Blockchain can change the world but it may not be EOS
As an investor of different Cryto projects, I believe that EOS is one of the block chain with great potential and advanced technology. However, you may also like me starting to aware that there are many problems in EOS which come from DPOS (Delegated Proof of Stake) and its voting system. Here is my opinions and suggestions to relevant parties including Block.one, existing active BPs, Mr Dan Larimer and other community members and hope that it will be constructive and can help to fix the problems.
If you are small investors but has invested quite a big portion of your wealth in EOS, it is crucial to voice out and express your concern. Though EOS is still more advanced and successful when compared with other chains, once the confidence is lost it cannot be recovered so easily. Not to mention that other chains are also putting great effort to improve themselves.
Though we have heard a lot appraisal to EOS from different youtubers or from other media, now it is time for you to express your concern and advice to the community.
As mentioned by Kyle of EOSVIBES and other Youtuber commenters like Crypto Tim recently, several major problems of EOS have come out continuously. Recent twitter post from Brendan Blume , the CEO of Meet.one said that Vote rewards from BPs may be good. Though some good dapps like Chintai and game developed by StartEOS are quite amazing and you can get some rewards from them too, but you need to vote for them as your Proxy.
That mean what you received is not free but you need to sell your voting rights.
*Some very good BPs like GeneEOS , Cyperglass, TeamGreymass are not currently top 21 BPs. *
As an investor of EOS, it cannot be denied that EOS is collapsing and the evidence are stated as follows. In some situation, these phenomenons are inter-related too. They are basically structural and political issue.
Major Problems being observed recently :
- Vote buying and selling from whales/Exchanges (Eg. Houbi)
- Power for Whales/Exchanges in top 21 BPs selection are amplified
- Collusion among BPs (StartEOS and its affiliates, Houbi and its affiliates)
- Proxy buying (Eg. Dapps of StartEOS, Chaintai )
- Voting by Exchanges (eg. Houbi)
- Dispute between ECAF and BPs ( Key losing issue)
Since EOS is new but so far its achievement is great, it is worthwhile to protect it and keep EOS becoming more perfect. On the other hand, long term success of EOS is crucial to the community especially for BPs and VC funds and other long term investors who already invested to EOS.
As you know there is Path Dependence phenomenon for any system. That mean once any system pick up a wrong way, bad habit or accepting even very minor defects, the system will be self reinforced itself and it will get worse until it totally collapse because all the rent seekers inside will reject any change even it is a good suggestion since any change will definitely damage a group of rent seekers since it will take out their cheese. Moreover the collapse will be fast and sudden which I think it may be more vigorous and fast especially in Crypto world.
There is a voice in the community saying that higher voting rate can improve the situation. I totally agree that It is true but it may not happen at all owing to many reasons.
- Hidden cost community paid for Voting
- Liquidity need (Redemption need by institutional investors, Traders, etc)
- Human nature and habit of general people.
- Money say in EOS system. Small investor will think that their votes really doesn’t matter thus they are not eager to vote.
Cost of voting:
Have we make any calculation about how much it cost for voting ? Are we ready to pay for it as one of the community members?
- Time and effort for searching good BPs and keep observing their performance
- If you vote you need to stake and un-staking need 3 days which impose liquidity loss (3 days market crash can make you may lose 50%)
- Time cost and you need to refresh it. (Votes will decay by time) Scatter now can let you choose to auto re-proxy only every week. Is vote decay necessary for the community? If it is “yes”, tools which can enable us to choose “auto re-vote ” automatically every a certain period will make our life easier.
- Token security (is it better to keep in hardware wallet and disconnect from internet?) Some investors will still try to minimize frequency of connecting their wallet online. Even though now we can use ledger to vote, many of them don’t want to interact with it so frequently. For institutional investors and fund managers, they will also consider security, administration work, voting necessary, etc and see which is top priority for them.
- Token short term trading/business opportunity loss
If we add the volatility nature during the calculation, the ROI demand for doing the Voting for me 25% per year is reasonable. (If you come from Finance world, you will know that the premium you can receive by selling an one year long or put option is very high).
