EOS Block Producers Ordered to Freeze 27 Accounts

Francisco Memoria
  • 23 Jun 2018
  • /
  • In #EOS
  • EOS' 21 block producers were ordered by a body created to resolve comunity disputes to freeze 27 different accounts.
  • The order saw various users question the crypto network's decentralization.

EOS, the cryptocurrency whose multi-billion-dollar blockchain recently went live, is currently embroiled in controversy as the EOS Core Arbitration Forum (ECAF), a body set up to resolve community disputes, recently ordered its 21 Block Producers (BPs) to freeze 27 accounts.

The move, which came through an “Emergency Measure Protection Order,” directed the block producers to stop processing transactions from the 27 accounts, and notably didn’t explain why, as it claimed “the logic and reasoning for this Order will be posted at a later date.”

The Order, dated June 22, was signed by Sam Sapoznick, in the capacity of interim emergency arbitrator. This isn’t the first time EOS’ block producers were ordered to freeze accounts, as a few days ago they had to freeze 7 accounts associated with scams.

While it isn’t clear why the freeze on these 27 accounts was now ordered, various users believe they’re associated with phishing scams that took advantage of users when it was still unclear how to vote, before the cryptocurrency’s mainnet went live.

It’s worth noting EOS’ approach to governance is new in the crypto space. The network is designed to deal with a high transaction throughput, and as such doesn’t use bitcoin’s proof-of-work (PoW) consensus mechanism.

Instead, it uses a delegated proof-of-stake (DPoS) consensus mechanism, that sees holders vote to elect 21 block producers, which are responsible for maintaining the network. Seemingly, this gives them power to censor transactions and freeze accounts.

As some critics pointed out, this move questions EOS’ decentralization, as a group of entities has the power to freeze accounts without even giving the community a proper explanation as to what is going on. Supporters, on the other hand, note that it’s good to weed out bad actors.

Some critics compared the move to civil asset forfeiture, which sees law enforcement seize private property based on the suspicion that a crime has been committed. These types of moves make it clear EOS is unlike Bitcoin, which some argue rose to prominence because of its decentralized, permissionless, censorship-resistant nature.

Industry veteran Charlie Shrem slammed ECAF’s supporters who argued the move was necessary for mass adoption on Twitter, arguing that if someone has the power to freeze accounts and control others’ money, then mass adoption isn’t desirable.

At press time, it’s unclear whether the 21 EOS block producers – one of which is cloud mining company Genesis mining – will comply with the order and freeze the accounts.

Over 90% of dApps 'Did Not Record Transactions', dAppRadar Data Shows

Omar Faridi

Smart contract-enabled, decentralized applications (dApps) are still in their early stages of development. At present, Ethereum (ETH)-based dApps have almost no transaction volume.

This, according to data from DAppRadar - which was pointed out by Twitter user Kevin Rooke on February 9th, 2019. As Rooks explains in his tweet, 86% of ETH-based dApps had zero users last Saturday, while 93% did not record any transactions. Although there are reportedly around 40 times more developers focused on creating software for Ethereum (when compared to its closest competitors such as EOS and Tron), ETH-based dApps don’t appear to have lived up to expectations.

There are about 1,375 “live” dApps built on the Ethereum blockchain, however the number of active users have remained consistently low. According to data from DAppRadar (referenced by Rooke), there are around 1,828 “live” dApps “across all platforms”, but 77% of them had “0 users” and 85% of them “had 0 TX (transaction) volume” (on February 9th).

Do We Need DApps?

Out of the total 1,375 Ethereum-powered dApps identified, there were only 200 that actually had (one or more) users last Saturday. Meanwhile, 426 dApps out of a total of 1,828 dApps developed across all platforms had users on February 9th. As Rooke mentioned: “Among the 426 dApps that actually had users, there were 157k active addresses today.”

Commenting on the relatively low dApp usage, prominent bitcoin advocate and author, Saifedean Ammous, remarked:

A brief look at them suggests all of these would be better run as apps. I'm curious if you could give me an exception, a dApp that benefits from being distributed?

In response to Ammous’ question, Rooke said that “perhaps some gambling dApps will see traction” and that distributed apps could potentially see more adoption because they are “much more difficult for governments to regulate [and/or] shut … down.”

Interestingly, Vortex (@theonevortex), a well-known bitcoin enthusiast and popular commentator on Twitter, remarked: 

Gambling and dark markets are essentially the only use case currently for dApps.

EOS & Tron Already Have Greater "On-Chain USD Volume" Than Ethereum

As explained, dApps are in their preliminary stages of development and during their first few years (of being introduced), cryptocurrencies had also been associated with the dark web and mainly thought of as a means to help engage in illicit activities. Since then, bitcoin (BTC) and other digital assets have been more widely adopted. Cryptocurrencies also have a supportive and growing ecosystem.

It’s possible that more legitimate use cases for dApps could be developed in the foreseeable future. In late January 2019, researchers at Diar released a report in which they mentioned that: 

EOS dApps are [currently] accounting for 55%, Tron 38% leaving Ethereum applications with a mere 6% of total on-chain USD volume.

While on-chain transaction value might not be the best way to measure the performance or usefulness of dApps, the introduction of newer platforms for developing distributed applications indicates that a significant amount of development work is being done to improve the underlying technology.