EOS as a Frontier — our Constitution/User Agreement debates.
Frontiers
EOS is like a frontier, defined by many of the same ideals and realities that defined the great geographic frontiers of history. Historic frontiers include:
- the pioneer culture of the American West until the late 19th century
- the classical era of Piracy after privateers were relieved of military duty (1714)
- Kozak (derived from the Turkic — kazak: free man) culture on the Eurasian Steppe especially during its early centuries
These and other frontiers have many things in common:
- They are places of freedom and innovation.
- They are enormously inspirational alternatives to the social orders which surround them which are regarded as oppressive.
- Their freedoms attract illicit activity.
- Their symbols and stories become enshrined in folklore and inspire generations of people, long after the frontiers have closed.
- They are watched by surrounding powers who develop strategies for co-opting or managing them, but who initially consider it impractical.
- Frontiers eventually struggle to maintain their status. They are either co-opted by surrounding powers, or formalize themselves and their relations with surrounding powers.
EOS seems to exhibit most of these characteristics.
EOS Governance So Far
EOS launched with a Constitution whose legitimacy was in questions. Parts of the community assumed it was the law, and other parts scoffed it.
The idea that Block Producers were neutral utilities, executing the orders of blockchain governance seemed popular.
BP Behavior
Almost immediately, some block producers explicitly violated the launch Constitution by publicly advertising direct compensation to their supporters in exchange for votes. Later there were violations that included non-disclosure of beneficiary owners which seemed to mask a lack of BP independence, ie. certain parties owned more than one BP. Outside of community voting, there has been no way of suppressing these violations.
ECAF
The launched Constitution enshrined ECAF as the default arbitration forum. Black listing accounts suspected of theft. Block Producers were willing to update their black lists, with some controversy. Block Producers resistance to ECAF increased significantly when orders required them to change private keys and without detailed explanations.
A referendum to delete ECAF is currently the second most voted on referendum on EOS with 2.14% of the vote, and 99% of 22 million votes being in favor of deletion.
Referenda
The referenda system began working in January. The launched Constitution specified the criteria for passing a referendum:
Article XI — Amending — This Constitution and its subordinate documents shall not be amended except by a vote of the token holders with no less than 15% vote participation among tokens and no fewer than 10% more Yes than No votes, sustained for 30 continuous days within a 120 day period. [emphasis added]
As of this writing, the most popular referendum has only a 2.32% turnout.
There have been three interpretations of the EOS Community’s referendum problem:
- It doesn’t matter because the Constitution was never legitimate.
- Since referendums don’t meet the 15% threshold, we should use the default functionality of the software, which is to rely on the actions of 15/21 Block Producers.
- We should alter the referendum system to allow it to reach a quorum.
Another problem with the referendum system design is that NO votes get counted into the quorum. So by voting “no”, someone who disagrees with a referendum can inadvertently cause it to pass the threshold for acceptance. A more sensible approach seems to be to only count “yes” votes into the quorum.
The EUA preserves the Frontier
The EOS User Agreement makes the defacto control of EOSIO official. It is close to what Dan Larimer proposed in his Constitution 2.0 in June — “the code is the law”.
There is no mention of arbitration in the EUA.
Link to the EUA.
Some community members have stated that it can be made even shorter by simply stating “EOS Governance = 15/21 BPs”. Notably, Dan Larimer complimented the EUA.
The Referendum System is relegated to an informal roll with this article:
Article IV — Governing Documents
Any modifications to the EUA and governing documents may be made by eosio.prods. It is admonished that a statement be crafted and issued through eosio.prods via eosio.forum referendum contract describing such a modification in advance.
The one departure in the EUA from “the code is the law” seems to be this article:
Article II — Special User Types — Users who call regproducer agree to, and are bound by, the regproducerRicardian Contract.
which does not specify the mechanism through which such users (ie. block producers) will be bound.
Here is the current regproducer agreement. It mandates that BPs collecting compensation run public endpoints, and that places requirements on disclosure of beneficial owners. Both of these are currently being violated by many BPs.
About account recovery, the UA says this:
If User loses access to their EOS account on chain_id and has not taken appropriate measures to secure access to their EOS account by other means, the User acknowledges and agrees that that EOS account will become inaccessible.
