Spoiler: Absolutely not. But its struggles might still be educational.
EOS is a democratic blockchain. It uses a system of 21 elected block producers who reap the highest rewards, backed up by dozens more block producers who are also elected and get smaller rewards. The idea is to create a faster network by using an agile handful of nodes, while still having some backup nodes and enough decentralisation to ensure that the network is tamper-proof and immutable.
Everyone has some kind of democratic power in EOS, but because political power is directly correlated to wealth ("1 EOS = 1 vote") and the most powerful accrue the most wealth (being a top 21 block producer pays very well), it's much closer to an oligarchy by design.
If other blockchains are food for thought on how to program a self-sustaining society and what kind of governance model you'd have in a perfect world, then EOS might be food for thought on how to actually manage – and perhaps even fix – a corrupt, oligarchic, false democracy. So its governance struggles might be quite applicable to other oligarchic pseudo-democratic governance systems, such as the one used by the United States.
Other blockchain systems are dealing with brand new problems, but by pursuing a human-driven democratic governance model, EOS needs to tackle some of the world's oldest problems. Good luck.
The rules of the game
EOS's current problem is finding a way of restoring power to the people in a democratic way and putting the best and most honest block producers in power, even as the vast majority of wealth and power is consolidated in the hands of a small and increasingly wealthy cabal. Ideally, this will be accomplished without a violent revolution.
The poor downtrodden EOS citizens have limited but potentially quite powerful tools at their disposal, including the following:
- The ability to rally behind a unifying cause in large enough numbers to make a difference.
- The ability to propose any kind of change they want as many times as they want, even if it won't be accepted.
- The ability to influence sympathetic block producers.
Their goal is to unseat the block producers and push through new resolutions that will help EOS in the long run.
On the oligarch team, the goal is generally to create as much wealth as possible, which is generally done by maintaining a position as a block producer.
The playing field
EOS is transparently centralised under a situation where vote buying is the norm, and the block producers are locked into a system of voting for themselves and each other for the purpose of maintaining power.
In this case, the oligarchs are a combination of exchanges and whales.
"By my estimation, there are about 15 to 20 EOS accounts ("entities" is probably a better word) that actually move the needle when it comes to BP election. Collectively, these 15 to 20 entities make up about 50% (or 125 million) of the actual votes currently being cast on the network. I’ve done quite a bit of research around this," says EOS enthusiast BlockchainKid.
The influence of these entities is quite clear, with the rich and powerful getting richer and more powerful through a combination of vote-buying arrangements and simply voting for themselves.
So, how is the EOS citizenry trying to solve this problem?
When EOS first launched, it encountered historically familiar problems. People were abusing the powers that be to solve their own squabbles and using the governance powers granted by the EOS system for transparent personal gain.
Following these governance teething pains, the EOS constitution was amended to limit the power of its elected officials and hopefully to keep them more focused on the job they were elected to do. This limited the power of the block producers, but didn't iron out the underlying problems with conflicts of interest.
Money in politics
One commonly floated proposal, both in EOS and the real world, is to get the money out of politics with the goal of eliminating the more obvious problems with corruption and conflicts of interest.
This runs into a few problems. The first might be that it's simply unenforceable, and so it might be better to transparently regulate and oversee – exactly like the real world.
The second might be that running a node – or an election campaign – is expensive work. It requires money to get done, so banning money from politics by default ensures that only the wealthy get to participate. Once again, just like the real world.
Incidentally, EOS New York is one of the 21 block producers, so it likely has a vested interest in maintaining the vote-buying system. That doesn't necessarily detract from the validity of its argument, but it is a complicating factor. The ChintaiEOS system referred to in the above tweet is a token-leasing platform that lets people lease their EOS tokens and, by extension, the voting power associated with them for a profit.
It might present smaller token holders with a profit opportunity, but it also presents a new avenue for the already-wealthy to further consolidate their power.
As with EOS, US politics approaches the issue by ensuring that campaign contributions are as transparent as reasonably possible and that anyone can see where a candidate's vested interests lie. But also as with EOS, this doesn't necessarily translate into any action from voters.
Knowing there's a problem isn't the same as providing a solution.
The problem is that people aren't getting out there and voting, says Block.one. Along with many block producers, it's doing what it can to encourage people to vote mindfully for the candidates they think will be best for the job.
But this runs into some new problems. First, voting is not a zero-effort activity. It requires time and energy and has monetary costs of its own. If someone sees zero benefit to voting, the economically rational thing to do is not vote. This problem has been with EOS since its inception and with the real world since democracy's inception.
But it's likely compounded by the openness of money in politics. In the case of EOS block producers, an everyday minnow might reasonably assume that their vote won't make a difference and so just won't vote.
The following is a breakdown of the top 21 EOS block producer votes and where those votes ostensibly came from. The pink and blue bars at the right hand sides show the smaller voters, every other colour is a whale vote. The prominent black section shows Bitfinex's votes.
The top 21 positions are what matter. Those are the actual decision-makers and the highest-paid block producers. And if an individual thinks a single vote won't matter in EOS, they're absolutely correct. The whales determine the top 21, and have plenty of surplus left should thousands of minnow voters somehow find themselves motivated and organised enough to make a difference.
Compare that to the bottom ranks, which tend to attract many more smaller voters as a percentage of their total.
This highlights the split-vote problem. The most motivated and passionate EOS minnows might be voting, but they're all voting for different candidates, which dissipates much of their power. Unlike the real world, where single issues (climate change, abortion, gun control, etc) are enough to motivate voters, there's no single issue for EOS candidates to rally behind.
Instead, you have a mess of controversial problems and no clear answers, and even doing some cursory research on the available candidates is a painful slog because there are simply too many options to choose from.
It might be little surprise then that many people default to voting along national lines, even if for no reason other than avoiding language barriers.
Language and platform barriers are naturally a problem. Political candidates might strategically choose to hone in on voters of a specific ethnic or cultural background, but the divisions in EOS are there by necessity, and the community is split down the middle by a very tall wall.
Specifically, the great firewall of China.
China's many EOS users tend to gather mostly on WeChat, while the rest of the world favours Telegram. Furthermore, EOS users in China mostly discuss these kinds of governance subjects in Mandarin, while English is the unofficial official EOS language elsewhere.
This has seen two largely different EOS communities emerge, where the same subjects are being discussed in different places, different languages and from different angles. The actual user experience also varies widely which might have knock-on effects.
So far EOS's dispute-resolution services have tended to be much more available to English-speakers, and most discussion of the EOS constitution has similarly been in English through Telegram and similar.
International relations, as they were, have been further marred by "a sense that Chinese token holders or BPs are being unfairly picked on," in the words of the EOS Alliance organisation, in the wake of vote-buying allegations.
Needless to say, cultural differences, language barriers and similar are still very much a problem in the real world and are certainly not conducive to whipping voters into a position where they can stand behind issues and unify to make a difference.
Can EOS solve these problems?
By committing to a human-powered democratic blockchain, EOS was committing to these problems, which are as old as time itself. They aren't problems to be solved so much as flaws to live with. Part of the point of blockchain is to serve as an alternative which isn't subject to these flaws.
In this respect, EOS is a fundamentally worthless project beyond its educational value or the profits that might be yanked out of the system before it collapses.
But at least some of its struggles as it tries to solve these governance problems might carry real-world lessons.