Weiss Ratings Claims Bitfinex May be Using Traders’ Tokens For Voting
Bitfinex, a popular crypto exchange and main EOS block producer, is suspected of using token deposits made by its customers to vote itself in, according to a tweet made by Weiss Ratings. A few prior to this statement, Weiss Ratings analysts stated that actually, EOS was one of the most centralized blockchain networks.
“#EOS abuse: Other people’s tokens are now being abused like #WallStreet abused other people’s money in 2008. #Bitfinex is voting clients’ EOS tokens for THEMSELVES as #1 block producer. Help! “- tweeted Weiss Ratings on June 20, 2018.
Weiss Ratings granted EOS a B rating, mostly due to efficient implementation and innovative technology. However, Weiss also warned that crypto systems are still experimental, and their true performance can vary from project to project.
The EOS voting is still ongoing, with 24% of tokens owners having voted. However, for the holders which still keep their tokens in exchanges, voting has been restricted. The determination of just a single block producer cannot influence the network to such a large extent. Though, the prospect that block producers can increase their influence and cannot be voted out is a cause for worry.
EOS voting analysis also points out that Bitfinex collected half its votes from a few large wallets, or ‘whales’- holders of large amounts of tokens.
But to its credit, Bitfinex recently rolled out a special tool for voting through exchange wallets. And since the EOS voting still continues, the existing status of block producers may change.
In spite of these claims, the EOS market price has seen an increase of around 3%, reaching $10 USD. But trading volumes have dwindled down. The Tether (USDT)/ EOS trading pairs amount to around 37%, proving once again the importance of the fixed-price asset. EOS trading is currently dominated by Binance, and the price has been hovering around $10.
Most of the criticism against EOS comes from the older and more prominent members in the crypto community.
The main developer of EOS, Dan Larimer, contested those allegations, considering that some degree of governance is always necessary when it comes to blockchains.
“There is widespread belief that there is no “governance” of Bitcoin or Ethereum and that these protocols are decentralized. There is further a belief that the code should be law. In reality, all blockchains have human governance processes that reveal themselves in emergencies and when the protocol upgrades,” wrote Larimer in a recent blog post.