Votes are the premium resources on the EOS blockchain. Votes are power, votes are profits, and in the new world of blockchain politics, you can literally buy votes with money. Block Producer Collusion has been at the center of the blockchain politics, as blockchain governance has created a system very different from the real-world politics and there are plenty of ways to exploit these new features. On the EOSIO blockchain, these new features include:
- On the user level: One real-world identity can hold more than one tokens (blockchain’s voting ID)
- On the token level: One token can be used to vote for up to 30 BP candidates
- On the economic level: You can buy as many tokens as you want with enough financial resources
- And what do you call this: Your tokens can be used by others if not managed well (as in the case of EOS tokens sitting idle in exchanges)
These create many ways for actors to game the ecosystem. Right now we already have a number of issues that are the results of these new political system design, including:
- BP Collusion
- Exchange Supremacy
- Governance monopoly by the rich
None of these are what the blockchain pioneers wanted for the decentralized world. However, the inherant challenge for any democratic system compounds these issues:
- Low voter participation
Which just makes it harder for good actors try to steer the ecosystem in the right direction. And anyone who has been around in the industry knows that voter education is not easy. Currently the total EOS tokens staked for voting are only about 50%, and the actual votes only account for 25% of the total network (see EOS Authority’s network monitor).
The issue is complicated, but we can basically summarize the whole governance issue in the following way: power concentration — few actors in the ecosystem have the majority of voting powers to dominate governance.
At the center of this issue is BP Collusion — the formation of BP interest groups to keep each other in power through similar voting patterns. The exchange of interest is simple: all we want is votes, I vote for you, you vote for me. No strings attached.
This has caused outrage in the EOS community. The peak of the discussion was reached when in late September a Chinese source exposed the actual document that show Huobi BP’s vote exchange with other “big players” in the system to keep one another in power (see the original post here). The EOS community has since called for the removal of Huobi’s BP and other Chinese BPs involved in the scandal. The effect has yet to be seen.
Howeve, it is not a secret that BPs have had similar voting patterns to keep each other in power. EOS Authority has developed tools to keep track of these activities and EOS token holders can check them out themselves.
It is therefore not a surprise that very often the top 3 BPs are all popular exchanges, all of which involved in the vote collusion scandal.
The intricacy of the collusion problem partly lies in that one token can be used to vote for up to 30 candidates. This is imaginable in real-world politics. In a one-token-one-vote system, whale token holders can elect one BP single-handedly at best. Now in a 30 vote cap model, they can elect up to 30. This means that whale token holders can determine the top 21 BPs all at once.
Well, this is not so bad in a system if all votes are cast bsed on the merit of the BP community — the contribution they make to the ecosystem and so on. But if we take a look at the “top 50 EOS BPs for best governance practices & value adding), the case is to the contrary.” This is detrimental to the growth of the whole EOS community.
This is where despair comes in…
The cryptocurrency industry is notorious to the mainstream world for its lack of fund transparency and shady/unethical business practices, from ICO scams to unbelieveable coin listing fees charged by exchanges. People know that it’s not the fairest system. There are EOS enthusiasts out there encouraging more token holders to vote. Yet the voter participation rate has not really taken off, especially seeing that even it has gone up from 15% at the network launch in June to now somewhat 25%/50%, the top BPs are still exchanges with a history of vote collusion and misuse of users’s fund. And they are not the most contributing members to the ecosystem either.
Seeing all this, what do you say to motivate token holders to vote — the system design is intrisically flawed.
Various proposals have been made to fix this issue:
- A one-identity-one-vote model proposed by BlockchainKid
- Referendum tools to fix the governance issues, proposed by the Referendum Working Group, to encourage voter participation through better user experience
- One-token-one-vote and BP reward sharing model from EOSForce
- Other sister chains such as Telos and Worbli.
All of these solutions have merits on their own part and approach the issue at hand differently. However, we can all agree on the idea that the current system of governance is not working well and that some BPs need to be ousted. It’s just a matter of how.
BP collusion is the most fundamental challenge to the new world of decentralized blockchain governance. The top 5 most used blockchains now are all DPOS. We have to solve this issue if we want to move forward, and more importantly, to prove to the world that blockchain — a decentralized Internet — works.