By
Bhushan Akolkar
April 22nd, 2024
EOS prices have reached its yearly low. The coin traded today below $3 amid heightened tensions within the EOS community. While the network boasts faster transactions, decentralization woes plague the network.
Starteos, a block producer for the EOS blockchain, has openly offered to share part of its income with users. This is significant because it suggests that the EOS network, which is one of the most valuable blockchains in the world, is not, in fact, ddecentralizedor democratic at all, contrary to its own claims.
It is also important because of the size of the company. This Ethereum-esque blockchain network, raised $4 billion during its initial coin offering, and its token, EOS, has a current market value of $2.5 billion.
With its election system, the EOS network always claimed to be a highly democratized network because, just like the Tron network, it lets the users vote on the companies that they want and, therefore, it works just like a representative democracy.
However, only 21 users/companies verify all the transactions that happen on the EOS blockchain, a fairly small number of representatives. In Bitcoin, anyone can do it, for instance. These are different systems and both are ok but not without their issues.
Starteos, one of the official sanctioned nodes which can approve EOS transactions, said in a Medium post Nov. 27 that “after delegating Starteos.io as proxy, you could get continuous and stable EOS revenue.”
The Chinese outfit, which has yet to comment on allegations it runs against decentralized and democratic blockchain procedures advocated by EOS itself, framed the revenue scheme as a reward for token holders.
“The ‘winter’ of cryptocurrencies has come. How much faith do you left to (sic) have? Now, Starteos is still gonna stay with YOU, our most important and best friends! And we gonna share the proceeds with you and make through the difficulties together.”
EOS is declining by over 10% in the market today. As the overall crypto market is under the control of bears, the cryptocurrency has become one of the top losers in the market today. A massive selloff has caused the digital currency to smash through the oversold territory.
Sellers are pushing the crypto asset down after it faced consolidation at the beginning of the day.
EOS runs on a system called delegated-proof-of-stake, which basically means that the only power users have to verify transactions and make decisions regarding system updates is by voting for a representative to do it for them. Like with other cryptocurrencies, processing transactions brings in an income. Unlike other cryptocurrencies, these 21 nodes are the only ones that can process transactions, and so earn approximately $10,000 a day.
In October, Block.one, the developer of blockchain protocol EOS, was accused of allowing voting manipulation on its network and participation in a collusion.
The statement was signed by Block.one’s CEO, Brendan Blumer. It read:
“We are aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims. We believe it is important to ensure a free and democratic election process within EOS and may, as we deem appropriate, vote with other holders to reinforce the integrity of this process.”
Just for a reminder, in November this year, the independent benchmark testing dubbed the EOS platform as a cloud service built with a centralized design that suffers from serious security breaches.
As a part of its testing procedure, Whiteblock created a working replica of EOS and applied real work simulations to determine its performance and access its abilities.
The test measured the performance of the EOS network in terms of its transactional throughput, its resilience to adverse network conditions, the effects of variable transactions rates and sizes on the network, its average transaction time, its fault tolerance, and its partition tolerance.
A few months ago Coinspeaker reported the EOS started out as an ERC20 token but migrated to its own platform. The team behind the EOS mainnet has promised the platform to have an advanced level of security along with tremendously high transaction rate.
It was a matter of time before such vigorously claims have wrought the attention of blockchain testing firm Whiteblock Inc. that decided to analyze the EOS capacity.