EOS, the blockchain network that raised $4 billion in startup funding, has launched a new, non-profit initiative called the ‘EOS Alliance’, with the apparent purpose of making the system more transparent, according to an official blog post published in Medium.
The EOS Alliance will “Empower EOS For All”. Its founding board members include Galia Benartzi, co-founder of Bancor, and R&B artist Akon.
It is intended to facilitate communication between the different parties that make up EOS – “token holders, block producers, application creators and other stakeholders” – and it will operate in English, Korean and Chinese. The official website EOS Alliance greets you with the words “Providing the focal point the EOS community needs to express its will.”
It will be funded by private donations denominated in EOS tokens, capped at $1 million a year. According to the announcement, it is explicitly not to have any executive power.
EOS, Sometimes Shady
EOS was created by a Cayman Islands-based company called block.one and is presented as a competitor to Ethereum. That means that it is a blockchain network which people can use to write and run smart contracts and decentralised applications. EOS attracted more than $4 billion in investment during its year-long ICO.
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The network’s defining characteristic is that it runs its blockchain on a consensus system called ‘delegated proof of stake’, which means that transaction blocks are verified and processed by 21 elected representatives.
As with any major project, there have been teething problems and criticism, the importance of which are magnified because of the enormous amounts of money involved. One is connected to its election system – block producers are all major companies in their own right that set up professional websites to campaign as an actual politician would do. To anyone aware of how politics functions, this is not an encouraging basis for what is supposed to be a decentralised system.
Add to this the fact that block.one itself, which holds 10 percent of all EOS tokens, votes for producers too, and you can see why this is not the most decentralised of systems. In June, block.one received an undisclosed amount of money from investors including Bitmain, the company that has monopolised Bitcoin mining and which is (incidentally) an elected EOS block producer itself.
EOS’ launch date of June 7, 2018, was delayed for a week because not enough people were voting, and block.one worryingly offered a cash reward for finding bugs in the system only a few days before launch. One programmer reportedly made $80,000 in this way.
A few days after its activation, the 21 producers voted to freeze seven accounts on suspicion of them being compromised, but they didn’t go through the arbitration process which was supposed to be central to the EOS system.
It may be as a response to these suspicions that EOS has set up an independent governance committee. Its first action will be to form five working groups. These will work on the subjects of dispute resolution, communications, GitHub code management, exchanges, and drafting/adopting its own constitution.