Understanding the value of TLOS
The TLOS token was created in 2018 when the network genesis snapshot was taken. The Genesis snapshot is derived from the EOS network, with accounts capped at 40,000 TLOS. This was done to curb the potential of “whale investors” and keep ownership fairly distributed. This also means that there are no heavily vested VCs or team funds who’s tokens will unlock at specific intervals.
Total Supply: 420M
Circulating Supply: 353,503,151 (as of August 2023)
Rough Staking Rate: 8-10% - 1,200,000 TLOS allocated / month
Rough Release Rate: 4.8M/ Monthly (~16-17% supply release per year)
In 2021, the Telos Network proposed a scalable validator pay model to ensure a more sustainable and equitable reward system for its validators.
By focusing on actual block production, the model aims to incentivize genuine network participation and minimize passive freeloading. This approach balances a guaranteed base pay for all validators with additional rewards for active contributions, fostering a secure and participative Telos ecosystem.
As the TLOS price increases over time, the release rate mechanism will consequently decrease due to the Sustainable Pay Model.
TEDP4, or the Telos Economic Development Plan Phase 4, was a strategic shift in Telos' economic approach, focusing on enhanced utility and bolstered value for the network. This plan set a new direction for the network towards increasing the utility of the TLOS token via an evolution of the Native network into a Layer Zero with the potential for horizontal scaling and bespoke networks and unlimited use-cases. The overarching goal of TEDP4 is to align with community interests, bolstering the sustainability, growth, and stability of Telos' economic ecosystem.
Learn MoreTLOS, the native network token is useful in a plethora of ways, including governance, ownership and use of Telos network resources, staking rewards, and as a means for payment for telos based apps, services and more.
Governance: In the Telos DPoS system, TLOS holders can vote for validators and proposals, allowing them to influence network decisions and direction. This democratic approach ensures broad participation and alignment with community interests.
Resource Allocation: In order for DApp developers or users to unlock bandwidth within Telos Zero, the TLOS tokens can be staked to access network resources, including CPU, NET, and RAM.
Reward Distribution for validators: TLOS is used to reward validators and other network participants. The tokenomics has been designed to incentivize positive contributions to the network's growth and security.
Staking in the Resource Exchange (REX): The Telos Resource Exchange (REX) allows holders of TLOS to lease their unused resources to developers, in exchange for high yielding rewards.
Gas Fees: Just like how ETH is used on the Ethereum network as the gas token, TLOS is used to pay for transaction and smart contract execution fees on the Telos EVM.
Liquid Staking: When you stake your TLOS on an EVM application, you will receive sTLOS as the rewards. sTLOS gives you the flexibility to further participate in other DeFi applications without having to unstake your original TLOS.
Network launched in 2018
Grassroots project with No ICO/VC Funding
Delegated Proof of Stake Network
Total supply: ~420 million TLOS
Circulating Supply: 268 million + TLOS
Circulating Supply increases by < 4,100,000 TLOS/month
Strong utility in resource ownership, governance and financial use case
Reserves fund operations of various parties integral to network growth
TLOS powers the entire Telos blockchain as decided on by community members
REX offers high APY rewards for staking TLOS
Accessible resources are provided for new developers
TLOS has a current total supply of TLOS at 420 million. This means there are far less tokens available (supply) when compared to other blockchains.
The current rate of inflation to total supply is 0%, which could rise to 1% in the future to account for payments to block producers. Currently, block producers and other important entities are paid by the network's reserve funds, as voted on by token holders.
The TLOS token was created in 2018 when the network genesis snapshot was taken. The genesis snapshot derived from the EOS network, with accounts capped at 40,000 TLOS. This was done to curb the potential of “whale investors” and keep ownership fairly distributed.
330,753,222 TLOS total were created in this initial snapshot. 12 million of these initial tokens were distributed to the Telos Founders Rewards Pool and Telos Foundation. This allowed the network to launch in a grassroots fashion, without any ICO or Venture Capital funding. This is a rarity in many modern blockchains, but a necessity for DPoS networks to be truly decentralized.
Initially the network paid Block Producers through inflation of supply. However, this was halted in the summer of 2019, when the Telos Economic Development Plan 1.0 (TEDP1) was passed.
With TEDP1 the community decided to halt TLOS supply inflation, capping the total supply at 355,208,370.6674 TLOS. Instead of creating new tokens, the community agreed to pay for network operations through the Exchange Token Reserve Fund (exrsrv.tf). These tokens were created for exchanges to retrieve on behalf of their customers, but never claimed.
Eventually, when funds are exhausted from the Exchange Token Reserve Fund, the network will be funded by the TLOSrecovery account. These are funds created for possible account holders that were also never claimed.
There is enough funding in these reserves to last until 2024 at the current payout rate. However, the funds are expected to last much longer through tokenomic amendments which can be enacted by the community.
Because the network is funded by reserves, the circulating supply increases overtime but the amount of TLOS in existence does not. Once all reserves are exhausted, the community may decide to introduce inflation of supply at a low rate that is beneficial to everyone. Alternatively, the network may be funded by charging for certain premium services. All of this is in the hands of the stakeholders, in a truly decentralized way.
The TLOS Reserves offer funding to several accounts on a regular basis, as decided upon by stakeholders. These accounts and their purposes are as follows:
Validators, also known as Block Producers, are the ones maintaining the Telos network’s ledger and validating the transactions as they come in. Anyone can set up a validating node, but only the top 42 block producers voted by the stakeholder community, receive payment along with a responsibility for performing active network operations.
The top 42 validators consist of 21 “active” validators, handling most of the transactions, and a cohort of 21 “standby” producers that are regularly tested to serve as a back-up. Elections are tallied approximately every 2.5 minutes, meaning that the rankings of Validators can change at any time.
A maximum of 896,427 TLOS a month is distributed towards the validators. Active validators can receive a maximum of 28,000 TLOS every month, while standby block producers receive half of that, during that same time period. The latest TBNOA change that passed, regarding the network validators' pay, can be found here, an elaborate explanation of the same can be read here.
The economic development fund is utilized to pay for expenses that are determined by the Block Producers to be beneficial for the network. Budgeting decisions are decided upon via a majority multisig vote of active BPs, provided that the total amount of funds disbursed does not exceed 152,892 TLOS per month.
The Telos Foundation is an apolitical organization with a mission to aid in the promotion and improvement of the Telos Network. The initial mandate states that this is to be executed by promoting the network through grants and administration, underwriting expenses that increase the functionality of the Telos network and maintaining a published guidance price for Telos Network RAM. Any decisions that the Telos Foundation make are agnostic to network operations and governance systems.
Budgeting decisions for the Telos foundation are determined via multisig by the Telos Foundation board members. Board members are voted in by TLOS holders as representatives of the community through regular elections.
The Telos Core Developers exist to push development of the Telos network forward from a technical standpoint. They are a key player in maintenance and innovation of the Telos ecosystem and its tools. Additionally, the Core Developers usually play a role in facilitating governance on the technical front. Use of these funds are controlled by the heads of this initiative, which are decided upon by community vote during economic amendments.
The Telos Resource Exchange (REX) plays an integral role in making the Telos network one of the most accessible and equitable blockchains. It allows developers to lease TLOS in order to pay for network resources at an affordable rate. At the same time, TLOS holders loaning these resources will receive a high yielding return, paid out by REX funding.
It’s possible to utilize Telos outside of the Telos native mainnet, through ERC-20 and BEP-20 versions of TLOS. ERC-20 TLOS is available on the Ethereum mainnet and BEP-20 TLOS is available on Binance Smart Chain (BSC).
This is made possible through bridges opened between Telos and these other networks in 2021, via pTokens. These are wrapped versions of TLOS which can be transferred in and out of the Telos native mainnet at any time. Doing so does not create additional tokens, and it's important to note that any TLOS existing on Ethereum or BSC are included in the total supply of 355 million TLOS.
TLOS, the native network token is useful in a plethora of ways, including governance, ownership and use of Telos network resources, staking rewards, and as a means for payment for telos based apps, services and more.
At its heart, TLOS represents ownership of network resources. Developers and users can stake TLOS in the network to gain access to resources necessary for processing transactions. The number of resources received is quantified by the percentage of TLOS an account stakes. This is relative to the amount of TLOS in existence. For example, if a user owned and staked 1% of the TLOS supply, they could access 1% of the network’s resources.
In this way, owning TLOS is a lot like owning the deed to a plot of land, which increases in value as the demand for real estate increases. This potential perceived value of TLOS is higher than many other blockchains, due to powerful nature of the network and limited supply of TLOS.
An everyday user will require very little resources to carry out simple tasks like buying and sending tokens. So, minimal TLOS needs to be staked in these use cases, keeping standard transactions virtually feeless. However, applications and organizations will require greater resources to build the complicated infrastructure that powers their ecosystems.
One additional advantage to Telos, over other blockchains, is the ability for developers to stake resources for their users. Utilizing this, developers can create applications with a simple user experience and no fees or extra hassle for their customers. This increases the potential for adoption of blockchain technology by every possible industry.
The second primary utility of TLOS is as a governance token. The Telos Decide governance engine is a powerful tool that sets Telos apart from other blockchains.
Whether it’s voting on validators, legislation amendments or grant proposals, governance is a massive part of the Telos blockchain. On Telos, virtually any aspect of network operations can be modified through popular vote, something not possible on other major blockchains.
Anybody holding TLOS can submit or vote on a proposal. This ensures that the direction of the chain fairly represents the community’s best interest and that its resources are used in a way that the majority of stakeholders agree on. TLOS must also be paid to submit a proposal, adding to the utility of the token even further.
Strong, equitable governance is something that other networks have always lacked, resulting in forks. Telos’ governance keeps it nimble in operation and drastically reduces this risk to investors and users.
The Telos Resource Exchange (REX) allows holders of TLOS to lease their unused resources to developers, in exchange for high yielding rewards. These rewards are paid to REX from the Exchange Token Reserve Fund.
Rewards being paid from the reserve keeps the cost of renting these resources cheap for developers, while still giving the lessor a fair return for their loan. This sets Telos apart from many other blockchains as it is extremely accessible to build on.
TLOS maintains further utility in the countless ways that it powers other services built on the network. Many applications use Telos as a primary method for payment, which is strengthened by the addition of other Telos DeFi tools such as T-Bonds, T-Swaps or T-Starter.
dStor is another example of an application that adds utility to the TLOS token, outside of its initial intended use cases. dStor is a revolutionary, decentralized storage solution, created by GoodBlock. Even though the storage system is its own separate network, node operators are paid with the TLOS token and these financial transactions happen on the Telos network.
These are just a few of the many additional use cases for Telos, created by additional initiatives within the Telos ecosystem.
As previously explained, all network initiatives are funded with the TLOS token, including the Telos Foundation, Block Producers (Validators), REX, Telos Core Devs, Economic Development Fund and Worker Proposal System. Because of this, TLOS is the funding vehicle that powers every aspect of Telos.
When you pair this with governance, you have a token that is extremely unique. Holding TLOS allows you to take part in democratic decisions surrounding how the remaining resources are utilized.
With this in mind, the true utility of TLOS is that it empowers the network to continue evolving, as it sustains itself in a way that mutually benefits all network users and token holders.