EOS Governance - A revolution in the making.
By Ravi Narayanan.
Dan Larimer had a calling in his life when is his life, liberty and property were threatened and affected by some archaic governance processes that did not lend themselves to flexibility or the adaptation to individual circumstances. Hence his crusade with EOS for protecting the rights of everyone, their life, liberty and property. At least, this is what I have gathered from reading some of his earlier posts about his life and how he went from being a well paid professional to almost a homeless and how much he had to fight for his own individual family rights in a regimented legal system. This being the backdrop behind EOS, I believe the same values that Dan Larimer had aspired for should carry on effortlessly into the floating of the EOS blockchain itself. But when the rubber meets the road, it is not all that easy as the words we fluently speak. There are a lot of cooks here and we ought to know that to make a good pudding we need a lot of creativity, passion and open cooperation to our approach. So, with this spirit in mind, let me make my own observations and leave the evaluation of their worthiness to the best judgement of all involved in this community.
My roaming thoughts are those often concerning how effective the present thoughts of majority of block producer candidates are about the governance process. Are they the only ones deciding this? Is this even being looked at by a larger group of academics (in fields of education, marketing, social sciences, legal) or established governance experts in various fields of industry (in finance, healthcare and other fields) who may have valid opinions to give as input here? Should Block.One promote some seminars or fund some initiatives at academic institutions and outside for this purpose of researching the blockchain governance models? At present the productive discussions we are having with those in the top echelons of Block One (Dan and Thomas Cox) and the ardent techies at the block producer want to be's seem to be moving us forward for the time being. Dan and Thomas have been the best facilitators and harbingers of change that EOS wants to bring about. Without their kick starting none of this significant progress would have happened. In my best observation, Thomas and Dan are highly detached and objective individuals with no personal bias and who would rather be happy to see their baby grow with the free choice of the masses paving the way for its future course. Life is an experiment in growth and a process of growth. Hence, I believe this process of the constitution making and the evolution of governance structure should be a continuous process and a constant dialog must continue between different sections of the constituents and also with those who can take a more objective and educated view with their experiences in different spheres of knowledge. We should be able to dismantle governance structures that no longer make sense as much incorporate new governance structures as needed with ease.
What we want when it comes to a democracy is more open discussions and bold decisions than a mute following and idol worship. Freedom should not be overly curtailed by fear of some obscure legalese or fear of an over powering enforcer. Should some new models of block producers be discouraged by the consensus of current block producers? Obviously, if economic disincentives are put in place by current BPs or the constitution, that would be a discouragement for further innovation and evolution of the network. Arbitration may come to rescue in such circumstances but only if the arbitrators are totally unbiased and espouse the same values and be understanding of the deep issues involved to solve such disputes. Do we need to go through a more thorough GRC (Governance, Risk and Compliance) analysis process? Or is it better to let the EOS network grow organically without an overly coercive constitution?. I am not talking about things that relate to content management, data governance or censoring etc., which are a totally different procedural concern. I am talking about how much power to vest in the current constitution as it is written now and how proportionately and appropriately we acknowledge the power and rights that are vested in the tokens that the voters or holders or hodlers carry. The decisions we make on who we empower and how we empower will have far reaching consequences on the final outcome.
The success or failure of Governance process will have direct consequences to the success or failure of EOS network and its market valuation. True freedom to me is to be able to speak against common consensus when it makes business, ethical or moral sense to do so taking into account a bigger picture of success. We all are dreaming at a bigger picture for EOS here, but the consensus that is developing may not be happening with a bigger view of the larger public than just going by some common accepted norms and consensus of a few who will be operating the machinery of this blockchain. This is the pitfall we should be afraid of and seek some external unbiased opinions.
One question that is looming large is - Whether the current players in the governance space are taking into account the interests of the large size token holders (about 250 at present) or are they averse to the whales as is a common way to call the large holders? If we are averse to the whales, it could really be a bad thing for a democratic governance. Any democracy should allow sufficient number of whales to exist and encourage more whales to participate collectively so that it does not become a monopolistic venture. I believe that there are sufficient number of large eos token holders at present that there is hardly any risk of centralization. May be the risk of centralization can be further warded off by increasing the number of active block producers and standby block producers by some heuristic algorithms or by a general voter referendum. At least the openness that Thomas Cox had shown in some of his posts and Q&A about the DAC BPs being an option is a little heartening to hear. I truly believe the existence of eos42, eosdac and other such block producer choices will truly give an option to the token holders on how best to use their tokens (whether to lock them up for six months or be rewarded in some way as a minute and proud participant block producer). Finally, what we are talking about here is the financial inclusion of all in the growth and prosperity of the network. At BlockPro we fully intend to cooperate with such non traditional block producers and their business models and enhance the ecosystem in a more open democratic manner.
