Blockchain protocol EOS’s governance model and centralization have been at the center of controversies, since its inception. From Weiss Ratings lowering EOS’s grade over centralization issues to getting tangled in the alleged reversal of transactions and Dan Larimar’s comments when he “confirmed” that decentralization was not their topmost priority, stating “it isn’t what we’re after” in a YouTube video, the entire EOSIO team has had to face several troubles.
The latest to join the bandwagon and express concerns over the same is Co-founder of Wikipedia, Larry Sanger. He tweeted,
“We cannot continue to build dapps on EOS if the network is de facto centralized in the hands of the Chinese. I’ve been making noise internally at EP about this since I learned about it earlier this summer. Sorry, but it can’t go on much longer, as far as I’m concerned.”
Sanger’s reaction was to the Founder and Managing Partner of Blockchain Capital, Brock Pierce’s recent video in which he said that vote-buying cannot be stopped. “I don’t think there’s any way to eliminate that,” he had said.
In order to tackle this problem, a solution that he proposed was by “adding more value to other block producers, beyond just the top twenty-one.” When asked if the recently unveiled Block.one’s Voice app could be leveraged to tackle the ID issue to reduce the chances of automatic accounts being created to improve the voting system, Pierce said,
“..there’s a lot of Chinese people and there are a lot of Indian people in a world where one person one vote will have the entire network will be Indian and Chinese so I just it’s a reality of numbers right..”
Previously, Brendan Blumer, CEO of Block.one, had proposed a “one token, one vote” system, wherein a single vote has more weight than several votes.
EOS voting system
EOS uses a delegated Proof-of-Stake protocol which enables EOS token holders to vote and elect block producers. These block producers govern EOS and represent the interest of token holders. So, how did the “vote-buying” issue crop up? EOS’s governance model is not as democratic as it seems.
Not all investors who hold EOS tokens vote for Block Producers due to uncertain market conditions. Additionally, many token holders resort to storing tokens on crypto-platforms, shifting the power of voting to exchanges.
EOS network inflation drops significantly after historic vote
The EOS community recently proposed and approved a change in the protocol that significantly reduces the network’s inflation rate.
The power of true decentralization
Brendan Blumer, the co-founder and CEO of Block.one, announced that on Feb. 25 that the EOS community quietly voted to approve the reduction of the network’s inflation from 5 percent to 1 percent. The approval of this proposal caught Blumer by surprise. However, he welcomed the news by stating that it serves as proof of the high levels of decentralization of this blockchain.
“I woke up today to find that a proposal to reduce EOS network inflation from 5% to 1% had been proposed and passed by the community overnight. This speaks to the power of decentralized governance, and networks designed to operate in the best interest of their holders.”
Over the years, EOS holders have pursued the reduction of the annual inflation, but failed to gain enough supporters.
This inflation system was coded into the EOS protocol since it was launched into mainnet. The problem with it was that 4 percent of it was being accumulated in the eosio.saving account. Meanwhile, only 1 percent was distributed among Block Producers (BP) in exchange for network maintenance.
Even though the accumulated funds were supposed to be used to fund different projects that help improve the network, it had never been used due to disagreements between BPs.
Nevertheless, the approved proposal eliminated the balance in the eosio.saving account, which had an excess of 34 million EOS tokens. All tokens were burned and removed from total supply. Additionally, it reduced the annual inflation to 1 percent. All the inflation will now be shared among the BPs of the EOS network.
This event marks an important milestone for the entire EOS community since BPs were able effectively vote to reduce their own pay among other things. Blumer believes that the alignment between EOS network operators and token holders “threatens the entities that profit from controlling token holders who have no vote.”
Following the announcement, the price of EOS appears to be holding steady above the $4 support level despite the nosedive that most cryptocurrencies in the market took today. Now, it remains to be seen whether investors will prevent it from a steeper decline.
Dan Larimer of EOS.IO (EOS): VOICE to Be Fairer Than Steem (STEEM)
Daniel Larimer, CTO of the Block.one team behind EOS.IO (EOS) blockchain, decided to make things clear about the token economics of its anticipated VOICE content platform
The charismatic leaders of the Block.one and EOS.IO (EOS) blockchains are well-known as passionate polemists. Daniel Larimer has decided to prove it once again and to respond to all negativity that has been spread about the EOS-powered content distribution product, Voice.
No chance for self-voted content
First of all, Mr. Larimer dismissed concerns about the content promotion mechanism in Voice. He said that working on SteemIt (STEEM) taught him about the problems of token-weighted voting within a ‘one user-one vote’ promotion mode.
Image via EosGO
Thus, according to Mr. Larimer, the Voice system will be resistant to the ‘self-promoting’ manipulations as well as ‘organized’ voting for content that is not well ‘liked’. Moreover, the maximum quantity of ‘likes’ for certain posts will be limited to avoid such attempts.
As a result, users that collect many tokens won’t be able to get richer unless he or she has published highly valuable content. All of the strategies of ‘self-voting’ that cause widespread inflation of rewards on SteemIt will be detected and rejected by the system.
Categorization and filtering
Within the initial phases of operations, or ‘beta period’, the Voice platform will have only a couple of categories the content will be uploaded onto. In addition, Mr. Larimer has a program to revolutionize content categorization based on community-driven contribution.
The developer admitted that the current Voice filtering algorithm is derived from the Reddit Hot scheme. After further development, this will be replaced by a native one to ensure permanent rotation of content even with a small number of content producers
As previously reported by U.Today, the Voice platform received some negativity from the community once its KYC/AML-restrictions were disclosed. To meet the requirements of the U.S. SEC, the strictest financial watchdog in the world, Block.one may ask its potential users to provide a government-issued ID and proof of address.
EOS Price Analysis: EOS/USD finds support on the SMA 20 curve as bears retain control
- The Elliott Oscillator has had two green sessions following nine red sessions.
- After failing at the $4.40 resistance line, the bulls are struggling to keep the price above $4.
EOS/USD daily chart
EOS/USD has had a second bearish day in a row as the price dropped from $4.13 to $4.07 in the early hours of Tuesday. Presently, the price has found support at the SMA 20 curve. Earlier this Monday, EOS/USD failed at the $4.40 resistance line and dropped to $4.13. The MACD shows decreasing bullish momentum, while the RSI indicator is trending around the neutral territory The Elliott Oscillator has had two green sessions following nine red sessions, showing that overall market sentiment could be bullish.