Deciphering the EOS Token Sale

I have been reading and rereading the EOS FAQ, EOS Token Purchase Agreement, and EOS Sale source code to try to understand block.one's goal for the EOS token sale. It seems Byzantine and obfuscated, but I may have figured it out.

The token sale is structured over a year to raise awareness, promote fairness, and provide an equal opportunity for all sale participants. The sale is offered on the Ethereum blockchain. During the sale, participants can buy, sell, and trade their EOS tokens. However, at the end of the sale, all tokens will be locked down on the Ethereum blockchain and can no longer be bought sold or traded.

In fact, over and over again throughout all of the EOS documentation it is stated that EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.

So, if they have no use or value, and cannot be bought or sold or traded, why would anyone buy them?

The first hint I had was from Exhibit A of the EOS Token Purchase Agreement (https://eos.io/documents/block.one%20-%20EOS%20Token%20Purchase%20Agreement%20-%20September%204,%202017.pdf):

"If an EOS Platform adopting the EOS.IO Software is launched, the default EOS.IO Software configuration developed by block.one will lock new founders tokens distributed pursuant to such EOS Platform in a smart contract and release 10,000,000 (10%) of such tokens to block.one at the end of each one year anniversary of the genesis block over a period of 10 years. The EOS.IO Software configuration of the EOS Platform will be ultimately determined by a third party who initializes a genesis block and starts the EOS Platform."

My reading of this is that:

There is a default configuration file for the EOS software that has been set up by block.one.

If you use the EOS software as is, out of the box, the default settings are to create 100,000,000 founders tokens at start-up and allocate them to block.one in 10,000,000 token chunks over 10 years. This mirrors the 100,000,000 EOS tokens that were reserved for block.one as part of the EOS token sale. I think the idea is that they would like every EOS software user to set up their own blockchains to match the token allocation from the ICO, and send all the ICO participants matching tokens on any new blockchain. A kind of software license fee, if you will.

However, new EOS software users can set up their own configuration file and ignore the defaults and give block.one and the token sale participants nothing. No harm, no foul.

But if you look at section 7.16 of the Purchase Agreement, it says

"7.16 Software is built such that any blockchain that adopts the EOS.IO Software will require approval of holders of not less than 15% of the total issued and outstanding EOS Tokens before tokens on such blockchain (the “Blockchain Tokens”) can be transferred. In other words, if the EOS.IO Software is adopted, it will be the responsibility of holders holding at least 15% of the issued and outstanding EOS Tokens to adopt one or more blockchains in order for Blockchain Tokens received on such blockchains to be transferrable."

That is, anyone wanting to run a new EOS blockchain will need approval of 15% of the sale participants to use EOS, or their blockchain just won't run. So maybe block.one hopes this is enough of a motivator to encourage anyone using their software to reward all the EOS token sales participants with matching tokens. A way of buying votes, if you will.

Finally, a good reason to participate in the EOS token sale, free tokens on new blockchains. Although the EOS tokens are worthless and frozen, anyone wanting to use the EOS software is encouraged to pay a tribute to the people who developed the amazing EOS software and who participated in the token sale, to help ensure they can use EOS software.

Further hints that this may be their model com from section 7.12 of the Purchase Agreement:

"7.12. Failure to Map a Public Key to Buyer’s Account. Failure of Buyer to map a public key to Buyer’s account may result in third parties being unable to recognize Buyer’s EOS Token balance on the Ethereum blockchain when and if they configure the initial balances of a new blockchain based upon the EOS.IO Software of which Company makes no representation or guarantee."

This says that if you don't register your EOS tokens when you buy them, when people set up their own EOS blockchains they won't be able to read how many tokens you bought. And it then suggests that EOS software users are encouraged to set up their initial blockchain balances to mirror the people and allocations of the ICO participants.

So, my reading is that, if I use EOS software to create my own blockchain, block.one would like me to look at the EOS token sales participants and their balances and initialize my blockchain to match them. They would like me to send the sale participants an equal number of my new tokens as their purchases. Or maybe, they won't let me run my blockchain.