A retrospective and summary of events.
The majority of the top 30 block producers (BPs) met at the request of Brock Pierce on December 9th at 0200 UTC to see if ongoing negotiations would be possible since the vesting of tokens to Block.one has stopped.
The below statement is being made as an outcome of those discussions.
Over the course of the last year, we have seen a significant decline in the rate and quality of code production being output for EOSIO by Block.one. The decline was obvious after many of the senior developers who were the creators of the original code started leaving Block.one to re-join the EOS community, including the founder and ex-CTO Daniel Larimer and other original core contributors. The few senior developers that were remaining in Block.one were repurposed to work on Bullish. This was apparent in the latest two EOSIO iterations, EOSIO 2.1 and EOSIO 2.2.
During the last three years, a frequent conversation in the EOS community has been whether or not Block.one was living up to the commitments they made during the token sale as they were being paid from vesting tokens approximately 27,400 EOS daily, roughly the equivalent of all ~60 paid BPs combined. Some of the failed commitments include not having deployed any kind of inter-blockchain communication (IBC) solution, promise of 1 million transactions per second never reached, over 1000 dApps at launch, decentralized social media platform (i.e. Voice), and more.
“EOS VC is a program that is going to deploy $1 billion of capital into EOS projects over the course of the next couple of years.”@BrendanBlumer can we still count on you and @block_one_ to deliver on your previous commitments to #EOS?
— EOS Network Foundation (@EOSnFoundation) May 8, 2020
Regardless of where opinions fell, one thing that was always a constant was that Block.one was key to core code development. Once this final leg started to crumble this opinion was no longer subjective.
This part was very objective, and the frequency and depth of conversations surrounding the vesting tokens increased throughout the whole EOS community. Block.one’s failure to provide continued core code developments wasn’t just a disappointing letdown for EOS, but for all other EOSIO iterations and the applications and businesses built on or around each of those ecosystems. There are many BPs on EOS who also provide infrastructure for other public EOSIO chains as well, so the impact of this breakdown in core development support cannot be understated.
These conversations culminated in early November when Block.one made a press release announcing they had sold 45 million EOS tokens to Brock Pierce in order to launch Helios VC. In and by itself, this was not an issue of concern. The issue was that of the 45 million tokens sold, only 8 million tokens were vested, whilst 37 million tokens would be still vesting for the next ~7 years.
Through the current means of consensus it was determined that the vesting tokens legally and rightfully belonged to the network. Block.one attempted to sell the rights to assets it did not own without consulting the rightful owners.
Through the EOS Network Foundation (ENF) the network formally began engaging in discussions with Brendan Blumer and Brock Pierce on November 7th, leading to an in-person meeting on November 10th. The BPs, who ultimately have the governance power on-chain, were kept apprised of these negotiations and provided feedback and guidance to the ENF. Back and forth proposals ensued during the following four weeks.
The BPs believed that the most powerful statement that could be made to the market would need to originate from Block.one: an external capital injection using the $4.1B of funds raised during the token sale (currently valued at over ~$10B) to be used for ongoing ecosystem maintenance and growth. This was requested on repeated occasions, but swiftly rejected each time.
The final proposal was put forth on November 24th whereby the network would keep 30 million of the 67 million vesting tokens alongside a contribution from Block.one of 2 million already vested tokens, as well as the transfer of ownership for the EOSIO intellectual property (IP) to the EOS community. This was essentially an exchange of 35 million EOS for the EOSIO IP. This proposal was only a slight modification from what the parties left with when they parted ways on November 10th. Throughout this entire process, it had been known that Block.one did not own the EOSIO IP since they had transferred it to Bullish, consideration by the network was always given to this fact.
Ultimately, having Block.one admit that they had failed to live up to some of its commitments, whilst publicly coming to the table to offer to work with the network to acquire the EOSIO IP, would have been a sign of humility, and would have gone a long way to start mending trust that had eroded over time.
The ENF arranged for a term sheet (letter of intent) to be drafted once it became apparent Block.one would not be doing so in a timely manner, despite repeatedly telling the ENF it would be providing one (as early as November 10th).
The majority of the top 30 BPs met on the evening of November 30th and agreed to put a deadline of December 7th at 2259 UTC for Block.one to publicly acknowledge the proposal, while knowing that the implementation of the proposal would take time. No deadline was put on the implementation of the proposal. Both parties agreed that having the intent being made public by Block.one would be satisfactory at this stage. The network had already made the terms and deadlines known publicly on its end, all we wanted was for Block.one to acknowledge and confirm publicly.
Alongside this deadline, the BPs deployed an on-chain proposal, a multisig (MSIG), that contained code execution stopping the vesting of tokens towards Block.one.
The ENF made it known publicly that BPs would be adding signatures daily to the MSIG leading up to the deadline. This would allow for the EOS token holders to make adjustments to their voting should they be in disagreement with the process and those signaling support for vesting stop, allowing for continued due process under the consensus mechanism that governs the EOS network. Throughout the entire month of November leading up to this date, the same governance process applied.
On December 5th, Block.one made the token component of the agreement public. However, the announcement was still lacking any public mention of the IP.
By December 7th, over 20 of the top ranked BPs had made their positions known publicly and on-chain affording due process for the EOS token holders. This gave token holders a chance to follow the on-going negotiations and change their votes if they did not agree with the BPs who had made their positions known and clear.
Ultimately Block.one failed to meet the deadline and the MSIG was executed 4 hours later on December 8th at 0455 UTC.
Through a super majority consensus, the EOS network has taken its future in its own hands. This begins a new era for #EOS and highlights the power of the blockchain to enable a community to stand up against corporate interests that don’t align with theirs. https://t.co/8l62MBG67C
— Yves La Rose (@BigBeardSamurai) December 8, 2021
Stopping the vesting of tokens to Block.one was an action the network determined was necessary to express the severity and sincerity of the situation, highlighting the power of the blockchain to enable a community to stand up against corporate interests that don’t align with theirs. This represents the blockchain ethos and spirit and is what blockchains were made for.
There was no confiscation, no tokens in the Block.one account were taken, the account was not changed, keys were not modified. The network is no longer paying Block.one from the eosio.stake account, that is all.
No integrity here is lost and I'm happy to debate you or anyone on this subject.
— Aaron Cox (@Jesta187) December 8, 2021
By no means is Block.one being absolved of its responsibilities as it still holds the entirety of the funds raised during the year long token sale as well as the ~32 million EOS that have already vested. They must continue to fulfil their commitments made during, and subsequent to, the token sale. The notion that the EOSIO IP belongs in the hands of a private for profit entity and not in the hands of the EOS community does not sit well with the network.
1/ The #EOS Network, through its governing consensus mechanism, was open to swapping the #EOSIO IP in exchange for 35M $EOS. The network didn't particularly want or value the IP highly, but it was essentially the only thing that was concretely offered. The rest was aspirational.
— Yves La Rose (@BigBeardSamurai) December 19, 2021
The goal of a blockchain consensus mechanism is to align those with the power to produce blocks and those with value at stake. Determining whether BPs indeed represent the consensus of those with the most at stake is difficult. In an ideal consensus mechanism any decisions made by those given power by the network would perfectly align with stakeholder consensus.
Using the end result of a decision that one may disagree with to justify or condemn a process will forever divide us. The means must justify themselves. If you believe in token weighted governance, the end is justified so long as the process was followed. Everyone involved in EOS consented to the process, the process was followed, therefore respecting and supporting the legitimacy of the outcome is justified.
Those that use the end to justify or condemn a process will forever divide us. The means must justify themselves. If you believe in token weighted governance then the end is justified so long as process was followed. @EdenOnEOS
— Daniel Larimer (@bytemaster7) December 9, 2021
This is not to say that we must not continue working towards building better mechanisms. In fact, the first investment made by the EOS Network Foundation was made by way of financially supporting EdenOnEOS and Dan Larimer. We will continue doing so as better consensus alignment strengthens the network for all stakeholders.
This is why my focus is on ideal democracy where the power rests with all of the people and is not covertly captured by media, money, or voter fraud. Time to decentralize #democracy and empower individuals! @moreequalanima1 https://t.co/q79po8kITh.
— Daniel Larimer (@bytemaster7) December 9, 2021
The network has extended nothing but good will in attempting to correct the wrong that occurred earlier in November so that Block.one could live up to its agreement with Brock in a timely fashion, while also making the network whole in the process. Brendan has publicly acknowledged this.
During the month of November, the community of EOS token holders rallied to give Block.one the benefit of the doubt and extend an olive branch in hopes of reaching an agreement so we could bring closure to this chapter in our history. The community gave Block.one an opportunity to make amends so we could walk the same path with respect and unity going forward. This is the network’s wish.
The ENF will continue to lead the EOS Network as the representatives of the largest DAO in the world. We welcome new investors, developers, businesses and individuals with open arms as we enter a new era.
To quote Margaret Mead,
“Never underestimate the power of a small group of committed people to change the world. In fact, it is the only thing that ever has.”
The EOS Network is a 3rd generation blockchain platform powered by the EOS VM, a low-latency, highly performant, and extensible WebAssembly engine for deterministic execution of near feeless transactions; purpose-built for enabling optimal web3 user and developer experiences. EOS is the flagship blockchain and financial center of the EOSIO protocol, serving as the driving force behind multi-chain collaboration and public goods funding for tools and infrastructure through the EOS Network Foundation (ENF).
EOS Network Foundation
The EOS Network Foundation (ENF) is a not-for-profit organization that coordinates financial and non-financial support to encourage the growth and development of the EOS Network. The ENF is the hub of the EOS Network, harnessing the power of decentralization as a force for positive global change to chart a coordinated future for EOS.