
  3. it will attract more early adopter and the token un-staker out there to participate
  4. can affect more to the fluctuation of token capital market, as many just holding and trading RAM only without making the ecosystem larger by creating Dapps etc
1 Like