EOS ChainRift’s Stance on the Current Arbitration Process

Background

On the 17th of June, the EOS Core Arbitration Forum (ECAF), an arbitration forum “for and by the EOS community” gave the order to elected EOS block producers (BPs) to freeze 7 accounts which were allegedly compromised. The final consensus to enact the order was reached in a private conference call between the BPs over a period of a couple of hours.

The fallout from this privately made decision was visible immediately afterwards. Steemit user “anahita” details (in the comments section of this post) that he had bought ownership of one of the accounts frozen in a provable good faith transaction (from his end) a couple of days prior. By acting unilaterally and in broad stroke, the ECAF and BPs harmed innocent and constitution abiding EOS users in the process. This is only one such example of collateral damage through the current governance processes.

* * *

On the 20th of June, Dan Larimer details the intended style of arbitration on the EOS platform, ultimately stating that good governance is a combination of:

1. Openness, transparency and integrity
2. Effective collaboration
3. Performance orientation

* * *

On the 22nd of June, the ECAF ruled to censor transactions from 27 accounts with no justification or form of reasoning given, stating that “the logic and reasoning for this order will be posted at a later date". This is antithetical to the governance style outlined by Larimer two days prior, and is central to our response below.

EOS ChainRift’s Response

We at ChainRift take serious issue with the current style of arbitration by the ECAF, which can effectively be boiled down to a “shoot first, and ask questions later” style of governance.

In summary, we reject any arbitrary action taken with zero justification offered to the stakeholders, irrespective of the letters of the constitution or the moral authority of the ECAF. Regardless of the outcome of any action, the expectation for the community to accept an unjustified or impromptu ruling on the promise of “reasons to be provided later” sets a dangerous precedent for EOS’ future.

In line with the discontent community response, EOS ChainRift strongly recommends that all elected authorities act purely in the interests of the stakeholders that voted them into their position. Our recommendation to do so is to act from a position of transparency, full disclosure and openness. This mandates the following action in urgent situations:

1. Full transparency is offered in the form of a detailed justification for any ECAF rulings.

2. The elected BPs reserve the right to accept or reject the ruling.

In non-urgent situations:

1. Reports should be issued with arguments for both sides of the issue to be reviewed by the community.

2. There will be a predetermined amount of time, or until a certain threshold is reached, that the community is allowed to vote for their preferred resolution to the issue.

This will be performed in a near identical fashion to the voting process of the block producers themselves, and ultimately leaves the majority of pertinent decisions in the hands of the stakeholders themselves: the community. The intention with the recommendations outlined here is to safeguard against the corruption that inevitably comes with power.

The ECAF selection process itself should be made more transparent and publicly verifiable. The current standard of “consensus via conference call” is a poor representation of any interpretation of the “good governance” manifesto.

* * *

Despite initial reservations, EOS ChainRift has invested a considerable amount of resources in setting up block producer-ready infrastructure. We have also dedicated seasoned developers to research and develop products to build on the EOS chain. This is because we believe that there is a place for game theory experimentation of a liquid democracy with governed chains to complement the immutable blockchains where all transactions are irreversible, especially in the context of building scalable DApps. However, the current style of governance indicates that things are taking a turn for the worse, and our fears are coming true.

We wish to build the future of EOS on a governance system that values full transparency, open communication and full disclosure.