Let us not leave the common man who has not yet spoken out of the mix here. Have we conducted a poll of the majority of small token holders and found out what their preferences are about the selection process of the Block Producers? Should the whales be barred from voting - this is obviously one of the items being brought up by some BP candidates who do not personally hold much stake in current EOS tokens but would rather want a larger pie of the block rewards. This approach could make bigger whales out of the block producers over a period of time with the inflation enriching them as is the case with the central banks. Is it appropriate to call sharing of block rewards by a Block Producer as giving kick backs?. What incentive does a voter have to vote other than some pie in the sky claims about increasing the network and token value that can be achieved by their locking their tokens for six months with no promised returns with the risks of market value changes or some BP business failures? Should this six month lock up be set in concrete or can it be left to the discretion of each individual block producer or be fully flexible for the voter to decide? These are questions that are better left for to the larger community to decide and I believe cannot be enforced in any autocratic manner. I hope the community is able to come to an understanding and consensus on having a flexible policy to handling such sensitive matters that affect a token holder's or voter's liberty and property. Being good to each of ourselves in our own community of various EOS participants is more important before we reach out to the larger world community of our users preaching the same values.
If we are building a decentralized and crypto-anarchic (in a good way) ecosystem, should there even be overly stringent constitutional rules to start with other than say some guiding principles, a process set in place and education of the block producers and voters/token holders of this. How far should the EOS network be an autonomous and independent entity without being subject to undue governmental and jurisdictional pressures that interfere with its main business of bringing equality and protecting people's life, liberty and property? Does such an effective operation require that all the Block Producers should register themselves in jurisdictional areas that keep them outside of the coercive pressures of a few governments? Should all follow the block producers incorporate in a friendly jurisdiction so we can get on with the main business more easily? The risk of some unscrupulous regulators or politicians making a statement against EOS blockchain or network could be as disruptive to its functioning as the Texas ruling was against BitConnect. Though there was wrong doing in one case the markets are the impetuous and some governments do not make discerning choices at times. Any adverse comments by any one regulator in a far off corner of world is unfortunately having a ripple effect and there could be a risk of the entire network being brought down if the legal jurisdictions are not chosen properly by the block producers. Hence the question - should we not allow the incorporation of block producers in some crypto unfriendly countries? What guidance can Block.One give in this regards or can some of this be mandated in the constitution for the eligibility of BP candidacy? I know, I am opening up a lot of concerns here - but the avoidance of geopolitical risks could be a very important factor and worthy effort in the continued growth of the fledgling blockchain.
There have also been some indications that each BP could vote for 30 other BPs and also an article written by Eva ( ), about the DApps being potential voters of Block Producers. There is a downside to the BPs voting for other BPs. It could be a causal factor to a monopoly of a few block producers or an oligarchy in the making. DApps as voters (meaning the users of the DApps or the producer of the DApps as a delegate of the users?) could wield considerable power in the election of BPs but is it a desirable objective? Many users of DApps would hardly ever know anything about the technical details behind each BP's operations and the process will most likely be delegated to the DApp developers which can lend itself to some deep seated connections between BPs and DApp developers as a deciding factor in the voting preference. If it has to be a popular referendum, then the BPs will need significant amount of marketing capital to get their message across to the voters. With the growth of the network and DApps, the amount of users could far out number the tokens and token holders outstanding. In this case, we are looking at a totally different dynamics of how the Block Producer has to go about seeking votes to retain their position. These matters concerning BPs voting for BPs and DApps voting for BPs should I think be a matter of a separate discussion by all concerned.
There is a war raging in the EOS world about its governance and constitution these days. The very choice of deciding who conquers the main chain is depends on the majority of voters who vote for a chain out of the total tokens. If the whales are left out then it could so happen that there could be a fork or a separate the whale chain may form. Then all the constitution building efforts of the small fishes could come to be not much use. The whales can develop their own constitution and work towards a free market economy where operational efficiency and token holder satisfaction and returns could become something of paramount importance. Some thing of the way the capitalistic system works. The growth of the data centers and BP infrastructure would nevertheless continue as also the proliferation of DApps more by competitive means and processes. This could turn out to be a good thing for the ecosystem as well. Block.One as they are untying themselves to the main blockchain as of the release date, still trying to over-regulate the freedom of the blockchain evolution could have its own consequences. The question is can we all get into the water without rocking the boat too much?
I believe that in the final analysis, we should take a balanced view of all the participants in the EOS ecosystem - the small token holders at large, the larger token holders, some whales and the block producer candidates whose only means of survival is block rewards. Such a governance approach which does not discriminate against any faction and an ever expanding decentralization beyond the current limitations of 21 active and 100 standby producers - can definitely bring in a market equilibrium. When such a thing happens, I see a thousand AWS, Amazon, Googles and Facebooks working in a decentralized manner in a true world of common wealth under the shadows of the EOS network.
Ravi Narayanan is the Founder of BlockPro.One a block producer candidate. As a candidate, BlockPro is not favoring any one constituent's view but only trying to take a balanced approach to weighing all the pros and cons and bringing the best solution in place in terms of its offerings, alliances and partnerships. We hope that in the larger interests of the EOS network we all vote for the block producers with the most progressive view and the technical prowess to keep the EOS blockchain roaring ahead.