EOS Block Producer Offers Rewards For Token Holders’ Votes
Decentralization supporters within the EOS community were quite angered once more this week after one of EOS’ official Block Producers — Starteos — offered token holders financial rewards in exchange for votes.
What Is EOS?
As many already know, EOS is a blockchain-based project with a strong focus on smart contract and dApp creation. It is a relatively young coin, which was launch in 2017, although it only got its own MainNet working in June 2018. It was created by block.one, which is a startup led by Brendan Blumer and Dan Larimer.
EOS is also known for having the most successful ICO in the history of cryptocurrencies, which lasted for almost an entire year, and it raised around $4.1 billion. Its native coin is also called EOS, and it is currently the 6th largest coin by market cap.
The project uses a consensus model named DPoS, meaning that its investors get voting power, and can decide who can mine EOS blocks. In other words, the ecosystem consists of two entities — the ECAF (EOS Core Arbitration Forum), and Block Producers, who are creating blocks, just like Bitcoin miners.
EOS BPs earn different amounts of tokens, with some estimates saying that the biggest ones get around 1,000 coins per day. There are always 21 of them, and they are elected via the constant voting process. Now that we understand how the process works, let’s see what the problem is.
EOS Block Producer Tries To Buy Votes
The source of the issue is Starteos, a China-based startup that claims to have entered the blockchain industry as far back as in 2013. The company issued several large products since then, two of which — a digital wallet and a cold storage wallet — came out this year.
The company is currently EOS’ fourth-largest Block Producer, which means that it gets a big portion of the revenue. However, a little over a week ago, on November 27, they published a post on their Medium page that started the new wave of controversy. The post was titled “We Gonna Share BP Proceeds With You — This Is the Way We Warm You Up in This ‘Winter’!”, and in it, the company offered a stable and continuous EOS revenue in return for voting for the company.
All that the voters need to do is select Starteos as a proxy and pick a revenue model, which can be either stable income or random revenue. The community quickly stood against this offer, as it goes against democratic blockchain policies and decentralization itself.
The Community Reaction
As mentioned, the community was not happy with this development. Not only does it openly defy decentralization, but the BP did it without even trying to hide their intent. About a month ago, on November 8th, Starteos announced the launch of a dApp that would act like a slot machine. They stated that users can earn tokens by using this dApp and that the tokens will be coming from their EOS BP rewards. At the time, it was believed that there is no bad intention behind the project, although it came really close to offering block rewards for votes.
Soon enough, these suspicions were confirmed, as the company tried to make the same offer via Medium, this time more directly. The move quickly spread through different social networks such as Twitter, Reddit, and even YouTube. Before long, the community demanded Starteos to be removed from the ranks of BPs.
Some of the other BPs also left statements against vote buying, although they never openly mentioned Starteos. EOS New York, the eight largest EOS BP, stated that EOS lacks a document that will outline some basic system of governance. Despite the community, and at least one other BP turning against it, however — Starteos still holds a high position among the BPs.
Previous EOS Centralization Incidents
Unfortunately, this is not the first time that there were signs of centralization within EOS. Another example came only a few weeks before the latest ones, and it includes ECAF moderator reversing already confirmed transactions. The community was outraged on this occasion as well, and many started claiming that EOS is failing in its mission to remain decentralized.
Some comments on Reddit even accused EOS of raising $4 billion just to recreate the legal system that uses tokens, while it is neither immutable nor resistant to censorship.
Before that, in October 2018, Huobi and a few other major BPs were accused of mutual voting. The claims were that a Huobi spreadsheet leaked information that indicates that several nodes are intentionally voting together in order to remain in power. Interestingly enough, Starteos was mentioned as well.
Even before that, in June, another BP scandal occurred, when BPs went against ECAF decision and have frozen seven accounts believed to be connected to a phishing scam. While this was later considered to be the right call, the BPs taking matters into their own hands was still heavily criticized.
There was also an incident where suspicious ECAF orders were received, and BPs decided not to obey them as they were unsure if the orders truly came from the ECAF.
On November 1st, a blockchain testing firm called Whiteblock released results of testing EOS software. The report surprised everyone with claims that EOS is not a blockchain, but a distributed, homogeneous database management system. This was due to the fact that its transactions were supposedly not cryptographically validated.
The list goes on, and EOS has been going from one controversy to another, with more suspicion regarding the quality of the project and its decentralization rising each time when a new issue hits. While EOS is doing its best to go through this rough period and save whatever it can, many believe that a few more incidents such as these might damage project’s reputation beyond repair.
Bitcoin Technical Analysis: BTC/USD danger remains at large, $3000 eyed
- Bitcoin price on Monday nursing minor losses of some 1.4% into the second half of the day.
- Vulnerabilities continue to lurk for BTC/USD, at danger of retesting the $3000 mark to the downside, where some call it the bottom.
- Bobby Lee, forecasts $333K for Bitcoin. Saying, “If history repeats perfectly, then the current bear market for #Bitcoin would bottom out at $2,500 next month, in Jan 2019. And then the next rally would start in late 2020, peak out in Dec 2021 at $333,000, and then crash back down to $41,000 in Jan 2023.”
