The centralization of EOS has again emerged equally a contentious result within the cryptocurrency customs, with the firm that created the EOSIO software, Block.1, participating in balloter procedures to choose the Block Producers for the EOS blockchain.

On Nov. 28, EOS Block Producer EOS New York tweeted screenshots of Whois search results that suggest that six of EOS's total pool of Block Producers are managed by just a unmarried entity, intensifying criticism of the network's centralization.

EOS'due south blockchain is secured using a delegated proof-of-stake model, with 21 Block Producers elected to operate EOS token holders to exclusively operate the network'southward nodes. According to Block.One, EOS's model offers improvements over proof-of-work systems, facilitating "the highest performance output with minimal energy requirements."

As the maintenance and verification of EOS's blockchain requires the coordination of a small network of nodes, Block.One claims that the network can produce block times of half a 2d and deliver a throughput capable of performing "more than 5,000 actions per 2nd."

Block.One participates in BP elections

On November. thirteen, Block.One announced that it volition be participating in elections to delegate EOS' Cake Producers, describing itself as "a minor merely significant EOS token holder and an anticipated user of the EOS public blockchain" in possession of "less than 9.five%" of the circulation supply of EOS.

"Ultimately, we will begin participating in block producer voting to more actively join other EOS token holders in ensuring the EOS network remains equally healthy and revolutionary as ever."

The press release also emphasized that the share of apportionment supply owned by Block.1 "continues to decline as new tokens are created through inflation and are used to advantage elected Cake Producers that run and operate the network."

Vi BPs purportedly comprise a single entity

Tweets published by EOS Block Producer, EOS New York, take intensified concerns surrounding EOS'due south centralization, with the BP appearing to take discovered that half-dozen of EOS' Block Producers are, in fact, one entity.

Related: EOS BP, Explained

The tweets include screenshots of Whois search results evidencing that the domains managed past EOS Block Producers stargalaxybp, validatoreos, eoszeusiobp1, eosunioniobp, eosathenabp1, and eosrainbowbp were registered past the same company operating under the proper noun "fun eos" and based in Shenzhen, China. EOS New York besides proposed removing the six BPs from the network. The message stated:

"This is unacceptable. Nosotros take requested the signatures of the pinnacle 50 registered producers so that all token-holders may know who does and who does not condone such impropriety."

The co-founder of Ethereum, Vitalik Buterin, suggested that EOS introduce sharding to convalesce its centralization issues, tweeting in response to a Cointelegraph article:

"Honestly I call up EOS should adopt sharding and assign each cake producer to a random shard and so that in that location are little-to-no gains from two validators sharing infrastructure as they'd have unlike data to validate. Would increase their TPS besides."

Weiss Ratings criticizes EOS

On the aforementioned day as Block.One's proclamation, Weiss Crypto Ratings took to Twitter to criticize EOS, accusing the network of having "bug with centralization" and recently failing to "process any transactions for anyone who doesn't have a substantial amount of EOS locked upwardly and staked."

Weiss downgraded its rating for EOS in June, similarly citing "serious problems with centralization" as the catalyst for the downgrade. The business firm had previously ranked EOS above Bitcoin (BTC) as the second-all-time cryptocurrency according to the criteria of "technology and adoption." According to Jake Yocom-Piatt, the co-founder and project atomic number 82 for Decred — a community-driven digital currency with born governance:

"EOS' governance model was flawed from the get-go, and it's assuasive a centralized oligarchy and VC interests to profit curt-term rather than build for the long-term. Governance shouldn't and doesn't need to be this way. Information technology'south incredibly difficult to remove bad actors from power and replace a bad model. While this model incentivizes gains for the few, governance tin can and should be built with 'skin in the game' for all involved and with a sustainable, enforceable spending model to final the long booty."

EOS developers express centralization concerns

The issue of centralization has long plagued EOS, with Block.1 Chief Engineering science Officer Dan Larimer previously stating that "decentralization isn't what we're after," before emphasizing that the projection is focused on providing "anti-censorship and robustness against existence shut down."

