Weiss Ratings Slam EOS Centralization Issues, Shifts Proof of Stake (PoS) Focus to Cardano
The U.S.-based financial investment rating agency, Weiss Ratings, has called out the EOS blockchain on what it believes to be severe problems with centralization. The agency subsequently downgraded the technology score it had previously awarded the EOS blockchain, stating in a recent tweet:
“#EOS has serious problems with centralization, so we’ve severely downgraded its technology score.”
The concerns seem to stem from the power wielded by the EOS Core Arbitration Forum (ECAF), a group set up to help resolve disputes on the EOS blockchain. However, after it was revealed that last year the group ordered EOS’s 21 ‘block producers’ to freeze 27 accounts, questions of over-arching power were raised. An EOS block producer (BP) is an elected core of voters that take the place of miners in a traditional proof-of-work (PoW) blockchain network. Since EOS uses proof-of-stake (PoS) it doesn’t require mining to maintain the network but rather relies on a ‘consensus’, method of verifying blocks.
Since the 2018 election of the networks 21 BP’s there have been several allegations of collusion amongst BP’s. Some say that rather than acting independently to ensure fair voting, several BP’s are banding together in order to force decisions that would mutually benefit them. The ECAF, meant to deal with these issues, itself became mired in controversy, resulting in EOS chief technology officer (CTO) Dan Larimer proposing a new constitution for the EOS network.
The ongoing issues have collectively resulted in Weiss Ratings significantly reducing the EOS decentralization score. It has now instead turned its focus on the Cardano (ADA) blockchain, a fellow proof-of-stake (PoS) network that may offer better decentralization. In the same prior (somewhat tongue-in-cheek) tweet, Weiss Ratings stated:
“It’s now up to #ADA to launch a truly decentralized #PoS #blockchain. No pressure.”
The Cardano blockchain uses a complex proof-of-stake consensus method known as Ouroboros. The method covers several phases and uses a detailed algorithm incorporating multiparty computation, slot leaders, elections and epochs.