EOS Community Is Challenged After Node Announces Financial Rewards for Votes

Specifically, Starteos, one of EOS' officially sanctioned Block Producers, appeared to publically offer its token holders financial rewards in return for their votes.

The EOS ecosystem rests upon at least two major entities: the EOS Core Arbitration Forum - effectively its 'judicial branch' - and BPs, who produce blocks on the EOS blockchain - just like miners do within the Bitcoin blockchain.

BPs earn EOS tokens produced by inflation - according to some estimations, top EOS BPs obtain around 1,000 tokens per day.

Expectedly, the crypto community, which traditionally values decentralization, was not happy about an EOS BP openly buying votes.

On Nov. 27, EOS New York, which is currently the eighth largest BP, wrote that "The EOS constitution is simply not good enough and we deserve a clear document that outlines our basic system of governance," and then shared their proposal.

Essentially, an alleged leaked Huobi spreadsheet suggested that main EOS nodes were involved in mutual voting along with payoffs to remain in power of the EOS blockchain and keep their profits.

One - the developer of EOS - published a statement, saying it was "Aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims." Nevertheless, there was no further update on the matter, while Huobi remains EOS' top BP as of press time.

On Nov. 1, more criticism of EOS' governance model arrived, as blockchain testing company Whiteblock published results of "The first independent benchmark testing of the EOS software." Essentially, the investigation came to several conclusions about EOS, the most bold of which was that "EOS is not a blockchain," but "Rather a distributed, homogeneous database management system" because its transactions were reportedly "Not cryptographically validated."

In July, EOS CTO Daniel Larimer tweeted that EOS was performing 2,351 transactions per second - Ethereum, for comparison, can process around 15.

The Whiteblock report showed that with "Real-world conditions" of round-trip latency and 0.01 percent packet loss, EOS performance was below 50 TPS, "Putting the system in close proximity to the performance that exists in Ethereum." The investigation concluded that "The foundation of the EOS system is built on a flawed model that is not truly decentralized."