Problems of EOS (updated 6-1-2019)

jimmyfotogallery (63)in #eos • 5 years ago (edited)

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 there is a trend showing 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/Exchange (Eg. Houbi)
Collusion among BPs (StartEOS and its affiliates, Houbi and its affiliates)
Proxy buying (Eg. Dapps of StartEOS, Chaintai )
Voting by Exchanges (eg. Houbi)
ECAF and BPS dispute ( 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 may be true but it may not happen at all owing to many reasons.

Hidden cost you paid for Voting
Liquidiity need (Redemption need by institutional investors, Traders, etc)
Human nature and habbit of general people.
Money say in EOS system. Smal investor will think that their vote really doesn't matter.

Have we make any calculation about how much it cost for voting in term of one year time period? Are we ready to pay for it as one of the community members.

Our cost:

a. Time and effort for searching good BPs and keep observing their performance

b. If you vote you need to stake and unstaking need 3 days which impose liquidity loss (3 days market crash can make you may lose 50%)

c. Time cost and you need to refresh it. (votes will decay by time) Scatter now can let you auto refresh. If other tools will provide similar function it will be good.

d. 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.

e. 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 make the decision of 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 or 1 EOS 100 BP votes? We need to think about it.
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?
Can Dapps request users vote for 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 BP or even pay for their work but not willing to lose my voting or my proxy rights of 30 votes.
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? 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. 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 provided to token stakers in some game dapps. (many shit game dapps can be found recently) and tokens. Personally I do agree to encourage more dapps developers joining EOS with reasonable resource fee. From current fee shown on Chintai , they are really not so expensive. **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 buy EOS like before for getting the CPU and net resource . **
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.

8.**** ECAF- what is it and what is it for? ****

I think most of the EOS holders dont know 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. If ECAF is not, any legitimate structure within the community can serve the the function? Shall the community need to pay and set up one? I have seen many messages appearing in different BP's telegram groups.

My suggestions:

Fixed but attractive Voter Rewards after fulfilling voting criteria from System code level (not from BPs or Dapps):

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.

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 legitimatel 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 chance of whales/BPS selling its votes (now 30 votes/ EOS) to other non capable BPs for profit or intention for creating their Cartel.

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 necesary.

a. 12 months contract and re-voting every 12 months
b. Provide arbitration service and implementation. I believe that only authorized ECAF can work with top 21BPs and work together.
c. 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 EOSvibers before.
d. Paid from part of the 2-4% inflation

Better voting and 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 compensation depending on staking period like different dapps doing

Starting from 30 days, 60 days, 90 days, 180days to 360 days staking periods can be considered, different compensation rate can be adopted for different period.Then not too many EOS will be used for trading. As we know that there are over the counter markets for Bitcoin and other cryptos and whales/instituional guys can borrow them without touching the markets in any Exchange, borrow from 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 is necessary.

This can promote voting and further minimize the size of voting from Exchanges too.

Summary

There is no simple voting and governance structure which can creat 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.

**We cannot blame those bending the rules. Some big Asian countries have these traditons and perhaps some short term investors always do that. 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.