Before I start, I feel I need to state (for those who don’t know me), that I truly believe in the eosio technology and its long-term adoption.

And to those of you who mistake this article as FUD I say this: I have invested an incredible amount of my own time and resources building projects on EOS. If your only concern is seeing a short-term increase in the EOS token price, then this article probably isn't for you. This article is for the long-term investors, developers and believers in EOS and I have written it because I want EOS to continue to improve for the betterment of the network as a whole.

Okay, with that said, let’s begin…

On EOS, token holders are the people who decide who governs the EOS blockchain, they do this by voting for Block Producers and this is something that all of us who have invested in EOS tokens or any other DPoS blockchain should understand.

In the same breath and probably lesser known to investors and community members (however you see yourself), is we have also agreed to an interim Constitution. This Constitution is temporary until we either ratify it or we decide to change it to a different Constitution through referenda (most of the community members I’ve personally spoken to want to change it).

Having a referendum platform is a great mechanism for allowing the EOS community to express its will and desire for change.

There are still a lot of things we (the community) need to fix on this young blockchain.

By design, there is no getting away from the fact that EOS is being run as a Plutocracy, which means the people who own the most amount of tokens are the ones’ making all of the important decisions.

Initially this wasn’t seen as too much of a problem as the perception in logic went something like this…

‘Regardless of how many tokens you personally hold, all EOS token holder interests are aligned.
Large token holders (Whales) will do what is right for the EOS blockchain as their decisions will have a direct impact on the token price; therefore directly effecting their own token wealth. Bad decisions for the network = Low token price. Good decisions for the network = High token price.'

However, some recent events have proven this to be an incorrect assumption and the people who own the most amount of tokens, maybe aren’t making decisions that are in the best long-term interests of the EOS main net.

Some of the EOS Block Producers themselves are whales which gives them the opportunity to vote themselves in and govern the EOS network, especially when there's slim voter turnout. A few of these whale BPs have even been acting in a way that is not positive or beneficial for the EOS network or indeed the image of EOS as a decentralized blockchain as these Block Producers are not abiding by the EOS Constitution or the Regproducer agreement (the Block Producers code of conduct).

An example of this

It recently came to light that Starteos have launched a second Block Producer called games.eos.

games.eos is listed on the Starteos website as one of their properties and they are promoting it as well as openly stating they will buy votes in exchange for (games) tokens.

I was concerned with what Starteos is doing, so I reached out to them directly to express my concerns and also to ask them some questions and to point out why I believed their act of self interest would weaken and damage the EOS main net if they continued to buy votes and run more than one BP node on the EOS main net.

They did not reply to any of my direct messages, so after 4 days of no response - I wrote them an open letter and posted it on various Telegram groups including theirs.

This is that letter:

An Open Letter to StartEOS

Starteos has just launched a 2nd BP called games.eos.

I have attempted to enter into dialogue with you guys and have given you over 96 hours to respond to my direct private messages.

It’s disappointing that I have not received any kind of response of any kind.

I wanted to reach out and request that you stop running the second Block Producer candidate games.eos that currently sits in 66th place (a paid BP position). The reason I ask you to stop is because it sets a very dangerous precedent for the EOS network and I believe, once you make this move, other BP’s will follow suit and copy your actions.

The reason it becomes dangerous;

If other BPs copy what Starteos is doing and launch a 2nd or 3rd BP themselves; we will soon end up with the large BPs being owned and run by the same handful of owners.

EOS is not like Bitcoin mining - having a handful of owners owning all nodes within the top 21 or even 15 out of the top 21 means the entire EOS network will be compromised beyond the point of being worth any value.

People will see the vulnerabilities of having the same owners running different BPs – the ability to censor, an easier ability to change peoples private keys and reappropriate funds – all of this will be made much easier and much riskier by having large BPs dominating EOS with multiple BP candidates.

If these circumstances unfold - people may as well use traditional centralized structures, as they won’t see the benefits in using or owning a decentralized network that is being run by a handful of the same owners. It completely erodes the benefits of building a decentralized system.

So please re-think what you are doing and consider pulling your 2nd BP.

When other BPs start to copy your actions, it will erode away the security features of DPoS and will start to make EOS rather pointless as a decentralised network. I view what you are doing here as the beginning of the end for the EOS main net.

I also see from your website that you’re offering coins in exchange for votes to your proxy.

https://mp.weixin.qq.com/s/9q-1-XebOpUELLDcf-HhqQ

“Set the proxy to vote to get the game coins”

“the agent will vote for you without the user having to vote on his own.”

