What Is EOS?
Calling itself the most powerful infrastructure for decentralized applications, EOS is a blockchain-based, decentralized system that enables the development, hosting, and execution of commercial-scale decentralized applications (dApps) on its platform.
EOS is currently the fifth largest electronic currency on the CoinMarketCap, with a market value of $ 7.2 billion. The currency has risen more than 4 percent in the past 24 hours, trading at $ 8.1. EOS is currently listed on Huobi.com. One of the three largest trading floors in the world. Currently EOS is traded on popular electronic currency on the floor of Huobi that is USDT, BTC, ETH and HT.
EOS and the governance issues faced by the Blockchain after migration to mainnet.
With the launch of the platform came the delay in voting brought about by lack of reaching the 150 Million EOS tokens needed for staking. Eventually, the community managed to elect 21 block producers and the platform went live on the 14th of June. But two days later, the network would experience a freeze due to a software bug.
Block.one, the EOS creator, was then reported to be working on creating a patch for the bug. What then proceeded, is that the block producers held a conference call to discuss the problem and how to solve it without compromising the rest of the token holders.
The decision was then reached that the block producers would lock seven compromised accounts. These accounts could potentially allow ‘thieves’ to misappropriate funds on the platform due to the bug.
This action seemed like an overstep of their mandate and throwing decentralization out the window. But during difficult times, comes the need to make quick executive decisions. Block producers are meant to be executors of discussed and voted decisions, and not decisions makers. But given that the EOS constitution has not been ratified, it is within their powers to act as they did.
EOS issued a statement on Steemit about the Block Producers decision to Freeze 7 EOS accounts. In the statement, the following was said acknowledging the difficult decision:
“ Given the time sensitive nature of this case, Block Producers debated this difficult decision for over two hours today on a call. On the one hand we could protect token holders, on the other this on the surface appears a dramatic overstep of our role in the constitution and BP agreement, which is to be the executor only of arbitration decisions, not to also be judge and jury.”
However, the following was added to explain why the decision was reached to freeze the 7 accounts:
“…Our own conclusion is that if a ratified EOS constitution and arbitration was in place, then it would indeed be a fundamental overstep of Block Producers to do more than action arbitration decisions. However this is not currently the case, so the question was whether we would freeze the tokens on 7 accounts identified as already unlocking (meaning potential thieves could appropriate funds in under 24hrs), to subsequently enable ECAF when able to review and pass a ruling – and protect token holders to the best of our ability”.
The Block Producers went ahead to eventually freeze the said 7 accounts. They also emphasized a need to ratify the said constitution because without an agreed ‘document’, democratic rulings during critical events will continue being a challenge. Up until the constitution is ratified, the block producers have the mandate to make tough executive decisions. This is an example of good governance by the 21 Block Producers.
EOS BPs Violating its Own Constitution
According to reports, the 21 EOS BPs have frozen seven accounts allegedly involved in a phising scam. The decision to freeze the accounts has brought up a lot of controversies. Many critics say it is yet another example of the lack of decentralization in the EOS project.
Details of the Freeze
The 21 EOS block producers (BPs) unanimously voted to freeze seven EOS accounts. There are allegatins that these seven accounts held stolen funds from a suspected phishing attack. The BPs decided as part of the EOS911 protocol which was initiated by EOS42 – one of the 21 BPs. This initiative enables the recovery of stolen funds. However, the main bone of contention is that the decision by the BPs contravenes the provisions of the EOS constitution. Article IX of the EOS constitution states:
“Dispute Resolution – All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules”
Based on Article IX of EOS’ controversial constitution, BPs don’t have the authority to make such decisions. The power to resolves disputes is solely in the hands of an “arbitration body.” The role of the BPs is to carryout out the resolutions reached during arbitration.
BPs Circumvent ECAF
The EOS Core Arbitration Forum (ECAF) was the arbitration body for this dispute. ECAF declined to take any action, citing limited authority to actthe in the matter. This decision was based on the fact that the main EOS constitution is yet to be ratified – only an interim constitution is in place at the moment.
