This article comes fromYahoo! Finance, original author: Brady Dale

Odaily Translator |

Odaily Translator |

In any governance system, bribery is a big taboo. However, for EOS, the blockchain project currently ranked eighth in market value, bribery has become a recognized business model.

According to a new service launched by EOS, they will make it easier for block producers (BPs, nodes elected by EOS token holders) to verify transactions on the network, and at the same time make it easier to share block rewards with those people who voted for them. Mr. Odaily (WeChat: o-daily) learned that this service called Genpool was launched by GenerEOS this month, and GenerEOS itself is a candidate for block producers on the EOS blockchain.

Back when EOSIO was just an idea, the EOS community debated whether Delegated Proof-of-Stake (DPoS) would result in validators bribing users to support themselves. However, in the early days of the project, the EOS community believed that they could effectively prevent such activities. (Odaily Jun Note: EOSIO is the software that supports the EOS blockchain. When this article was written, the price of EOS was about 4.09 US dollars and the market value exceeded 3.9 billion US dollars. The delegated proof of equity is a consensus mechanism designed to limit the number of node verifiers to one Fixed collection.)

What’s “interesting” is that the EOS community is now changing the rhetoric, and they are fully supporting what users call “voter rebates” (voter rebates) model.

In an announcement published on the Medium platform, GenerEOS stated:

"The Genpool platform provides zero-barrier access to a free market ecosystem, connecting proxy owners with voters who want to support quality block producers and receive a percentage of additional block producer revenue in return"

At present, Tim Weston, a business strategy partner of GenerEOS, has not yet responded to this matter.

Although EOS has launched similar services in Asian markets, this is the first time in overseas markets, which means that they explicitly tell token holders that the best voting income can be found from block producers - just like Bitcoin. Like (BTC) miners, EOS block producers are rewarded with newly mined EOS tokens when they record transactions on the public ledger. In short, the Genpool service "nakedly" allows EOS token holders to get paid and participate in network governance.

According to some critics, the Genpool service has fueled long-standing fears in the community that, in a well-thought-out governance system, the wealthiest will dominate network governance, and payment methods will make it easier for those rich to It is easy to consolidate your position.

Cryptocurrency exchange Binance (Binance) research team published a report on February 18th, which wrote that if the validator is more than one entity, nothing prevents them from taking action, and the whale can easily block Occupying more than one position in the status producer management committee increases the possibility of triggering a Sybil attack. The research team wrote in the report:

In late January 2020, due to the discovery of the EOS network instability, Binance announced that it temporarily stopped the withdrawal of EOS tokens. At that time, other exchanges (such as Upbit and OKEx) also suspended withdrawal services, which may be due to the release of Block.One Caused by a software upgrade to the latest version of EOSIO.

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What is proxy voting?

For those not familiar with EOS, their newly launched Genpool service might be a bit confusing.

Let’s make a simple explanation here: every EOS token holder can choose to put his own tokens into the votes of the block producers, these entities can verify the transactions on the network and ultimately own the right Full control over code changes and even wallet validity. In fact, after Block.One released the EOSIO software, getting enough voting power became one of the biggest hurdles to launching EOS.

Each EOS token holder can vote for up to 30 block producers, of course, this is not enforced. EOS votes are distributed proportionally to the number of tokens held by voters. If someone owns 5 EOS and stakes all of them to vote, then each block producer candidate they voted for will get 5 votes, regardless of the number of tokens they hold. People choose 3 votes, 7 votes, or 17 votes.

These votes are continuous, so for block producers, they can get votes again after every 10 minutes. However, when there are 30 EOS voting entities, it is difficult to determine who the voting object is. Therefore, EOS decided to set up a new service role "voter proxy" (votor proxy), which will select a list of block producer candidates, and then let voters vote on the block producers in these lists, and voters only need to put Delegate your own EOS tokens to a voting proxy.

Genpool’s proxy service takes the basics a step further by making it easy to find the most enticing rewards, and providing voters with the ability to filter by custom metrics like fees, ideas, number of stakes, and more.

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Oppose first, then acquiesce, and now make it public?

When EOS first launched in 2018 after great hardships, early participants spent a lot of time designing a "constitution" to govern its ecosystem. At that time, the draft constitution explicitly prohibited vote bribery, an idea that also reflected EOS Projects initiate consensus among grassroots organizations.

