Fed Up and Forking: Rival EOS Blockchains Are Becoming a Reality

It can be hard to keep track of all the struggles and controversies surrounding EOS.

First came the stop-and-go launch, followed by controversy over locked accounts – then more locked accounts, this time on the orders of an “arbitrator” that many in the community hadn’t realized existed. Next came a fake order purporting to be from the arbitrator, the fallout from which led EOS architect Dan Larimer to propose a whole new governance structure or “constitution.”

Just one problem: there was and still is no system in place to vote on a constitutional change. Meanwhile the voting scheme that is in place – for choosing the block producers (BPs) who maintain the EOS blockchain much as bitcoin’s miners do – has put several BPs that aren’t following all the rules of the constitution in charge.

For some EOS community members, it was all too much.

Take Douglas Horn, who told CoinDesk:

“I’m a really big believer in the potential of EOS and of EOSIO software, and I came to believe that it was on a bad path.”

As such, Horn thought he could do better, and recently authored a white paper for Telos, a fork of the open-source protocol behind EOS called EOSIO.

And his is just one of several groups that have decided to take the software, tweak it and set up a new network.

EOS Force is another example. They propose an EOSIO-based main chain with side chains incorporating features of ethereum, zcash and cardano. Another is ONO, a social network that was going to launch on EOS, but decided to fork it instead. EvolutionOS, which aims for more even token distribution and lower RAM prices, is airdropping ethereum-based tokens and plans to launch its own EOSIO-based blockchain.

And other examples include WAX and Worbli.

Telos, though, appears to be the fork with the most momentum and support. For instance, several of its team members were involved in the EOS launch, and in more than one case, those people are helping build Telos while continuing to support the EOS network.

“We think the cross-pollination will benefit both Telos and EOS,” said a team working as Keten.io on Telos and Dutch EOS on the mainnet.

According to Horn, Telos’ launch could come as soon as next month, with the aims to make two significant changes to the EOS that exists today: curtail the power of the largest token holders known as “whales” and launch with more solidified governance mechanisms that can be enforced directly on the blockchain.

Channeling Ahab

The first thing that stands out about Telos is the decision to cap the number of tokens any one address receives during the initial distribution at 40,000 (with certain exceptions).

The idea is to remove whales from the equation – primarily because on EOS, tokens equal votes, and right now, there’s a “hyperconcentration of voting power” in the hands of just a few, according to Horn.

According to the Telos white paper, 1.6 percent of EOS holders own 90 percent of the tokens. The largest holder by far, with 10 percent of the total supply, is Block.One, the company behind the EOSIO protocol. (Larimer is Block.One’s CTO).

Controversially, the company recently announced that it would use these tokens to participate in block producer votes going forward.

To reduce the influence of these heavyweights, Telos will distribute its TLOS tokens to EOS investors according to the original “snapshot,” but with one big difference: it will lop off any holdings above 40,000, a move that Horn said would affect just 0.63 percent of accounts.

Does that mean that “communist” Telos is going to “steal their coins,” as one Reddit user alleged?

Horn doesn’t think so, telling CoinDesk, that no tokens are being taken from larger holders to give to someone else, rather the project is giving EOS whales brand new TLOS tokens – albeit fewer of them than they might have gotten otherwise.

In this way, Horn expects Telos to eliminate the chance that token holders collude with BP candidates, who can currently earn the equivalent of thousands of dollars a day in EOS coins and might share those profits with the whales that elected them.

Telos isn’t alone in worrying about this phenomenon.

One Telegram user recently wrote: “I’m sick of seeing seven voters propping up puppet BP for rewards. I consider that type of manipulation stealing.”

Additionally, block producers that are elected based on a few whales’ votes sometimes fail to do their jobs. In a recent blog post, Ben Sigman, a cryptocurrency investor that’s written extensively about EOS, claimed that seven of the top 21 BPs weren’t complying with the rules, for example, by failing to maintain a public website or disclose ownership information.

The only exceptions to the token cap on Telos, however, are the Telos Foundation itself, which is being allocated six million tokens, and the founding participants, who will split another six million. Horn defended this decision, pointing out that these tokens are less than 2 percent of the total supply and saying Telos’ founders “are putting in a lot of effort and a lot of costs.”

Ready and on-chain

Telos’ other main priority, Horn said, is that, “Everything needs to be ready at launch.”

He said it was “crazy” for EOS to go live without “all the necessary pieces in place.” Citing the arbitration system specifically, Horn said many users were confused and surprised when a largely unknown body called “ECAF” began issuing orders in June.

Horn could also have mentioned the ability to vote in referendums, which is necessary to change the constitution, as Larimer has proposed doing. EOS Nation, a standby block producer, has begun testing a system for conducting referendums, according to a roadmap published in July, but EOS users still have no ability to propose or vote on protocol changes.

For Horn, it’s also important that all of these governance mechanisms, to the extent it’s technically possible, happen on the blockchain, rather than on Twitter or in Telegram groups, where misinformation – such as the fake arbitration order – can easily circulate. (It should be noted that ECAF has since improved its processes.)

“No, no! Everything’s going to be on-chain, who said off-chain?” Horn said, in response to a question about off-chain governance, adding: “On-chain, on-chain, on-chain, on-chain.”

Telos arbitrators, for example, will be elected in a similar manner to block producers. This wasn’t the case with the EOS launch, where arbitrators were selected through opaque off-chain processes.

And while Telos’ own constitution has not been finalized, Horn emphasized that “bullshit that’s unenforceable” won’t appear in it, such as the (original) EOS constitution’s provision that “Members shall not initiate violence or the threat of violence against another member.”

The constitution should look like “a contract or a software licensing agreement,” Horn said, not “something that Alexander Hamilton [would write].”

Finally, Telos aims to increase network reliability and security by automatically kicking unresponsive or noncompliant block producers out of the top 21 slots, without waiting for a human arbitrator to weigh in.

Meanwhile, standby block producers (the 30 immediately below the top 21) will periodically have to prove they’re ready to step in, or their pay will be dinged.

Healthy competition?

Despite his criticisms of EOS, Horn stressed that EOSIO is a “worthwhile” project, and acknowledged that he and others now building Telos were themselves involved in the EOS launch.

“We’re all part of this EOSIO community,” Horn said, adding:

“We’ve had the tremendous chance to look at what was done in EOS and say, ‘Hey, if we were to start over again, what would we do different?'”

Discounting the occasional accusation of theft or communism, the EOS community has been broadly accepting of Telos – and other forks – giving EOSIO another go.

“I think that competition is good for the ecosystem,” Daniel Keyes, from EOS Nation, a standby EOS BP, told CoinDesk.

A Reddit user echoed that sentiment, saying, “I welcome the chance to see how it plays out. Perhaps they will try out some things that work and all of us can become better for the experiment.”

Fork shadows image via Ursula Spaulding/Unsplash

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