The EOS Blockchain and the team behind it are facing yet another hurdle in their quest to unseat Ethereum as the blockchain of choice for anyone making Dapps or smart contracts.
As a refresher, EOS is not minable. “Block producers” generate the required number of blocks to hash and get rewarded by the creation of new EOS tokens for each new block they produce.
Block producers have the ability to publish the desired amount for their expected pay, and the number of EOS tokens that get created is calculated based on the median value of the desired pay amount published by all the block producers.
Since block producers obviously want higher pay, this feature, in theory, could be misused. EOS has a mechanism that attempts to deal with this, capping producer awards so that the total annual hike in token supply will never exceed 5%.
Holders of EOS tokens have the authority to vote out block producers who demand more inflation, as deemed necessary amongst all EOS token stakers.
This capping mechanism works in concert to EOS storage, as all token stakers will pay for the storage of files on the EOS network through some degree of annual inflation. As long as a staker is storing a file on the EOS network, their EOS tokens will be held up and will lose value only at the rate of inflation.
The more storage required, the more blocks will be demanded from the block creators who can, in turn, demand a higher value for their work. Likewise, in the case of decreased storage demand, inflation would be pushed lower, thereby leading to a smaller degradation in loss of value of EOS tokens held up.
So why hasn’t the main-net launched yet?
In essence, 15% of all tokens must be staked to vote on block producer candidates. Staking tokens allow EOS token holders to vote for up to 30 block producers. The votes are then weighted by how many tokens are staked. But since less than 3.5% of the tokens are currently staked, the launch is in limbo.
So what gives?
One possibility is that the lack of validated mechanisms for voting is keeping some investors on the sidelines.
According to Syed Jafri of EOS Cafe Calgary, “The majority of people are waiting for tools to be vetted and confirmed to be safe before jumping onto voting.”
Currently, the only way for the token holder to vote on the EOS blockchain is in a hot wallet. Many are thus skeptical that it is safe to vote. Also according to Jafri, “part of the reason some people are waiting to vote is that, during the blockchain’s testing phase, several “epic” vulnerabilities were found.”
Another factor is that until recently, the only way to vote was via the command line. Non-technical users were thus effectively shut out of participating in the vote.
So in summation, if one combines a lack of non-technical voting options with legitimate fears about the safety of voting, it’s reasonable to conclude that the two main groups comprising EOS token holders are biding their time. The majority of holders won’t touch a command line with a 40-foot pole, and those that would think that even doing that is too risky.
It’s frankly a wonder given these facts that there isn’t more skepticism about EOS overall.
For those EOS tokens that are staked, most of them will remain frozen until the mainnet launches because most tokens are sitting in EOS wallets. But EOS tokens on exchanges continue to be able to be bought and sold.
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