EOS may turn to a DAO-like model to fund ecosystem development

The EOS Worker Proposal funding system is a mechanism that will allow developers to receive funding from the EOS blockchain. 
The proposal has received criticism from the company that created the EOSIO protocol used by EOS, Block.one and its creator Brendan Blumer. 

A new funding mechanism for EOS has been presented by two block producers. Attic Labs and EOS Nation published details of the EOS Worker Proposal System (EWS). The proposal is designed to allow developers to obtain funding for their projects from the EOS blockchain.

The proposal allows all EOS holders to submit a budget for their projects. After that, the project is evaluated and voted by the block producers chosen by the token holders. When a proposal is approved, the developer receives the funds in their EOS account from eosio.wps.

The eosio.wps account receives its funds from the fees accumulated in the eosio.name and eosio.ramfee accounts. These accounts have an estimated amount of 3.5 million EOS. The funds were collected by “EOS first-class name auctions and RAM purchase fees”. The funds have no inflation or taxes, as they were collected from services provided by the network to specific individuals.

According to Attic Labs and EOS Nation, the EWS has been modeled on the DASH Budget Proposal System. EOS block producers consider the DASH funding mechanism to be successful and sustainable. In addition, the creators of EWS state:

We’ve analyzed real node, developer, and token holder behaviour in both these systems over an extended period of time in order to design an improved version for the EOS Mainnet.

The EWS will have 50,000,000 EOS to be allocated within 30 days to the proposed projects. The period and time of designation of funds can be changed by MSIG approval of 15 of the 21 main EOS block producers. Main Block Producers may also choose to disable the EWS by no longer providing funding:

We’ll propose to transfer 50,000 EOS, or two periods worth, to the eosio.wps account upon activation of the EOS WPS system. We’ll propose a top-up of another 25,000 EOS one month ahead of each period. This gives the top 21 the flexibility to discontinue the WPS system at any time by simply not funding it.

Developers and their proposals must meet certain criteria in order to be evaluated and approved. Firstly, developers must pay a fee of 100 EOS to enter their projects into the EWS. In addition, proposals must have a minimum of 2 net positive votes from valid voters. The features and functionality described for the EWS are similar in a Decentralized Autonomous Organization (DAO). As with the EWS, the DAO system also relies on the vote of the token holders to approve decisions executed through a smart contract.

Critics from the company that created EOS protocol

Brendan Blumer CEO of Block.one, the software company that created the EOSIO protocol used by EOS, has expressed criticism of the EWS. While praising the effort and contribution of EOS Nation and Attic Lab to the EOS ecosystem, Blumer says on Twitter:

I am personally concerned of the effects the recently proposed EOS Worker Proposal System may have on the network.

Blumer argues that the mechanism for approving funds does not have an effective method for measuring project risks. Blumer also stated that the EWS may be susceptible to external scrutiny and corruption. The CEO of Block.one said that the EWS could alienate the EOS from the blockchain community by increasing the risk of the network:

I believe without sustainability, enforcement capability, and measurable returns, they have a bad prognosis.

In the following video you can learn more about the EOS Worker Proposal System:

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