Colin Talks Crypto Fights for Better Governance Practices
Colin Talks Crypto (CTC) has recently made significant progress in his endeavor to fight corruption and establish a fair proxy voting practices on the EOS blockchain. We have written several articles about some of his attempts to solve governance issues. You can read them here and here.
Among other details about his philosophy and stance when it comes to picking BPs in his proxy, Colin suggested the following. In the long-run Colin is not a vote buying (or vote rewarding) supporter. But because EOS was built in such a way that it permits vote rewarding, Western BPs should pursue it to continue a head-to-head competition with their Eastern BP counterparts to avoid geographic centralization and proliferation of BPs that don’t add value to the blockchain.
New Vote Rewarding Proxy
Last night Colin made an announcement that he is launching another proxy that will reward its constituents. You can check out his announcement in this quick video:
The idea is very simple. The methodology that CTC uses to pick the BPs he votes for will remain the same with one addition. He will continue voting for the value-adding BPs just as he does using his original proxy. However, the second decisive factor will now be whether the BPs participate in a profit share program with the voters.
For any incremental profit that a participating BP will receive as a result of CTC Reward Proxy, that BP will share 80% back with the voters and keep the remaining 20%. Here’s Colin’s explanation from the BP instructions page he put together:
When the CTC Rewards Proxy votes for your BP, your rank and pay will increase with each token voted to you.
As a BP, you can keep 20% of the increased profit (profit increase caused by the proxy’s votes). And 80% of the profit increase will go back to the voters in direct, daily payouts.
This is a win-win for the BP and for the voters. Your BP increases its rank and its pay, and voters get a reward for helping you. This also incentivizes new voters to take part in voting for you when they weren’t incentivized to do so before.
Vote Rewarding – a Divisive Subject
Vote rewarding however, is a controversial and divisive subject. Not everyone in the community agrees with the concept. In fact some feel that vote rewarding is equivalent to the race to the bottom. This is because BPs compete against each other to pay back to the community larger and larger share of their profits leaving them with little capital to invest in the infrastructure to support the chain. Thus, the value of the network over long-run deteriorates.
One of the most vocal critics of vote buying is Rob Finch, CEO of Block Producer Cypherglass. In this telegram group he had the following to say about Colin’s proposal and why he refuses to take part in it:
It is a game I refuse to play because I have seen the end game in other chains like Lisk. It always ends in a race to the bottom and the chain suffers in the long term. There is not a single DPoS chain that has not suffered due to vote buying. It makes way more sense to change the base layer incentives to change the behavior, but of course that will require the consent of 15 of the Top 21.
I am a long term investor in everything I do, not a short term flipper. If something has been proven to harm the long term value proposition of an investment or business venture, why would I further the race to the bottom by joining in just because “the other guys are doing it”? It doesn’t make any sense.
We founded Cypherglass with a set of core values, and we are going to stick to those values by doing what we believe is best for the long term health of the ecosystem and community.
Take a closer look at Colin’s new proxy proposal and see for yourself which side of the argument you support.
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