Related: Block.1 Slapped With $24M Fine — Cost of Doing Business?

The concerns have been voiced not but by EOS critics, but developers building on top of EOS' blockchain as well. In Baronial, Larry Sanger, co-founder of Wikipedia and chief investment officer of Everipedia — an online encyclopedia built on EOS — issued a warning regarding the geography of the network's centralization:

"We cannot continue to build dapps on EOS if the network is de facto centralized in the hands of the Chinese. I've been making noise internally at EP about this since I learned about it before this summer. Sorry, but information technology can't go on much longer, as far as I'm concerned."

Despite his remarks, Sanger later on clarified that Everipedia would not be moving away from EOS. At the time, roughly nine of the top 21 EOS Cake Producers were based in People's republic of china — near 43%.

Co-ordinate to EOSForce, this centralization could atomic number 82 to collusion betwixt BPs, who could trade votes to maintain their performance of EOS' nodes. Data from EOS Authority gives weight to this claim, demonstrating that many peak BPs share a vote confluence exceeding eighty%.

Some analysts back up Block.1'south electoral participation

John Todaro, the managing director of digital currency research at Tradeblock — a firm providing trading tools for cryptocurrencies — also emphasized the "long-continuing" disquiet held past the crypto community with regard to EOS' centralization, notwithstanding, conceded that "a greater degree of centralization has allowed for greater scalability compared to similar networks." Todaro told Cointelegraph that:

"Because block producers can nevertheless be voted off, at that place is some degree of continued decentralization in that various block producers tin can cycle in over fourth dimension, limiting the caste to which a handful of entities tin can control the network."

David Gilded, the CEO of Dapix Inc., the company backside the development of the FIO Protocol — an EOS fork — offered back up for Block.One's decision to participate in BP elections, telling Cointelegraph that the community should see this as a big positive:

"Every bit a significant merely <10% holder of tokens, information technology is important that BlockOne does vote and support the all-time cake producers in the EOS ecosystem. BlockOne has more knowledge than about of the ecosystem about the underlying EOS technology and is in a fantastic position to guide its further progress."

Andy Cheung, caput of operations at the cryptocurrency substitution OKEx, told Cointelegraph that the firm expects EOS' centralization problems will be resolved with time, and predicted that Cake.One'due south balloter participation may influence Block Producers to be more than active in meeting their governance responsibilities.

"Blockchain governance is a complicated chore and controversies tin can quickly erupt when sides don't see heart-to-heart. EOS is the virtually agile blockchain in the globe by a significant corporeality, and we truly believe that issues regarding centralization tin be worked out, because rival sides certainly sympathize the potential of the engineering science. Lastly, we see a scenario where Block.I'due south influence could lead to block producers more actively participating in their governance duties."

EOS faces congestion problems

In addition to the ongoing narrative concerning EOS' centralization, the network has suffered from congestion for approximately one calendar month. The congestion has been attributed to the network's EIDOS airdrop that took place on October. 31, with Coinbase subsequently reporting that it was forced to increase its quantity of staked CPU in order to process customers' EOS transactions. Coinbase estimated that as of November. 8th, approximately 95% of EOS transactions were related to EIDOS.

Related: Research Claims EOS Network Can Freeze, Cake.One Denies Whatsoever Errors

On Nov. 25, Earnbet, a decentralized awarding running on EOS, published a blog issuing a "30-day observe" that the company will exit the EOS network if the congestion issue is not solved inside one month. In the post, the company asserts that "The EOS mainnet is in a sad state," adding that many users are unable to access their accounts:

"The network requires around 30 EOS staked to an account in order to perform a single transaction each twenty-four hour period. Once billed as 'gratis transactions for all,' effective EOS transaction fees now surpass even those of BTC. Instead of needing to pay $0.25 to transfer BTC, EOS users need to pale over $100 of EOS to make a single transaction on the network."

Many from within the EOS community accept criticized the EIDOS airdrop, with EOS Israel describing it as an "assail on the EOS network."