Since the EOS Token Generation Event (TGE) back in 2017-18, commonly referred to as an Initial Coin Offering (ICO), Block.one has been cast into a situation that makes for a great scene. A scene where in order to win, they need to pull out some great performances. I’ll elaborate on that later on. First let me provide some context to the situation we’re in as EOS stakeholders.
On Tuesday, April 14, we ran a poll on our Twitter. Here’s how it went down.
For us, as the audience, the choice was for one or the other. For Block.one, they have the benefit of both. But that’s not necessarily as good as it may sound. With our choice on the poll, we had to simply pick one and wait for 10 years to recoup our funds. But Block.one are held to a much greater responsibility than that.
Uncovering Block.one’s Position
Ever since they raised $4 billion from the EOS ICO, Block.one has dealt with its own fair share of criticism from all angles imaginable. Not unexpectedly, as $4 billion is an insane amount of money, especially when considering that this is a company that had not produced a single product at that point in time.
For one, $4 billion raised in an ICO is more than twice the amount raised by the second biggest ICO. Also, it is vague whether Block.one are obligated to use those funds in any other way other than benefiting themselves. This creates an uneasiness among some EOS token holders, and to onlookers this all sounds ridiculous.
Secondly, another concern that’s often raised is Block.one’s total stake in the EOS network. They have a fair share of 9.5% of the total EOS supply. Depending on who you ask, this is either a large stake, or an insignificant one, at least when it comes to governance influence. Because of how EOS governance is structured, any large influence on network governance a 9.5% stake might have, is quickly diluted to have much less of an effect through the voting process. But that’s a different topic – Block.one voting for BPs.
Thirdly, Block.one cannot be in ownership or control of the network. The network does and will always operate in a decentralized manner. Only thing Block.one can control is how efficiently they can create value for this network so that it can give value back to them – in relation to their connection with it via their EOS stake.
Both the $4 billion and the 9.5% stake has its critics. They’re both worth a large sum of money, yet not worth as much in terms of governance influence, and worthless in controlling the network. Used in unison though this is great power Block.one is wielding, but unfortunately for them they can use this power one way. There’s the expensive legal backlash from a global community they’d have to contend with if they “exit scammed”. So there’s very little incentive for taking that route. What other options do they have?
As EOS investors who participated in its ICO, we had nothing to reassure us that we’re buying tokens of value except our faith in the characters of Dan Larimer and Brendan Blumer to carry out what they promised. Again, because of EOS’ decentralized nature, they do not have control over the network thus trust plays a big role. The same way we place trust in Block Producers to continue to represent the needs of the voters and the well-being of the entire network.
Now referring back to the poll, Block.one also has the option to sit and do nothing until their 10-year vesting period is complete for them to regain full control of their EOS stake. But that also doesn’t play well for them. Sitting and doing nothing would create the same expensive legal backlash that taking off with a 4 billion dollar cheque creates.
Did I mention this sucks if you’re Block.one? You’ve already been paid but can’t cash out. Just think of the hundreds of projects that raised millions in ICO funds and then disappeared to paradise.
Well, game theory then dictates there’s one option that creates a ‘win’ situation for everyone involved. That is; Block.one needs to use the entire $4 billion – as effectively as possible – in order to create as much value as possible for their 9.5% stake. Even if they’re selfish about it, EOS token holders would still reap the benefits from this selfishness. In fact, the more selfish/greedy Block.one is about creating value for their 9.5% stake, the more well off token holders become.
However, although selfishness/greed plays well in the short term, it spells doom for long term stakeholders. For example, say Block.one uses that $4 billion to pump it’s own bags over the next 10 years. Sure, the EOS price would rise exponentially, but it would create little value to the blockchain itself, making this exponential growth artificial and vulnerable in the long term.
A Race Against Time
With all things considered, Block.one is under immense pressure to deliver the best results they can for the EOSIO ecosystem, not necessarily for our sake, but because that’s the only way their 9.5% stake maintains value in the long term. People want mass scale applications? So does Block.one. Worried about the EOS price not rising fast enough? So too does Block.one. One could even argue even more so for Block.one because they have much more at stake than the average token holder. The mere fact that they haven’t tried to artificially pump the price, goes to show the sheer integrity of its leaders.
Whether Block.one put themselves in this situation, I wouldn’t be surprised. The company is filled with geniuses and visionaries capable of drawing up this scenario well ahead of time. Regardless, this is a win-win situation for them and EOS stakeholders, because for either to be well-off than in 2018, value needs to be driven back to the EOS token.
When we helped raise a record smashing $4 billion, it was to place it in the most capable hands, specifically Dan and Brendan, to drive value back into the EOS token. When you have a strong community capable of raising $4 billion, and a company that’s most capable in ensuring that those funds are used to deliver the most impact, then you have a winning team. Today smashing records has become an innate feature of EOS(IO).
Although the $4 billion is Block.one’s to do with as they please, it’s not really theirs or at least doesn’t feel like it. To a certain extent the funds raised in the ICO belong to the EOS(IO) ecosystem – all of us. Thus it plays in very well that they own a sizeable stake in its ecosystem for all the value they provide to it. Block.one does not and cannot own or control EOS. The only way they can benefit is if EOS is worth the effort they’ve put into it in the end.
I hope this article helped explain how Block.one’s goals and desires are very much aligned with those of EOS token holders. As much as Block.one is a company that builds valuable infrastructure and products for this ecosystem, it still is its biggest token holder, with much more to lose than any of us. We may have doubts at times, especially during bear markets, but we should remember that Block.one will always do what’s best for its EOS stake. In other words, Block.one is stuck with us and we’re stuck with them. The only way they succeed is if EOS token holders succeed.
I honestly wouldn’t wish to be Block.one right now. They’ve taken all this pressure and all token holders have to do is wait and hope it turns out well. But in all fairness we as token holders also play an important role in testing out the network and providing feedback on what works and what doesn’t. The more we participate in growing our network, the quicker we can all reach our goals. We are all Block.one and Block.one is Us – bonded by EOS tokens. At least that’s the way I see it.
Thank you for reading!
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