With ECAF unwilling to act, the appears the BPs took it upon themselves to come to a decision. In a blog post by EOS New York, the BPs said:
“We plead with the accompanying Block Producers/Candidates that the ECAF must step forward to issue the emergency freeze action on the affected accounts. Without this, we proceeded as a group to review the evidence ourselves and came to a difficult decision of executing based upon the evidence brought forth.”
The decision by the BPs to freeze the seven accounts has generated a lot of debate within the cryptocurrency community. The major focus point on both sides of the argument is on the philosophy of blockchain immutability and decentralization. Critics like Jackson Palmer of Dogecoin, cryptographer, Nick Szabo, and Bitcoin Foundation co-founder, Charlie Shrem disagree with the decision of the BPs.
Most critics are against the monopoly of the 21 BPs. According to them, such a situation hardly qualifies as a decentralized blockchain. For the supporters of the BPs, they blockchains need protocols in place to punish bad actors.
EOS Proposal Of Rewriting Its Whole Constitution Also Helps To Combat Extreme Centralization
EOS Arbitration: Not The Best Implementation Right Now
Recently Huobi has one EOS block producers panel discussio, on the Huobi Talk show.The EOS team proposes to change the Whitepaper starting from the basics. One of the controversial aspects seeks to reduce the power of arbitrators over the decisions affecting the network:
“Bottom line … damage to community from ECAF is greater than funds we hope to restore to users … Arbitration should be limited to correction of intent of code… Freezing should be limited to code not function at intent.”
Such statements are a reference to the freezing of the addresses following a dispute over the theft of private keys.
You can review Huobi Talk's talk with EOS Founders: here
A Blockchain’s Gotta Do What a Blochckchain’s Gotta Do
Shortly afterward, Dan Larimer, CTO of Block.one, publishes an article in which he talks about the importance of code as “law” in a blockchain, and how that should be the focal point for arbitrators.
He also mentioned that it was essential to consider the possibility of eliminating excessive arbitration to achieve greater objectivity in the blockchain and combat the possibility of mob-rule proliferation:
“Users of the EOS blockchain need some guarantees from the community in order to feel safe and secure. If everything on the blockchain is subject to mob-rule, then no one is safe. If the community does not have strong, objective, organizing principles, then everything is subject to interpretation and becomes unpredictable and arbitrary. Block One calls for an end to all arbitration orders other than to render non-binding opinions on the intent of the code.”
This post concluded with a proposal for a Constitutional Referendum with some very interesting suggestions, among them preventing block producers from freezing accounts.
Evidently, such proposals raised some questions around users. Some of which could not yet believe Larimer’s intentions to rewrite the whole constitution:
“Am I correct, in understanding you’re proposing removal of the entire current constitution, and replacing it with one that only refers to arbs being able to rule on code VS intent and code vulnerabilities / hacks like DAO?”
A telegram user asked
To which Larimer responded: “yes.”
The EOS community has not yet taken a clear direction on this proposal; however, the results of a possible adoption could be positive, at least at first sight.
Personal views on the constitution of the EOS
Many participants in the EOS see the whole constitution as a problem, but for me EOS is a promising technology for building decentralized applications. The proposed constitution of Block.one is "a major improvement over the original", but still can not be enforced.
Keywords:
Huobi Pro, Huobi Talk, EOS block producers panel discussion.
Related links :
Register Huobi: https://goo.gl/LMjLyc
Register HADAX: https://goo.gl/LMjLyc
Huobi talk show : https://goo.gl/Ni1pqi
Related articles :
https://medium.com/@bensig/eos-block-producer-faq-8ba0299c2896
https://www.coindesk.com/eos-arbitrator-problem-crypto-governance-breakdown-explained/
https://medium.com/eos-new-york/the-state-of-eos-governance-ecaf-regarbiter-401c073d622d