This is a violation against Article IV of the Constitution - No Vote Buying.

I hope you will reconsider your actions.

Excessive greed does have consequences.

Kind Regards
Kyle
EOSVIBES

This open letter finally got me a reply from one of their representatives, but unfortunately the answers I received did not ease any of my concerns.

Starteos admitted to creating the games.eos account and admitted to ‘collaborating’ with games.eos but they told me they had different owners, which does not match up with what they have stated on their website.

This is what is stated on Starteos's website:

“The proceeds of the game.eos node will be used for the game rewards developed by ST. The prize pool allocation ratio of each game is determined by ST.
The initial labor and server costs of the node are all borne by the ST. At the same time, ST reserves the right to make policy adjustments in response to changes in costs, conditions, and environment. ST has the management rights of the nodes and all policies including the node revenue distribution plan.”

On receiving the reply and noting the discrepancy in what I was being told compared to what is actually stated on the Starteos website; I asked the Starteos representative who (if different), the owners of games.eos were compared to the owners of Starteos.

I still haven’t received a reply to this question.

For the above reasons and more, I feel it is important that EOS Block Producers adhere to both the EOS Constitution and Regproducer.

In an ideal world, the voters themselves would provide the checks and balances to ensure they do, but as we have seen over the last 5+ months, token holders simply haven’t been doing this.

If some Block Producers are willing to buy votes, then the token holders they buy those votes from are also complicit in that BP’s non-compliance and what we end up with is a corrupt system.

Currently, I find it impossible to disagree with Vitalik Buterin when he makes accusations of inevitable corruption happening on EOS with the only likely outcome being a small powerful cabal running all block production on the EOS network.

If, as a community, we allow Block Producers to launch and run multiple nodes on the same chain and vote for them in exchange for tokens (bribes), then we strip out the decentralized protection layer from the EOS network and ultimately – erode away the token price.

N.B. Since writing the open letter to Starteos (last week), the games.eos BP has moved up +15 places from 66th to 51st place.

So how do we fix this?

Well, going back to that 'ideal world' scenario - EOS token holders should demand that those who govern the EOS blockchain (the Block Producers), are responsible good actors that have the interests of the entire EOS network at heart and are not just serving their own self interests – and should vote out BPs who’s self interests are not aligned with the interests of all token holders or the security of the EOS network as a whole.

Currently this isn’t happening and it’s disappointing.

I think the REX will go some way to helping, as more token holders come off exchanges and into their own wallets in order to receive rewards for staking, lending and voting (voting for a minimum of 21 block producer candidates is a requirement to receive rewards from the REX), but by no means will this be a silver bullet.

I don’t see ECAF (in its current form) as having the competence, staff, funding or legitimacy to solve the problem of BP non-compliance either - they are talking in excess of 6 months to solve even the simplest of cases.

So yesterday I floated the idea (on Telegram) for BPs to receive their pay through a compliance smart contract whereby pay to BPs could automatically be stopped, reduced (through fines) or flow normally; depending on whether the BP was being complaint or not.

As long as each BP maintained compliance then their rewards would be paid as normal.

The good acting BPs who adhere to both the Constitution and Regproducer wouldn’t have anything to worry about, but those breaking the rules would have a tough time collecting their rewards.

Of course, Block Producers would need to agree to the implementation of something like this and currently I'm not sure they would. I often feel somewhat disappointed with the respected and compliant top 21 EOS Block Producers who stand back and don't say anything against whale BPs who ignore the rules that everyone else is abiding by. It could be because they are scared of speaking out and possibly losing some of those same whale votes.

However, if no action is taken against non-compliant BPs, either by token holders or by compliant top 21 Block Producers and the non-compliant BPs are allowed to continue to reduce the security and value of the EOS main net through their selfish actions, then there are more extreme measures we as a community could take...

One such measure would be to fork the network and cull all accounts who have proved to have acted in an irresponsible manner on the original EOS main net (could include non-compliant BP accounts as well as token holder accounts who voted for them in exchange for bribes, it could even include compliant BPs who refused to act) and instead forge ahead with a forked EOS network that has an effective compliance structure and ensured decentralization.

(Telos has already implemented something similar by significantly reducing all whale accounts on their network).

Obviously, I have no desire to see the EOS main net fork, but if some BPs and their paid voters cause EOS to become a centralized network run by a handful of the same owners, then I’d definitely be willing to say goodbye to that version of the EOS main net. That's not why I'm here.

eos-costarica