EOS Block Producers are operating with negative margins

Are EOS Block producers getting out of their jobs?

EOS Block producers are struggling with the current bear market. At the moment, it is not profitable anymore to produce new blocks for the EOS blockchain. According to a new study, one possible solution would be adjusted inflation.

The current bear market is particularly affecting those who support the networks. In the course of falling Bitcoin prices, many miners switched off their devices. It is not profitable enough anymore to mine cryptocurrencies under the current market conditions.

However, a decreasing difficulty level and new Bitcoin Mining devices helped Bitcoin miners to compensate for losses caused by the crypto crash. But with EOS, the story is different.

EOS Block Producers out of their jobs?

A recent study concluded that the mining of EOS blocks is currently no longer a profitable business. 100 percent of the surveyed block producers stated that they do no longer operate with positive margins.

According to the survey, the break-even point for block producers was an average price of $ 4 in November. At the moment of writing, EOS is being traded at $ 1,83 with a market capitalization of $ 1.66 billion. The token is the 6th biggest cryptocurrency on the market. The study also estimates the average cost per year of a Tier 1 Block Producer team at $925.625 per year.

One possible solution to these problems would be the monetization of services inside the network. This would include charging for websites, tools, ads and d’Apps. However, the block producers are concerned that this could generate negative feedback from the community.

However, as the study shows, “almost half of all Block Producers intend to monetize their services while 34% remain uncertain and 23% responded confidently that they would not monetize.”

Source: https://medium.com/@altShiftDev/survey-of-eos-block-producers-cf9677561db7

The Solution: Dynamic inflation

Since the reward for block producers is set at 1 percent, a dynamic inflation rate would be a possible idea, according to the study. It would be possible to adjust the rewards for block producers to the respective EOS price. The majority of the surveyed block producers agreed:

“73 percent of the block producers prefer dynamic inflation. And this despite knowing that they would limit their profits in bull markets. “


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