Aligning Calls for Democracy with the EOS Blockchain

EOSIO Democracy as Proof of Stake

One of the key features of EOS infrastructure is that it enables the development of decentralized applications (dApps)

In recent years, democracy has consistently been investigated, or at least mentioned, in cryptocurrency and blockchain literature. Proponents of cryptocurrencies such as EOS have been looking at ways to affirm the democratic and economic credentials of the blockchain, and commentators have taken note of these developments.

Block.one, the developers of the EOS protocol, have recently shared their vision ofcrypto democracy in the context of economic alignment, but it remains to be seenwhether their proposal will become a manifesto for other big players. One thing is certain: calls for crypto democracy have been amplified.

EOS is a blockchain-based decentralized system that can be operated on multiple platforms. The EOS ecosystem comprises the blockchain protocol EOS.IO, releasedon January 31, 2018, and EOS tokens.

On this smart contract platform, transaction fees are absent, and millions of transactions can take place every second. One of the key features of EOS infrastructure is that it enables the development of decentralized applications (dApps).

EOS stakes a claim to being the platform that’s most aligned with the interests of participants, with EOS token-holders seemingly given priority over outside parties in key decisions. For example, the foundation of EOS is the consensus-based Delegated Proof of Stake concept. Within this algorithm, network users place votes to elect delegates (also termed witnesses or block producers) who are then responsible for validating subsequent blocks.

This democracy-based algorithm is not the only confirmation of EOS’s progressive ideals. Recently, EOS changed their governance structure by introducing the PowerUp resource allocation model.

In this model, users pay a fee to power up their account for 24 hours so they can conduct transactions on the network. Then, EOS token holders can deposit unusedtokens and obtain a proportion of the fees generated by the whole network.

EOS went even further down the democratic path by proposing a staking pool system in which token holders are rewarded for voting and providing network security. The stated aim is to achieve alignment between network success and a token holder’s contribution to this success.

This staking pool system has been a while in the making, and Block.one has taken external advice on its implementation. EOS tasked the Prysm Group, an economics and governance consultancy firm that specializes in blockchain and digital assets, with proving proposals for alignment and democratization within
EOS.

Prysm provided suggestions on staking pool configurations, but EOS say that the final decision on these parameters will lie with their token holders. The specifics ofthe proposed configurations can be found here: https://eos.io/news/stake-based-voting.

As with all functioning democracies, nothing about this implementation is set in stone. Before any decision is made, EOS have promised to consider feedback from token holders and block producers to ensure they are willing to participate in such a system.

Users of the established test system will act as something of a focus group, but implementation will be the real litmus test of success. In response to a model in which token holders are rewarded with a proportion of yearly system inflation, people living in real-world democracies may wonder why they have not benefited from their economies.

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