Huobi Talk Episode 36: Explosive Discussion between EOS Block Producers – ECAF, RAM, Block.one Voting
Written by Huobi volunteer. Published by Huobi Pro the leading global digital asset exchange.
Huobi Pro has brought together a roundtable discussion between Block Producers and Block Producer Candidates of EOS to discuss the challenges that EOS has faced since its mainnet launch. This forum discussed three main topics bugging EOS community, namely the role and actions of EOS Core Arbitration Forum (ECAF), skyrocketing prices of RAM hindering development of ecosystem and a surprising vote by Block.one which has gotten the community worried.
The EOS Core Arbitration Forum Debacle
Context & Timeline
Shortly after EOSIO mainnet launch, Block Producer EOS42 drew attention to the fact that accounts compromised during the registration process would eventually be unlocked, leaving $15 million worth of EOS tokens vulnerable to theft. Block Producers turned to the EOS Core Arbitration Forum (ECAF) for guidance, but the arbitration body disappointed in delivering an unambiguous decision. Instead, it gave an advisory note as well as a disclaimer that it may not be in the position to give outright arbitration rulings.
In a unanimous vote, the Block Producers decided to freeze the seven affected accounts, thereby stopping the ability of these addresses to initiate and follow through with transactions. This raised hell within the community.
Decentralization purists labelled it as a clear instance of unilateral power abuse. Charlie Shrem, vocal advocate of BTC claimed that “the point of crypto is no one should have that power”, while Nick Szabo, the father of smart contracts tweeted that “under the EOS protocol you must trust a ‘constitutional’ organization comprised of people you will likely never get to know”.
The panel which included representatives from EOS42, EOS New York, EOSHuobiPool and EOSeoul shared that the unanimous decision was made because the theft of property was imminent and ECAF refused to assert their constitutionally afforded authority to review the facts and issue a ruling. ECAF refused to participate because they believed that they in fact did not possess the constitutional authority during this interim period. They later reversed this opinion and issued retroactive orders to freeze the accounts. EOS New York believed believes that where allowing the tokens to be stolen would be adhering to agreed governance to the letter, it would undoubtedly go against the “spirit of governance” that the community was working toward.
Dan Larimer, CTO of Block.one who wrote the EOSIO code believes that setting precedence on Block Producer intervention will do more damage to the entire EOS ecosystem. Instead he suggested to allow the scam to follow through and the EOS Block Producer make a charitable donation to help the affected instead. This did not come to pass.
Is the Role of ECAF a “Special Advisor” or “Supreme Court”
In this period where the constitution of EOSIO has not been ratified, what exactly is the role of ECAF, and are the advisory issued from ECAF binding? EOS42 thinks that in view of the proposed amendment to the constitution and suggestions from Dan Larimer that Block Producers should not just execute ECAF arbitration orders without question as is in all their codes of conduct, the community need to ratify one or other constitution as a priority. This will then give BPs clarity on whether they should continue to execute all orders, decide after assessing the situation and possibly even applying a veto with justification. EOS42 agrees with Dan Larimer’s viewpoints where he argues that the “Intent of Code” is law, and that it is essential to get to the intent of 2 parties and may be the single best thing to implement at this stage.
Denny Wu, representative from EOSHuobiPool likened ECAF role to be either a “special advisor to Congress” or as a “Supreme Court”. Naturally, the Block Producers make up “Congress”. This analogy towards the US political system holds up, as the issue now is ought ECAF advise or override? EOSHuobiPool opined that ECAF should hold a strictly advisory role.
What Use Is Arbitration if it is Not Binding?
The panel questioned if arbitration is not binding, what use is that? In the real world, arbitration is binding, and the decision-making an independent process. EOS New York pointed out that both parties must first agree to arbitration before the signing of the contract. In addition, the rules and procedures of the arbitration must be decided upon before there is a need for arbitration. It is agreed to ex-ante, not ex-post.
Should There Be Binding Dispute Resolution On-Chain?
The panel agreed that dispute resolution is best on-chain because there is no court anywhere else that can compel EOS Block Producers to do anything. There has to be authority EOS users can rely on, and the on-chain answer is the straightforward one.
Is Ricardian Contract the Answer? Intent of Code Matters More.
Dan Larimer suggest the answer to aforementioned may be Ricardian Contracts. A Ricardian Contract specifies both free-form terms as well as code terms. The purpose of the Ricardian contracts is to document the intent of the parties and provide evidence of intent in the event of a bug. If a Ricardian contract includes terms that cannot possibly be evaluated and enforced by the code then it is outside the jurisdiction of the block producers and community arbitration to evaluate and enforce.
The limitations of a Ricardian contract are that when a Ricardian contract would like to enforce laws that cannot be coded, then it must do so by defining the process within the code, and somehow be able to enforce them. However, this should not be on the base protocol layer but as an application layer, opined Dan Larimer.
EOS42 agrees with Dan Larimer’s viewpoints stated in his Medium post, where he argues that the “Intent of Code” is law, and that it is absolutely essential to get to the intent of 2 parties and may be the single best thing to implement at this stage.
Meanwhile, Is Execution a Problem – Mistaken Identity and Miscommunication?
There was no chance during the panel to question EOS New York on its announcement to suspend orders coming from ECAF following a hoax ECAF order. The intention of the suspension is due to EOS New York inability to tell which orders are legitimate.
EOSStore also made the news for missing an announcement of the second ECAF orderand not executing the blacklist. This resulted in a blacklisted address continuing to be in processing, since blacklisting requires all Block Producers to act unanimously.
Who Holds the Power in EOS? Token Holders, Block Producers or the Constitution?