Though presumably, since the code is the law, if a user or group of users convinced 15/21 BPs to recover their accounts, there is no violation of UA.
Critics of the UA say that it is too light and exposes BPs to liability. In the language of a frontier — it does not sufficiently formalize relations with surrounding powers.
The ECC attempts to Formalize Relationships
The ECC’s authors argue that having official base-layer dispute resolution will bind governments by the 1958 New York Convention (officially the “Convention on the Recognition and Enforcement of Foreign Arbitral Awards”), and protect BPs from liability.
The ECC does not contain any details of how it will be implemented, but provides this guideline to the community:
12.3 The community shall determine an ADR system which allows for the participation of one or more ADR providers based on their registration with EOS and further on quality and procedural requirements . . .
It creates explicit restrictions on Block Producers, similar to the Launch Constitution:
7.3 Block producers shall not share control with other block producers, whether through ownership, agreement or orchestrated behaviour. Block producers shall publish a comprehensive schedule of their group and a list of ultimate beneficiaries with an interest of 10% or more⁹
and specifies that the as-yet-unnamed Alternative Dispute Resolution forum will be used to resolve BP violations.
They also attempt to maintain sovereignty:
15.1 As far as that is possible, this constitution supersedes all national laws²⁰.
20. National laws will apply to this constitution. The stipulations herein will supersede those laws generally speaking. However, national laws may have mandatory provisions one cannot deviate from. For now, we are not familiar with specific rules of a specific country that might interfere with this constitution but we have no in depth knowledge (and often even no knowledge at all) of all the legal systems.
7.10 Block producers can decide independently whether or not they follow outside demands. Of course in principle the code must be executed. However, we believe if an outside court should subpoena a block producer to block an account, the choice whether or not to do that is up to the block producer.
Critics of the ECC say that it is too long and detailed, and repeats the failures of ECAF by insisting on unenforceable rules and authorities whose legitimacy is not universally recognized.
CryptoLions Position
Side Chains are the Future and Clarity is most important.
Both the ECC and the EUA are improvements on the Launch Constitution, and getting clarity both on the laws governing EOS and the process for future changes is more important that which of these two documents we choose.
Why? Because the cost of exiting one chain for another is low and getting lower, so the details of governance are not as important as they seemed to be earlier.
The mainnet will likely be the glue that holds side-chains together. Infrastructure, like DEX integrations work from the mainnet. Side chains will implement IBC to access this infrastructure.
Should Dapps that are highly objectionable to many people, or to powerful people launch on the Mainnet or on a side-chain? Do we want the mainnet to run a dapp marketplace for highly classified state secrets of the U.S. and Chinese governments?
It seems likely that different side-chains will emerge for different types of Dapps, and that they’ll be run by different communities of BPs. The best thing we can do as MainNet Block Producers is to communicate our standards as clearly as possible so that the builders out there can make sensible, long-term decisions.
We have a slight preference of the EUA over the ECC…
…because if its simplicity, and excepting Article II, immediate enforceability. The question of BP liability should be looked at closely.
The fact that a top-21 BP, EOS NY, is the one proposing the riskier EUA, and that a standby BP, EOS Amsterdam, is going through the headache defending the more conservative approach in the ECC, is further evidence that both teams are taking principled positions and operating in good faith (not that we needed any).
Process before Substance
We’d prefer the process for this and future governance changes to be addressed more explicitly.
The community is split on the legitimacy of the idea that 15/21 BPs make decisions and token holders can unvote them if they disagree with their positions. (See the three different interpretations of the referenda problem listed above.)
Parties on both side of the split have been very adamant.
BPs are probably political entities
We (CryptoLions) like building things: Jungle Testnet, Zeos, Simple Assets, EOS Network Monitor, Mongo API, Test Cave, Max TPS testing, and more.
We felt some relief when the referendum system came online in January, because we thought it would deliver clarity to governance, and let us focus on development. However it now seems likely that BPs will not be neutral utilities, and will remain political entities.
No problem. We will shortly provide our opinions on all the referenda which have over a million votes. As of today, there are twenty six of them.
🦁🦁🦁
CryptoLions is an EOS Block Producer based in Ukraine. We strive to make EOS more valuable by building projects that improve the ecosystem, by setting the standard for transparency and accountability, and by popularizing EOS all over the world.
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