However, when the EOS blockchain was launched, no governance process was incorporated into its code (except for the selection of block producers). As a result, when they developed rapidly, the giant whales swept the army, which also proved the original design The "Constitution" is nothing but a dead letter.

At the end of 2018, buying votes caused a mild scandal on EOS. The following year, EOS dropped the idea of ​​an end-user license agreement—this time with no mention of buying votes at all. Today, however, EOS not only tolerates buying tickets, but has normalized it.

Colin Talks Crypto is an anonymous YouTuber and EOS proxy leader who has been working on EOS for a long time. Before that, he also opposed the EOS governance model and created a voting proxy to fight against ticket buying. However, in a video last September, he acknowledged the reality of EOS buying votes and announced that he was building a second voting proxy to support the best block producers.

Block.One CEO Brendan Blumer also voiced his support for buying votes, tweeting in early February 2020:

““Voting rebates are just returning value to EOS token holders and I am very supportive of that. "

“B1 voting is coming. We are working hard to establish a non-profit entity that will provide EOS token holders with an alternative voting option and will work to redefine the viability and competitiveness of the EOS public chain.”

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What should be, is what it is!

Based on relevant market research, the general consensus among some crypto thought leaders seems to be that vote-buying in blockchain governance may be inevitable. For example, Meltem Demirors, chief strategy officer of CoinShares, believes that encryption governance itself is a "hot issue", but she also said that encryption projects have a service that can manage vote buying and selling transactions, which is better than a black-box market. Meltem Demirors even gleefully said:

“Great, let’s set a transparent price for governance. Collusion, coercion, manipulation, lobbying, bribery, and bribery are integral to the modern democratic process, and if you think crypto governance won’t be swayed by these forces, I I can only say that you are too stupid."

Spencer Bogart, a venture capital partner at Blockchain Capital, also expressed a similar view, saying:

“I think most, if not all, of on-chain governance will end up with some sort of explicit or implicit means of buying votes, so it’s in their interest for EOS to at least embrace that fact rather than shy away from it.”

However, Spencer Bogart specifically stated that since the launch of EOS, he himself has been skeptical about the project.

Economist Joshua Gans, who works on tokenomics, argues that voting can lead to corrupt second-order effects, writing:

“When buying and selling votes becomes the norm, there is also no incentive to really know if someone is a trustworthy node operator, let alone a trustworthy ‘reward’. By becoming a node, you will earn the same Earn as much as you spend.”

"The problem is that we can't dismiss it entirely, after all, the network is running and the cost has been borne."

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"V God": Already foreseen all this

In fact, as early as March 2018, Vitalik Buterin, the co-founder of Ethereum, wrote an article entitled "Governance, Part 2: Plutocracy Is Still Bad" (Governance, Part 2: Plutocracy Is Still Bad) He analyzed that EOS ticket buying behavior will inevitably appear, he wrote at the time:

"Bribes are actually bad, but in practice, that claim is disputed by people who generally believe that bribing votes improves market efficiency."

But Vitalik Buterin believes that buying votes will lead to the centralization of the system, and the result of centralization is that tokens will eventually follow the path of imitation of the old economic model. He said:

"Ordinary voters have very little opportunity to influence the elected representatives...so, their incentive is to vote for the highest and most reliable bribe."

Indeed, the only real power EOS token holders have on the network is voting on block producers. In contrast, ordinary Tezos token holders can theoretically vote on code changes, while on EOS these rights are completely monopolized by block producers. While ostensibly EOS voters can kick block producers at any time, there are more voters and fewer block producers - making it difficult to coordinate trade-offs.

The core of Vitalik Buterin's prediction about EOS buying votes lies in the "cartel". He believes that entrusted candidates will inevitably propose various preferential conditions in order to win voters, until a certain point forms a group situation. Worse, there may even be a single-entity cartel on EOS, as described in the Binance report: Some groups gain more than one spot on the block producer list by pretending to be multiple entities.

(Odaily Jun Note: Cartel is an organization composed of a series of independent enterprises producing similar products, and the producers of collective action, the purpose is to increase the price of such products and control their output.)

Rumors abound about an EOS cartel, but no clear evidence has yet been found. On the other hand, although buying votes is true, the community has slowly begun to accept it despite dissatisfaction. After all, as long as the rules allow it, someone will do it. As YouTuber “Colin Talks Crypto” puts it in his video: