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.

Dubai-Based Real Estate Giant Aiming to Launch Token on JPMorgan’s Quorum

Siamak Masnavi

Dubai-based real estate developer Emaar Properties says that it plans to launch this year a blockchain-based referral and loyalty platform called EMR that is being built on Quorum, JPMorgan Chase's enterprise-focused fork of Ethereum.

Emmar Properties is one of the world's leading real estate development companies. Its best-known project is Burj Khalifa, which is the world's tallest building. This is a skyscraper in Dubai, United Arab Emirates (UAE) that has a roof height (i.e. total height - the height of the antenna) of 828 m (2,716 ft ).

According to a report published on October 17 by local media outlet ArabianBusiness.com, the EMR platform rewards Emmar's customers with EMR tokens. Emmar says that these tokens "will not only be redeemable in Emaar’s real estate, hotels, ecommerce operations and malls, but can also be traded with other users."

Emmar Chairman Mohamed Alabbar had this to say:

We didn’t become Emaar by standing still, or by thinking small. By launching the EMR utility token ecosystem, Emaar is expanding the concept of connection. We aren’t just looking into the future — we are building it.

It will be possible for customers to use a mobile app (available for iOS and Android) to "access the referral and loyalty system and earn or redeem EMR tokens."

Hadi Kabalan, director of tokenisation at Emaar, stated:

We have an existing ecosystem and a large customer base, as well as millions of further potential users globally who have yet to discover Emaar. Our blockchain token platform positions us to grow our user engagement with today’s digital-native, mobile-first generation who expect a fairer internet and want to be part of the conversation.

For those of you who have not come across Quorum before, here is how a member of the Quorum team described the project in a reply to a Reddit post in November 2018:

"Quorum is a fork of the go-ethereum (geth) client with a few updates that add enterprise level features such as supporting private txns, node permissioning, fast consensus algorithms, block finality, and some others. It was originally created through a joint effort by JPMorgan and core engineers from the Ethereum Foundation. Beyond that, it has advanced to keep up with geth releases and has a full time team dedicated to it and its sub projects... Quorum does not have a mainnet, and the expectation is that users of it set up their own network, be it private or otherwise (we are aware of several that are public)."

Featured Image Credit: Photo via Pixabay