Remarks on EOS governance and BP ownership disclosure

Following recent calls for “block producer compliance” made publicly by certain members of the EOS community, we would like to further expand EOS Titan’s position on the question of our ownership disclosure and compliance with the regproducer ricardian contract. We would also like to take this opportunity to make some remarks on the documents that purport to provide a foundation for EOS governance more generally.

We understand and support the intent behind some of the calls for block producer compliance, we welcome all good faith efforts by community members to actively examine these issues, and we share many of the concerns about malicious or fraudulent actors abusing the network incentive mechanisms that have been voiced by the community.

That being said, we also have concerns about the approach taken by certain community members who have examined, and commented on, the extent to which block producers and block producer candidates have maintained compliance with the express provisions of the regproducer ricardian contract.

In connection with our ownership disclosure, we wish to make clear that we regard our disclosure as stated as compliant with the express provisions of the regproducer ricardian contract.

We have come to this conclusion on the basis of the language used. The ownership disclosure specifically requires disclosure of beneficial ownership of “my company” above a threshold of 10% and all direct shareholders. As stated in our ownership disclosure document, EOS Titan is not currently structured as a company. Nor is it structured as any other form of legal person or other kind of collective entity, such as a partnership or an association. It genuinely is an ad hoc, informal alliance among like-minded individuals.

We note that although “my company” is not a defined term within the regproducer ricardian contract, there is no reasonable interpretation of that phrase that would include ad hoc collectives that have no internal structure and no shareholders.

As such, the concepts deployed in the ownership disclosure provision of the regproducer ricardian contract (i.e., “ultimate beneficial owners of my company”; “direct shareholders”) do not apply to EOS Titan in its current state, and we are therefore compliant with the express provisions of the contract.

We would like to add that there are currently no parties being considered for a 10% or higher ownership stake in EOS Titan should it be incorporated, nor are there any candidates considered to be ultimate beneficiaries of 10% or more of the revenues of EOS Titan, beyond the individuals presented on our website, and their respective fully-owned companies.

That being said, we nevertheless question the wisdom of calling for compliance with the letter of the regproducer ricardian contract, when the express text is so unclear as to make it difficult, if not impossible, to discern completely the intent of said contract. Moreover, to the extent that some intent can be made out, we regard the language of this ricardian contract as unnecessarily narrow.

By way of illustration, consider the following.

By following the express provisions of the regproducer ricardian contract regarding ownership disclosure, it would be very easy to conclude that the intent of the contract was that only corporations are eligible for block producer status. Such a limitation at the level of fundamental governance institutions such as block producers would introduce weakness into the governance structure of the EOS network.

We see no reason to limit a block producer’s structure to a “company”, for which the definition already varies between jurisdictions and is not defined either as part of the regproducer ricardian contract or in the context of the document currently in circulation that is being referred to as the “constitution”.

We believe experimentation and diversity with regard to the governance of block producers is more beneficial to the network, and will ultimately result in a more resilient, and censorship resistant platform. A block producer could potentially be an individual, a DAO, a dApp, an autonomous agent, a NGO, and potentially take many other forms and should not be constrained to a single type of ownership or operational structure.

The regproducer ricardian contract is not (and does not claim to be) a constitutional document. However, it is a key document intended to structure the operation and conduct of certain fundamental institutions of the EOS governance framework. In our view, the regproducer contract is therefore so fundamental that it deserves to be formulated with a degree of care similar to that one would use in drafting a constitution. By using such limiting language at this level, we are stifling innovation with respect to on-chain governance mechanisms. We also argue that by insisting on strict compliance with this point at this stage may force block producers to forfeit significant agility, adaptability and mobility in the light of the uneven regulatory environments and somewhat unpredictable stances adopted by various government agencies and regulators worldwide towards cryptocurrencies.

Supporting such a fundamental limitation would be in direct contradiction with our objective to help make EOS an anti-fragile and censorship-resistant system, which we stated as one of our fundamental core values.

With respect to the formulation of EOS governance frameworks more generally, we would further argue that drafting constitutional and other quasi-constitutional or fundamental documents is challenging in part because it is very difficult to create such structuring documents without introducing undesirable limitations.

In this connection, we think it is important to note that the documents currently included in the EOS-Mainnet Github governance repository have not been subjected to what can be considered a proper discussion and debate, were altered at the last minute prior to launch of the mainnet without a proper notice or review period, and have not yet received any form of on-chain stake-weighted validation or endorsement by token holders.

Moreover, many of the documents or provisions do not objectively meet the minimal quality standard one could reasonably expect from documents of such importance. We are skeptical of any governance approach that, at this early stage, attempts to rigorously enforce compliance with the provisions of the interim documents currently in circulation. To do so would be to act precipitously.

We plead for a more temperate and reserved approach, one that would be better aligned with the current level of implied legitimacy the documents have received at this early stage. In our view, these documents are in essence a proposal or, at best, what would be called in other contexts familiar to members of this community, a freshly submitted request for comment (RFC).

As such, we would like to make an appeal to the community, and suggest that these debates be taken on chain, by using the EOS Forum dapp smart contract or other mechanisms. We encourage stakeholders to take a position on the matter, and to express their views in the spirit of DPOS.

We also welcome further off-chain discussion with interested parties in our Telegram community channel:

https://t.me/eostitanBP

We invite voters sharing our core values and opinions to cast their vote for eostitanprod for block producer, or to vote through our proxy eostitanvote.

Vires in Numeris,

The EOS Titan team
https://eostitan.com