The panel meandered into a philosophical discussion on which actors have a grip of power in the EOS community. This sparked great debate. EOS New York believes that power comes from the constitution and the token holders who will ultimately vote on it while EOSHuobiPool believes that power stems from the token holders. EOS42 tangentially agreed with EOS New York and repeated calls from Dan Larimer to ratify a version 2 of the constitution that would offer clarity and introduce arbitration controls, such as to minimize subjective unilateral arbitrating interpretation. Hence, conducting a referendum and passing a constitution ought to be the first order of business, in EOS42 eyes.
Block.one Taking Over the Block Producer Voting with 10% of Available Votes
On Jun 28, 2018, Block.one announced that it will begin to stake its share of tokens to vote for the 21 Block Producers. Their stake is humongous, with a stunning 10% of the initial 1 billion EOS token allocation in their control. With roughly 275 million tokens being staked as of writing, the 100 million shares Block.one has will equate to roughly a quarter of voting power for 1 entity.
The panel in discussion termed Block.one’s move as playing kingmaker and indeed it is. With a quarter of the voting power, Block.one can in theory handpick the 21 Block Producers they fancy. More alarming is that Block.one has previously claim they would like no involvement in the launch of the EOS mainnet. EOS New York shared that Block.one probably wanted to create calm and introduce a change they wanted to see. There is nothing stopping Block.one from doing that, since they are indeed token holders.
EOSeoul & EOS42 cautioned that Block.one should use their votes sparingly to minimize the changes to the token economy or onlookers would end up looking at a monopoly, with EOS42 adding that when Block.one votes for 30 Block Producer candidates, the Block Producer voting results get concentrated by the ones they voted for. The rewards are also affected. Previous attempts to flatten out the rewards have been undone by Block.one voting for Block Producer candidates. EOS42 opined that Block.one should only act in the defence of the constitution.
EOSHuobiPool sounded the alarm by pointing out that Block.one holds enough tokens to pass referendums unilaterally. If they decide to vote, then the bar to pass measures must be raised. All in the panel agreed that the intention of Block.one in voting has also been clouded, which raises worry. EOS42 concluded that although Block.one were the original creators of the software, it does not change that they are a large token holder, so as long as they act in the interest of EOS and their intentions are clear, EOS will be fine.
Is EOS RAM Market the New Gold Rush?
What Role does RAM Play in EOS Ecosystem?
Full nodes are expected to have an amount of RAM for maximum performance. The amount of RAM can be configured. The RAM is required to store account information such as keys, balance and contract state. RAM availability is scarce, as a single computer RAM is limited by Moore’s law.
EOSIO adopts a free-market approach to allocating RAM.EOSIO system contract allows users to buy RAM from the system and sell RAM back to the system in exchange for EOS Tokens. This provides liquidity in the RAM market while working towards price discovery. The algorithm used for in this instance is known as a Bancor Relay.
A Bancor Relay does not set the price of RAM. It merely offers to buy and sell at previously established market rates. Anytime the current market rate is different than the current price offered by the Bancor Relay traders will buy or sell RAM pushing to closer to the market determined price, in effect, arbitraging.
Dan Larimer has been clear that he would leave the price of RAM to the free market to decide. eosDAC has concerns about whether or not the current RAM market is a healthy, functioning free market. There is no futures market; no way to short the market; and the amount of physical RAM available is finite. He opined that the reasonable price should be one that is benchmarked on competitors’ transaction prices like that of Ethereum.
What is the RAM for?
When users want data, the user cannot query the entire Blockchain because it takes too long, so it will have to be stored in RAM and be accessed from the memory. Every single piece of data is replicated in the RAM of every node and that’s why keeping data in RAM will be expensive. As Dan Larimer quoted “RAM is meant to be used for developers who want to build real things to make everyone’s lives better”.
Unfortunately, things do not look so rosy. Speculators have started to hoard RAM and in turn drive the prices of RAM on an uptrend. The panel agreed that this is bad for the ecosystem as the price of RAM prohibits developers from building applications in the ecosystem. EOSHuobiPool insists that long term price stability is needed so that developers can predict the cost of operating. EOSphere admitted that Block.one wanted to use a rare resource like RAM as a currency and it started off with genuine intentions but has been warped by speculators.
Are Sidechains the Way to Bring RAM Prices Down?
EOS Asia proposed that proactively adapting to the spike in RAM prices through sidechains and demand management may work. EOS Asia shared that they are exploring a plan in getting some Block Producers to run the sidechains as well as to encourage developers that have been so far on the fence due to the RAM prices to be able to dip their feet into the EOS ecosystem and start developing. eosDAC added that the proposal may allow the standby Block Producers to contribute in creating sidechains. A word of caution from EOSphere is that there may not be the smart contract architecture to allow sidechain-mainchain integration.
The panel noted that Dan Larimer wants to adjust the algorithm to increase slippage and dissuade speculators and keep the price more stable. All present then concluded that the greatest impetus is to get developers on and not allow them to be dissuaded because of these issues, to further grow the EOS community.
Real Learning from Deep Discussions
If you enjoyed the hearty debate on the deep level talks during this panel between Block Producers, make sure to catch the other Huobi Talks hosted by Huobi Pro. Huobi Talk invites the movers and shakers of the Blockchain world to discuss pertinent issues affecting the Blockchain space. Receive up to date news, key insights and unparalleled access into asking your burning questions.
This episode panellists include the following:
EOSHuobiPool Denny Wu, Operations Manager
EOS42 David Packham, Head of Strategy and Community
EOS New York Kevin Rose, Co-Founder and Head of Community
EOSeoul Eliot Dongwon Shin, CEO of EOSeoul China
eosDAC Luke Stokes, eosDAC Launch Team
EOS Asia DaFeng Guo, Co-Founder
EOSphere Ross Dold, Co-Founder
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