Some more problems
- The current system is not one people one vote and so whale/Exchanges/BP with tons of EOS now basically can decide who can be the active 21BPs. Do the current situation of 1 EOS 30 BPs Votes too many or too little? Shall we make it 1 EOS 1 vote, 1 EOS 5 votes, 1 EOS 50 votes or even1 EOS 100 BP votes? We need to think about it. The original design or simulation done before may say that 30 votes/EOS is good. However, I doubt whether it is suitable nowadays as EOS system is changing every day. In my opinion, the more BPs Votes / EOS is, the more room/capability for whales/ Exchanges for selling their votes. The reason is that the absolute difference (net amount difference) between whales and small investors will be multiplied and becoming bigger. If Whales/exchange has only 1 vote/EOS, they can only vote small number of BPs they prefer. If they have 100 votes/ EOS, you can image how many votes they can sell to others.
- Now there is no way beside self-discipline to prevent any person setting up several BP companies in order to pretend that they are different BPs. Moreover, the name of his mom, his brothers can also be used to set up companies and as a result EOS will become more centralized. StarEOS is one famous example. Then can 1 EOS 1 BP vote help to solve this problem? Or less BPs votes/ EOS, the situation will become less balanced.
- Can any Dapps request users vote for their them or even their selected Proxy before we can use the dapps? Is it good to the community? I am totally convinced to vote for developers if they are BPs or even pay for their work but not willing to lose my voting or my proxy rights of 30 votes. Votes are very valuable.
- Is Proxy function really necessary? Is Proxy function creating more problems for the community? Can we cancel the proxy function from EOS? I think that it is no harm to cancel this function.
- In future, token rental like Rex/ Chintai/ others resource rental platforms will take the tokens out from us via smart contract. Can we from the code level keep the voting right to owners even we rent the token out? If not, can these platforms create many proxies in order to let us choose? Choices are cruicial to the community.
- Resource rental of EOS has pro and con too. As you know the pro side, how about the con side? In my opinion, reasonable expensive RAM, CPU and NET can defer Dapps developers with less resource from EOS. With cheap resource rental fee, there will be more shit/ scam dapps. Many shit game dapps can be found recently.A argument saying that people will not use scam/shit dapps. It may be true most of the time but sometime it is not. Scam/shit dapps will have their own way to attract users. For example, high yield of dividend or free tokens provided to token stakers in some game dapps Personally I do agree to encourage more dapps developers joining EOS with reasonable resource fee. From current fee shown on Chintai , they are really quite cheap most of the time.
- Community should also bear in mind that resource rental will make one of the buying force for EOS disappear too since developers no need to stake EOS like before for getting the CPU and net resource. Community is sharing part of their development cost in other words.
- If you rent out your EOS, you get some paid but you lose the utility of the token at the same time. If we want to use EOS dapps, we need to keep a certain amount of EOS as CPU and NET. If you play dice, infiniverse, Trype, etc you will find that 10 EOS is not enough. In future, 100 EOS may be ok since there will be many good dapps on EOS for us to use.
- ECAF- what is it and what is it for?
I think most of the EOS holders dont know exactly what ECAF is, how it is formed, what are they doing, why their request is being banned and neglected by current 21 BPs recently. I dont know the details either but I aware that it is related to key losing or something like that. Then my question is that whether ECAF is a legitimate body designed by the community in order to help solving any dispute inside the community like arbitration does. If ECAF is not legitimate, any legitimate structure within the community can serve the the function? Shall the community need to pay and set up one? Or can we rely on 21 active BPs who should be worked independently. I have seen many messages appearing in different BP’s telegram groups complaining. No matter BPs have make a correct judgement or not, a separate body may be necessary. What do you think?
- Fixed but attractive Voter Rewards after fulfilling voting criteria from System code level (not from BPs or Dapps). Rex alone may not be enough.
