EOS Centralization: Top 1.6% of Holders Own 90% of Supply

David Azaraf

EOS Centralisation and Distribution CryptoGlobe Research

After a year-long, $4bn ICO, the anticipated EOS mainnet finally went live in early June 2018. The migration of EOS tokens from the ERC-20 standard to the independent EOS blockchain has brought with it increasing scrutiny regarding the true extent of decentralization on the EOS network.

In an effort to ensure an even spread of token holdings across investors, EOS ran a phased ICO with no hard cap.

Wealth inequality on the EOS network sees the top 1.6% of token holders controlling 90% of the supply while the bottom 44% have to make do with a mere 1% of EOS.

The nature of EOS’s consensus mechanism exacerbates the centralization issue as new token supply is distributed exclusively to the delegates in the delegated proof-of-stake system. These delegates are voted in by EOS token holders, with the top 5 wallets owning a third of the tokens and therefore a third of the votes and serve as block producers on the network.

In return for their service, they are remunerated by the increasing token supply. At an estimated 5% annual inflation, the inflation pool used to reward delegates is expected to total 4.5 million EOS tokens, currently valued at $45million by the end of the year.

EOS has the highest level of centralisation in comparison to its peers. CryptoGlobe Research recently looked at the unnatural distribution of masternode coins such as DASH and NEM (see chart below), however, these cryptocurrencies are still more distributed than EOS.

DASH and NEM distribution CryptoGlobe Research

As blockchains look to scale to the point of accommodating mass adoption, projects will have to find a way around the scalability trilemma. For EOS, that means preserving their platforms transaction speed and security while ensuring a fairer distribution of wealth and power on their network.

Crypto Market Update: Focus on BTC, ETH, BCH, BNB, XMR, and DASH

Siamak Masnavi

This article provides a quick overview of how the crypto markets have been doing—with the focus on Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), Binance Coin (BNB), Monero (XMR), and Dash (DASH)—over the past 24-hour period.

Overall, September 17th is proving to be a bit of a mixed day, with 12 of the top 20 cryptocurrencies (by market cap) in the red at press time (around 06:25 UTC).

BTC-USD

BTC-USD 24 Hour Chart - 17 Sep 2019.png

The bad news is that are still waiting for the launch of Bakkt's physically-delivered daily and monthly Bitcoin futures contracts. So, Bitcoin is still trading mostly sideways, hovering around the $10,300 mark. The good news is that the launch is expected to take place in less than one week (i.e. on September 23), as was confirmed by this tweet that Bakkt sent out on September 16:

ETH-USD

ETH-USD 24 Hour Chart - 17 Sep 2019.png

The Ether (ETH) price continues its upward movement toward the $200 mark, up another 2.24% in the past 24-hour period (making it up 4.32% in the past 7-day period). What may have helped the Bitcoin price yesterday (September 16) is the announcement by crypto payment processor BitPay that in the near future it will be possible for its customers to accept Ether payments for purchases of goods and services. Also, the BitPay wallet will support Ether.

Ethereum co-founder Vitalik Buterin had this to say about the news:

"It is exciting to see BitPay leading the way in integrating Ethereum into global payment systems. This truly opens up a new world of possibilities for the Ethereum ecosystem, and together we can continue to be a leading innovator for real world use cases for cryptocurrencies.

BCH-USD

BCH-USD 24 Hour Chart - 17 Sep 2019.png

On Monday (September 16), Bitcoin.com announced that it had entered into a strategic partnership with Taiwanese smartphone manufacturer HTC, as a result of which the Bitcoin.com wallet will come preinstalled on HTC's current and upcoming blockchain phones (Exodus 1 and Exodus 1s):

BNB-USD

BNB-USD 24 Hour Chart - 17 Sep 2019.png

Although BNB is currently in the red, this may change during the next several hours once all of the six mini announcements that Binance plans to make today have come out:

The first of the six announcements that Binance CEO Changpeng Zhao (aka "CZ") referred to is the addition of support for Cosmos (ATOM) to Binance's Margin Trading platform:

XMD-USD

XMR-USD 24 Hour Chart - 17 Sep 2019.png

OKEx Korea announced on Monday (September 16) that it intends to delist all five privacy coins it is currently supporting, i.e. XMR, DASH, ZEC, ZEN, and SBTC, due to concerns that these cryptocurrencies do not allow it to implement FATF's so-called "travel rule". 10 October 2019 is the date on which transaction (i.e. trading) support ends.

DASH-USD

DASH-USD 24 Hour Chart - 17 Sep 2019.png

Since OKEx Korea's delisting announcement mentioned DASH, you would expect it to be down today, just like XMR. However, it is not, and that is very likely due to the fact that today (September 17) is the day that trading in DASH is expected to start on Coinbase Pro on/after 09:00 PST (16:00 UTC) provided that there is sufficient liquidity.

Featured Image Court: Photo via Pixabay.com