Since EOSIO was announced the Delegated Proof of Stake system it uses has come under scrutiny. This is due to a vulnerability which could possibly lead to a cartel controlling governance of the entire blockchain.
Due to this possible vulnerability the topic of block producer voting is a largely debated one within EOS communities. Just Google ‘EOS cartel’ and you will see an endless number of pages with articles on the matter.
The nature of the fear comes from the fact that the DPOS system EOS uses takes into consideration the number of tokens each voter holds.
This essentially means the person with the deepest pockets has the most say in the chain’s governance. While the ability to vote for up to 30 block producers (BPs) means collusion is possible.
One Account, One Vote
The obvious benefit is that collusion between BPs becomes a lot less of a threat. An obvious vulnerability (for now) is the lack of proof of uniqueness for account holders. This means whales could collude by pooling funds and evenly splitting the vote over a proxy.
However, the theory would be that pooling funds would lower the say of the conglomerate. This would, hopefully, mean the diversified say of the average holder would have a superior weight.
As a means of incentivising token holder participation in the blockchain’s governance, Enumivo are rewarding those who take part in the one vote system.
Aiden Pearce, Enumivo Founder, released a post on the official community forum explaining he would be allocating 400m LTS tokens for the cause.
The amount of LTS tokens users receive is dependent on their vote weight which means refreshing your vote daily will give you the highest returns. However, it is not compulsory.
In order to take part, users are required to stake their ENU and then vote for one BP. Once they have done so they need to send 0.0001 ENU to the ‘claimforvote’ account (this is returned).
One blockchain project which uses the EOSIO software, and attempted to tackle the issue of whales forming cartels, from the start, is Telos.
As per the Telos Foundation website, the EOS token distribution saw the largest 1,050 accounts acquire roughly 90% of all the EOS tokens.
This means they hold the accumulative power to control who is a BP, as well as all other aspects of EOS’s governance.
Telos’s solution to the problem was to cap the number of TLOS tokens any one account received when their snapshot was taken. They capped the number of tokens to 40k- the 99th percentile of EOS ownership.
Voter Diversity Coefficient
In the current system a BP with one voter that has 10 EOS tokens will have the same weight as a BP which has been voted on by 10 people with one token. In reality the BP with 10 votes is more representative of the community as a whole. Should this not mean their position in the BP table reflects as such?
While the issue of on-chain proof of uniqueness is solved there would always remain the chance of token spreading. By which I mean whales spreading their tokens across multiple wallets to increase their coefficient.
If token spreading did occur it would be fair to assume that it would be provable via the blockchain. You would also expect the larger voting community to punish such behaviour by removing votes.
When proof of account uniqueness issue is solved it would be possible to further improve this system. It could be improved by adding extra weight to accounts which have been proven to be unique.
EOS and Enumivo’s initial distribution issues will not be changed. The only way to move forward is by attempting tackle them, which I believe both chains are doing. Hindsight, aye?
Love, peace and happiness.