Bitfinex May be Manipulating EOS Voting System
The nature of a DAO, or Decentralized Autonomous System, has always presented the structures as a fair alternative to the traditional allocation of power within organizations. The decentralized platforms allow all holders of tokens to have a say in the inner-workings of the organization of which they are a part. This means that the hands of the company are finally placed in the hands of the people who help to fund it.
But not all is perfect within this budding blockchain technology. In fact, recent trends point to the industry digressing into experiencing some of the same problems seen in the traditional business model for shareholder involvement in the decision-making process. In particular, a trend of a minority of shareholders manipulating votes to achieve their will may be replicating within the EOS Decentralized Autonomous System.
These fears may have come into fruition with the recent realization that EOS could be using its users’ tokens to vote itself into the network. Weiss Ratings is an analysis organization which has garnered a stellar reputation in the crypto space for their work in finding and exposing flaws, scams, and problems within the community. The comments follow the company’s statement a week prior that they believed EOS to be among the most centralized ecosystems on the blockchain.
Despite their concerns, the company still managed to give EOS a B rating. They primarily prided the organization on a good adoption and integration of spectacular new technology. The company also issued a warning, however, that the technology is susceptible to the same kind of volatility native to most centralized ecosystems reliant on crypto technologies.
The EOS ecosystem continues to host voting in order to decide the things which will be accepted into the system. 24% of tokens have already voted, but voting is currently blocked for owners whose tokens have only ever been present on exchanged. But for Bitfinex, they function as a producer of blocks. And block producers could theoretically gain significant influence if they produce enough blocks and accumulate enough power.
Bitfinex has already exercised significant voting power this year, and they are projected to spend more of their votes within the system as time goes on. Over half of the company’s votes came from acquiring the tokens from “whale wallets,” or wallets holding abnormally large amounts of digital currency.
Bitfinex has a valid defense to the accusations, however. A few days ago, EOS released a new tool which allows users to vote directly through their exchange wallets.
But the accusations don’t seem to have had much of a negative effect on the EOS market price. In fact, the price of the token has gone up around 3%, up to $10.67.
Most of the criticisms of EOS come from the philosophically-inclined, older members of the crypto community. These voices have a problem with EOS’s role in the creation of crypto money that, in many cases, represents a new form of old fiat money. Still, it seems that EOS is here to stay.