In order to compensate voters, 2-4 % inflation can be allocated to voters.(4% of inflation assigned to WPF is suggested to be burned out. I suggest it can be used as Voters rewards). Voter rewards should not be coming from BPs/Dapps in order to prevent Votes or Proxy buying which will make the system collapse and hurt the profit margin of BPs at the same time. BPs should not be ill treated and should provide them sufficient incentive thus they can support the community by providing good hardware and good dapps for us. If community members fufill their duty of voting, voter rewards is fair to every EOS holders. In order to be eligible for the rewards, voting criteria should be fullfilled. BPs should be voted in order to eligble for the rewards.
- Longer unstaking period for eliminating voting from Exchanges
In order to prevent non legitimate voting from Exchanges which utilize depositors’ EOS without prior permission, longer unstaking period can be adopted in order to pose threat to their liquidity and increase their cost of this misbehavior. Any duration from 15 days to 30 days unstaking period may be a good starting point. If rewards are positively related to staking period, community will have incentive to support this.
- Voting criteria: 1 EOS 1 BP Vote or 1 EOS 30BPs vote
One side chain claim that they are using 1 token 1 BP vote system. In my opinion, this is a good method which can eliminate the capability/room for whales/BPS selling its votes (now 30 votes/ EOS) to other non capable for profit or intention for creating their Cartel. The lesser the votes/ EOS, the more balance of the voting can be forseen.
- From code level let’s vote for a paid ECAF to serve the community
We can vote BPs producing Blocks for us and why we cannot vote a ECAF working for us if we believe that an independent entity rather then top 21 BPs is better. I believe that only community authorized ECAF can work with top top 21BPs.
- 12 months ECAF contract and re-voting every 12 months can be considered
- Provide arbitration service and implementation.
- Provide other service like Performance Checking to all standby BPs (we have many paid/non paid standard BPs but how many can provide service immediately are not 100% known). I heard this possibly from EOSvibes before.
- Paid from part of the 2-4% inflation
Better voting and longer staking system and structure in future
In order to attract more long term investors and institutional investors, provide stronger support to EOS price and attract more users for voting, these can be considered in future.
Different rate of voter rewards for different staking period
- Starting from 30 days, 60 days, 90 days, 180 days to 360 days staking periods can be considered, different compensation rate can be adopted for different period.Then less EOS will be used for trading and price of it can be more stable. As we know that there are over the counter markets for Bitcoin and other cryptos, traders are borrowing from Whales, Exchanges, OTC and and dump it to the market in order to generate profit. Longer staking with higher yield can increase the borrowing cost and discourage speculation behaviour
- In order to compensate the heavy cost incurred for voting and attract more voting different compensation rate of voter rewards for different staking period is necessary. This can promote voting and further minimize the size of non legitimate voting from Exchanges too.
- I believe that there is no simple voting and governance structure which can create a good DPOS system. Community is diverse and thought are naturally diverse. It is really very challenging to design a good system and system optimization may need to be carried out from time to time. Thus leaders inside the community have to do plenty of works in coming future.
- Do you agree that the interest of BPs, whales, Block.one and small size EOS investors are the same? I believe that most of the time the answer is YES but sometimes it is No, do you think that that Voting rights for BPs and Proxy is very valuable or in the opposite cost nothing? I believe that it should be very expensive.
- Do you think that the system of EOS is getting better or getting worse? I believe that now it seems to be getting stronger with many new dapps coming out but in fact it is internally getting worse.
- Do you think that a more decentralized BPs structure is good to the community or a centralized BPs cartel is better? I believe that we should encourage competition among all BPs in order to make EOS community stronger.
- Do you think that the current situation of capable BPs being out from the 21 BPs is healthy? The answer is simple.
- Money say in EOS system and whales have both advantage and disadvantages to the system. System should be designed to minimize their impact to BPs selection and eliminate votes selling as many as we can. We can just make a more balance ecosystem.
- Let’s make the system becoming more perfect.
**There are many valuable **suggestions from Youtube KOLs and community members too. The captioned are my idea and ideas coming from different people. I hope that other community members can comment, criticize, propose and drive the growth of EOS.
Blockchain will change the world and it should be EOS if we do something now.
Your Remaining Votes (within 24hrs) : 4000 of 4000