Changes Are Coming
Full disclosure, I have been trading RAM since the service started, and have made a profit from doing so. Recently, it has not been as easy as others may have you believe, the crazy roller coaster ride the price takes in a short amount of time is ridiculous. Unless you have a script running to monitor the price and also make trades for you based on metrics gathered, or have the time to monitor activity yourself, you are walking a tightrope.
When trading opened a few weeks back, you could buy a big chunk of RAM, walk away for a good few days and watch your ROI grow, but already it seems those days are already behind us. The amount of trading that has taken place is exorbitant as many EOS owners jumped on the bandwagon trying to increase their stake size, and why not? Currently, RAM trading is a legitimate practice backed by the creators of EOS.
To give some perspective, the fee to trade RAM is 0.5% for a buy and 0.5% for a sell so a total of 1%, charged in EOS for a round trip trade. That fee goes into an account called 'eosio.ramfee,' and at the time of writing this, the balance is 748,963.9429 EOS, that is a huge figure given the time frame trading has been going on. You can check out the current total by click here.
So what changed? The EOS community has kicked up a stink about the cost of RAM as they feel it hurts many aspects of the ecosystem from the average user too dApp developers and all the way to the block producers, active and standby. At first Block One stood their ground justifying their reasoning to all who questioned them on various social media platforms. It was not until the TMLG call held on Monday, July 2nd that saw a chink in the defense. BANCOR, where also on the call and voiced their concerns regarding the situation and even post an article with their thoughts that can found here.
Dan Larimer joined the call generally reserved for block producers to discuss pressing issues that needed review and or planning, but RAM allocation and utilization, aka RAM trading, was added to the agenda last minute. When I first watched the recorded meeting, I mistook Dan's uncomfortable body language for something other than fear of being wrong, but it seems I may have been incorrect. Block One has performed a U-turn on their stance and is now working on various methods to tackle the rising price of RAM. Block One considering these changes emphasizes the statement that EOS is a community owned and steered by the masses and not a single entity that decides what is best for us.
Dan published a post on the medium platform today ( July 4th ), where he details the plans that Block One are looking into, the article can be found here. The three solutions that Block One are proposing are
- Bancor relay volatility value adjustment.
- Bringing Down Costs by Scaling.
- Virtual Memory (Paging using SSD drives)
- Transparency in RAM Market
If these changes get implemented, it will entirely settle down the volatility currently plaguing the RAM market. I will still participate, but I will now switch my tactics to a long-term strategy rather than the short-term daily monitoring that was needed to survive. Shifting gears like this should lower my heart rate considerably and let me sleep a little better, I should have spent more time working on the trading bot.
Right now, the price of RAM has dropped massively from a high of 0.92 per kilobyte to the current value of 0.32. Maybe it is related to the news I have mentioned above, or maybe the US traders have taken a day off due to July 4th celebrations. We shall see over the next few days.
Final Thoughts
Dan's summary says it best with it comes to the use of RAM within the EOS ecosystem.
RAM is meant to be used for developers who want to build real things to make everyone’s lives better. The free market and blockchain communities will adopt a combination of approaches to reduce the total cost of deploying and using large-scale decentralized applications. RAM is not designed to be artificially scarce the entire market is working on ways to increase both RAM and TPS over time.