Can EOS overcome its governance concerns?
As EOS continues its turbulent post-launch trajectory, its governance system has once again come under fire.
On October 1st, Block.one posted a statement on its official Medium blog entitled “Oct 1, 2018 Statement: EOS Public Blockchain Governance”, signed by the company’s CEO Brendan Blumer.
In the statement, Blumer writes, “We are aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims.” Blumer adds:
“We believe it is important to ensure a free and democratic election process within EOS and may, as we deem appropriate, vote with other holders to reinforce the integrity of this process.”
The claims in question involve a practice of Block Producer (BP) collusion through ‘mutual voting’, allowing BPs to receive unfair payoffs.
The evidence provided suggests that Huobi and other BPs are mutually voting for one another in order to ensure each other’s positions as block producers. Additionally, it suggests that BPs are trading votes for EOS payoffs.
In a tweet, Twitter user Maple Leaf Capital analyzes an alleged leaked Huobi spreadsheet:
Though Huobi deny the claims, stating “Based on the initial investigation, there were no financial contracts involved between Huobi and any third party,” this is not EOS blockchain’s first run-in with suspicious block producer activity.
During the rollout of EOS, many long-time crypto influencers, including Jackson Palmer, creator of Dogecoin, questioned the integrity and transparency of the governance system:
In response of these issues, EOS community member BlockchainKid, creator of the block producer rating platform Mereo, has proposed a solution.
Mimicking the U.S. SEC’s whistleblower platform, BlockchainKid’s “WHISPER” program would incentive anti-corruption endeavors with rewards for those who wish to speak out against undesirable behavior from block producers. BlockchainKid, noted, however, that for the platform to function appropriately, it would need an independent and trusted committee, which could pose its own set of challenges.
As the platform continues to struggle to tackle corruption within its government, there is another challenge that will need to be addressed moving forward.
The Great Firewall
Though language barriers have been no easy feat for block producers to overcome, technical factors add to the challenge.
Because of China’s ‘Great Firewall’, fans and block producers alike are divided in their preferred methods of communication. While Western entities gravitate towards Telegram, Chinese participants tend to gravitate toward WeChat.
In response to the divide, EOS users created a solution, an EOS Mandarin Arbitration Community (EMAC).
A member of the community explained that “he believes that the cultural difference and language barrier still exists. But with the collaboration of the community, he is confident that they are no longer a serious issue to the ecosystem.”
Measuring EOS’ health
Despite progress being made to tackle out-of-control RAM costs and DApp hacks, James Spediacci, a prominent crypto investor, laid out a scathing review of the EOS platform on Twitter:
In addition to the aforementioned governance issues, Spediacci also raised questions about the actual activity being reported from DApps:
Spediacci cited one DApp, in particular, to highlight his point.
BetDice, he explained, had only 91 Twitter followers and 800 Telegram members at the time of the post, though the platform boasted nearly 8,000 active users.
Spediacci also pointed out EOS’ ICO revenues:
He even criticized how the funds were raised:
Can EOS overcome the negative sentiment?
It’s not unreasonable for crypto-enthusiasts to be skeptical of the platform, but is the criticism justified?
Block.one and the EOS community have continued to work hard in their efforts to tackle bugs, hacks and exploits on the platform, but centralization remains a major concern for users.
Overcoming the governance issues will be one of the biggest challenges for the blockchain, and if the cannot be addressed, EOS will never be the “Ethereum killer” it was built to be.
Cover image credit: pxhere.com
