Controversy has been brewing on Twitter in the last few days as details emerge regarding the modus operandi of EOS’ block producers, and in particular Huobi.
The Huobi exchange acts as one of twenty-one block producers on the EOS network, and is now coming under allegations that it has been buying and selling block producer votes.
You Scratch My Back…
As detailed by Twitter user Maple Leaf Capital, an apparently loyal EOS community enthusiast, this recent article covers the extent of the collusion. The article even shows the cold, hard numbers, as block producers cut each other percentages of EOS returns in exchange for BP votes. Maple Leaf Capital provided coverage of the Chinese article for English users, stating:
“The 2 allegations by the article are (a) Huobi and many other BPs mutually vote for each other to cement their BP position, and (b) Huobi openly votes for a few bp candidates in exchange for EOS returns.”
Maple Leaf Capital continues:
“In allegation 1, Huobi votes for 20 other BPs candidates where 16 of those vote for Huobi as well. As you can see in the image attached to this tweet.”
Another image included in the article shows the percentages that EOS block producers negotiate with each other in return for votes. Essentially it’s like Don King taking a cut of a young boxer’s purse. In the case of Huobi, according to this article, that cut can reach as high as 170%.
“In allegation 2, Huobi votes for eosiosg11111, cochainworld, and eospaceioeos in exchange for 170, 150, and 50% of the returns respectively, as shown below in the tweet.”
Huobi Pool Tokens
The controversy doesn’t stop there; Maple Leaf Capital went on to break down how Huobi’s issuance of the Huobi Pool Token (HPT) essentially amounts to EOS vote buying.
One of the ways in which users can earn HPT is by locking up their EOS on Huobi for a set period of time. That means Huobi now has access to more EOS, and more influence, on the EOS network – meaning that Huobi is essentially exchanging HPT in return for EOS delegation.
The situation is muddied further by the fact that the individual EOS holder forfeits their EOS voting power when they lock in their funds to Huobi, giving the block producer free reign to use the votes as they wish.
“To which I ask, how is this not vote-buying? Can someone explain to me how Huobi is getting away from this blatant offense and whether I’m understanding it incorrectly?”
Predictable, says Buterin
As of yet no-one has been able to point holes in the theory, and Ethereum creator Vitalik Buterin saw fit to offer up a wry: ‘I told you so’ on Twitter.
In response to the lengthy thread, Buterin tweeted:
“Interesting! I mean, it was completely predictable and I did predict it, but I did not expect it to happen so thoroughly and so soon!”
With no response from Huobi or EOS at this time, stay tuned for further developments.
Featured image courtesy of Shutterstock.