Spot rate: 3474.38
Relative change: -1.60%
Support 1: 3466.00, near-term ascending trend line.
Support 2: 3392.70, daily pivot point support.
Support 3: 3252.53, psychological support.
Resistance 1: 3516.95, 15-minute resistance.
Resistance 2: 3655.36, daily pivot point resistance.
Resistance 3: 3777.85, daily pivot point resistance.
BTC/USD 4-hour chart
- Price action is depressed, moving within a range-block, ahead of further potential moves to the deep south, $3K remains eyed.
Crypto market colored in red; Bitcoin languishes under $3,400
- Altcoins resumed the downside after a short-lived recovery.
- Bitcoin returned to $3,300 after an attempt to break above $3,600.
The cryptocurrency market was short-lived. Once again. Bitcoin and other major altcoins resumed the downside movement on Monday with the total capitalization of digital assets in circulation dropped below $110B, killing hopes to witness good bullish trend into the year-end. Prices bumped into resistance levels unable to instigate buying interest amid pessimistic sentiments that gripped the market.
Stephen Innes from Oanda is among those who prefer to hold off on calling the bottom on the cryptocurrency market. He believes that we still do not have a convincing use case for Bitcoin and the absence of good non-speculative reasons to buy it makes the situation worse.
“Bitcoins have gone well beyond the ridiculousness of tulip bulb mania, It’s has been a disastrous year for cryptos, and by all indication, the current bear market could go from bad to worse with no fundamental or underlying reasons to buy BTC even more so when the only support offered up is a squiggly line on an analyst chart,” he commented.
Bitcoin has lost nearly 4 % since this time on Monday to trade at $3,380 at the time of writing. The first digital coin smashed both $3,500 and $3,400 handles after a failed attempt to settle above $3,600. Lack of buying interest may increase the short-term pressure on BTC that has already lost about 84% from its all-time high of $19,000.
Ethereum, the third largest digital asset, stays under critical $100. ETH/USD is changing hands at $90.00, having lost 3.7% in the recent 24 hours. The coin’s market value is dropped at $9.4B, while the average trading volumes have settled at $1.7B, down from $2.5B at the end of the previous week. Ethereum network is getting ready for a pivotal Constantinopole update scheduled for January 2019, which puts the coin under additional pressure.
Ripple’s XRP is trading marginally above $0.30 within the strong bearish trend. The coin is 3% lower on a day-on-day basis and mostly unchanged since the beginning of Tuesday. The second largest coin with market value $12.3B is dominated by bearish sentiments of the cryptocurrency market. Irresponsive to fundamental news, the coin is likely to stay volatile.
All major altcoins out of top-20 are in red, losing from 1% to 10% as bears are back at the driving wheel.
Nouriel Roubini and Anthony Pompliano’s “Buffet Bet 2.0” feud rages in the Twitter-verse
Anthony Pompliano, a Bitcoin enthusiast and the founder of Morgan Creek digital asset recently set off a bet, now being called as the Buffet Bet 2.0, putting $1 million at stake. The bet by Pompliano is a competition between the performance of S&P 500 index and cryptocurrencies as a whole.
Roubini being himself had an opinion on this bet and bad-mouthed Pompliano and his bet, which led Pompliano to invite him to go against the bet. The feud continued as Roubini took to his Twitter saying that Pomp is “changing goal posts” and “talking books all day”.
To Roubini’s Tweet, Pompliano replied:“Talk is cheap. You taking the bet or going to Monday morning quarterback this one?
If you want to check out the index, you can see it here digitalassetindexfund.com”
On December 10, Roubini erupted the feud again when he Tweeted:“You take bets only when there is no counter-party risk, ie when the side losing the bet is still there to pay it. The loser pompous @APompliano who lost 80% for investors in his shitcoin fund is only seeking attention with his bet. His fund will be BUST/GONE well before 10 years”
Pompliano replied to him saying that Roubini was the candidate for the worst call of the decade.
Mark W. Yusko, the co-founder of Morgan Creek Digital also replied to Roubini’s above-mentioned thread saying that there was zero counter-party risk in the “Buffet Bet”.
A Twitter user Bitvillain replied to the same thread:“Sounds like an easy win for you Nouriel. I think there are plenty of good charities that you could donate your winnings to. Take the bet! Surely the odds of crypto beating the S&P 500 over 10 years is close to zero. What could possibly go wrong?”
Meanwhile, on the other side of Twitter-verse, an S&P believer, Jim O’Shaughnessy, Chairman & Chief Investment Officer, OSAM, bet against the cryptocurrencies in his tweet saying that he was up for the bet.
O’Shaughnessy in subsequent tweets said that the bet was not going to happen. He tweeted:“[email protected] won’t do it, @patrick_oshag (my son, the least-millennial millennial I have ever met) is tired of talking about crypto, so, no bet from us. Ah well…