The EOS User Agreement has been signed today by 21 Block Producers and it replaces the now EOS interim constitution as a governing document. The whole process has been widely debated for months and the decision has been made. The token holders remain the major force in the Delegating Proof of Stake consensus mechanism behind EOS, but more governance involvement is needed.
The EOS constitution
When the EOS mainnet was launched in June of last year and the crypto community got to know about its constitution, there was a big mediatic attack on EOS for introducing this kind of document to the blockchain space. The EOS mainnet barely reached the 15% threshold needed for chain activation, and soon after the users started bringing up the cases for the ECAF consideration. The bringing up of everything to the ECAF created the dissent in the community, and after just a few weeks, the same Daniel Larimer decided that it was better to change the constitution. From that time on, the active members of the EOS community have been involved in finding a solution to the constitutional crisis and today the new EOS User Agreement (EUA) has replaced the EOS interim constitution.
Two months back, EUA had been proposed as a referendum of which final date for approval must yet pass. The deadline for this is on the 8th of May. A total of 17,624,997 tokens have been involved in the voting for EUA with 99% of Yes votes over No. This means that the proposal has collected just 1.7% of tokens participation while for the referendum to be deemed as passed. It will need 15% maintained for 30 days in the 3 month window period and with another 10% more of votes Yes over No.
The referendum bar has been set very high and no referendum proposal has reached such threshold yet. The most voted proposal, which would direct additional funds to the REX pool, has 2,33% token participation and the deadline for this is on the 12th of May. Unless more voters cast their votes or some whales start voting, this proposal will end up dead in the water.
In this scenario, BPs are faced with the difficult problem of blacklisted accounts left out. ECAF decided to take things in their hands and put the EUA up for 21 BPs approval. This means that the BPs themselves change the system without waiting for the referendum results. The critics of the EUA have argued that it is missing the BP Agreement mentioned in the same EUA. Others argue that the referendum should be used as the main signaling instrument rather than the governance by the BPs who are backed by the token holders, where the majority are whales who have a true influence on the rankings.
The proposal has been signed just one day before the deadline. The 21 BPs out of 30 who signed the EUA are: eosnewyorkio, argentinaeos, cypherglass, eosnationftw, eoscafeblock, atticklabeosb, eosflytomars, eosbeijingbp, eosbixinboot, eoshenshenio, eosdacserver, eosiosg11111, eosauthority, eos42freedom, eos.fish, eosriobrazil, eoscannonchn, eoshuobipool, cochainworld, jedaaaaaaaaa, and bitfinexeos1.
“The supermajority approval of the EOS User Agreement represents the first time the EOS Mainnet has had a properly ratified agreement in place as part of governance. This forms a stable foundation upon which future amendments can now be proposed and made as EOS and the community needs to develop out” – said David Packham form EOS42.
BPs are simply putting Delegated Proof of Stake into action, in spite of the fact they pledged to attain to the rules set by the previous constitution. It seems as though things are not so black and white as one would think.
The hurdles behind the governance
The overall situation with the interim constitution is not so easy. The rules have been proven to be unenforceable. The ECAF itself had little power to enforce anything if BPs didn’t agree. Its members were appointed rather than voted in by the token holders and the threshold for changing the interim constitution with another kind seems very high. The EOS community has finished in limbo where the rules have been disregarded, where certain things have been passed directly by BPs vote, but the more important changes stall while waiting for the referendum to pass.
The biggest hurdle though is the blacklist backlog which accumulated hundreds of cases filed by the users who have been phished, hacked, or scammed. It is unknown what steps will be taken to resolve this issue. Luka Percic from Chainrift BP said that the available options to resolve blacklists are:
“either by nulling keys, key switching, or signing in random standby testing, which would clear out the transactions from those accounts instead.”
Whatever the outcome will be, the EOS community is on a new journey where “pure DPOS” in action and where BPs, backed by their voters, will decide the path. Until more voters participate in the referenda, they will be used as a mean of signaling for BPs. As a general rule, they don’t base themselves on the token holders’ will to make decisions, because the participation is too low to provide a valid point for consideration.
This doesn’t mean that the token holders have no voice. They can simply stop voting for those BPs who are not acting according to their desires.
The EUA has been written by EOS New York and the signing of the approval for it to become the EOS mainnet governing document is considered a success by them.
Kevin Rose from EOS New York said to eoswriter.io:
“Governance is, very simply, the collective decisions we make, the mechanisms we leverage to make them, and the methods we use to enforce those decisions. The common document for EOS is now one that is clear, reasonable, and enforceable with regard to all three of those pillars. From here, we can focus on building solutions that leverage the powerful features of EOS with regard to governance challenges. The more of this process that is transparently on-chain the better.”
The BPs decision to change the interim constitution with EUA could be described as courageous because the lack of referendum signaling from the token holders meant that they had to rely on their own opinion regarding the EOS network future. Being in the top 21 means that they already had the support of their voters. They risked those votes, and it would seem that the outcome was good as there’s no significant evidence that some BP has been voted out for this choice. It is also true that to see a significant change in the rankings, millions of EOS are needed and only a big proxy, a whale or many token holders together could shake up the things.
Resources Exchange (REX) which will distribute a common pool between the token holders lending their EOS could bring more participants to the network as it requires the delegating of their voting power to a proxy or voting for at least 21 BPs.
Token holders’ participation is essential in the EOS governance and whoever cares about the token price should get involved in it or, at the very least, delegate their voting power to a proxy.