Soaring 50% in four hours yesterday, what happened to EOS RAM?
Soaring 50% in four hours yesterday, what happened to EOS RAM?
In the world of EOS, CPU and network bandwidth are mortgaged, while the RAM is adjusted to market prices automatically .
Take one of my EOS accounts as an example, as shown in the figure: CPU and network bandwidth (Bandwidth in the figure) are calculated by EOS, both 0.1EOS; Memory (equivalent to RAM) is shown through its actual storage (3.50KB) rather than EOS.
In Dawn3.0, RAM can only be sold at the purchased price, which can reduce hoarding and speculation. But its disadvantages are also obvious. For those who bought many RAM early, they have no motive to sell RAM to others even if there is a scarcity of RAM.
In Dawn4.0, RAM is adjusted to market prices and the market, like an invisible hand, can balance its supply and demand. To be more specific, with Bancor algorithm, the system contract will price RAM according to the market demand and supply. When RAM is scarce, its price will naturally rise, prompting RAM holders to sell out of benefits.
It makes more reasonable configuration of RAM when its price is determined by both demand and supply party. However, this also leads to a problem that its price may experience sharp ups and downs.
In order to curb frequent speculations, EOS had a clever idea-RAM could not be transferred and charged a transaction fee of 1%.
About this, BM had already had a plan. It suggested the supply of BAM be limited, initially offering only 32GB, and then increasingly growing to 1TB.
Increasing supply will make a rapid fall of RAM’s price. More complex the actual situation may be, fluctuating price of RAM is inevitable. Therefore, the timing of BAM buying is hard to make sure, and one way is to buy a small amount of bids frequently.
The Price of RAM
After talking about the conception of RAM in EOS, let us have a look at the price of RAM.
Through the website https://www.elinfor.com/pricecenter we can see that in the past three days, the price tendency of RAM fluctuates greatly. There is a 130% increase from low to high.
As shown by the red arrow in the above picture,from 18:00 to 22:00 yesterday evening, in just 4 hours, RAM’s price rose from 0.0341 to 0.0522, an increase of 50%. But half an hour later, it plunged 26%, seeing the great fluctuation.
Risk Warning
Although the RAM of EOS has actual application scenarios, its supply will increase from 32GB to 1TB slowly, with the capacity increased by 32 times. So if RAM’s supply is increasing without the support from the application group of Dapp’s buying RAM for developing, its price is more likely to reduce in the long run.
Market can be a test for humanity. If someone hoarded a great number of RAM in early days, and then releases the news that RAM is profitable. What he expects is that someone can take over so that he can leave the market with benefits.