These first weeks following the birth of EOS blockchain were marked by controversy over decisions taken by block producers (freezing accounts associated with phishing activities), role of ECAF (EOS Arbitration Forum), and content of EOS Constitution.
We had supported the decision taken by top block producers to freeze 7 accounts, that contained funds stolen from several EOS members (proven facts). Our opinion was that this decision was taken in good faith by the block producers, who, in order to protect concerned members, had used the tools at their disposal without waiting for ECAF's ruling. We believe that protection of members' private property at the launch of EOS blockchain, in the absence of a rapid and efficient arbitration process, justified this decision. Nevertheless, this case raised several questions :
Recently, Dan Larimer judged that "damage to community from ECAF is greater than funds we hope to restore to users", and called on block producers to "campaign on making a charitable donation to the cause of helping these people out".
Dan Larimer also suggested ways for token holders to amend the EOS Constitution. EOS Constitution may be amended by a vote of EOS token holders. This vote must collect:
A Ricardian contract establishes a contractual relationship between several parties, executed via computer code. A smart contract is a Ricardian contract deployed on a blockchain.
Original cypherpunk "code is law" idea is an ideal that even Bitcoin and Ethereum could not achieve. In reality, current blockchains all include a human factor in their governance. EOS includes this social layer directly in the protocol.
This is a paradigm shift in open blockchains universe, all consensus mechanisms combined. Cryptosphere generally places code well above human, as shown by recent setbacks on Ethereum, with Parity's multi-signature contract case : error is human and sanction is financial ! On EOS, members can submit disputes, and with the consent of independent arbitrators, block producers have the power to conduct operations that are impossible on most open blockchains, such as freezing accounts.
This supreme power attracts or frightens, and EOS is therefore at the heart of all polemics, but this governance model is precisely a differentiating factor that seduced franceos team.
ECAF is very controversial since mainnet launch, because its functioning is opaque, its governance centralized, and its state of development is little advanced. In fact, this arbitration forum was notably unable to address the complaints collected by EOS 911, concerning funds stolen to certain members via phishing of private keys.
EOS Constitution gives ECAF power to order block producers to freeze accounts when members' free consent is violated (for example, in cases of fraud, such as phishing attacks against certain users) :
"Members guarantee the right to contract and the right of private property between them, therefore, no property may change hands except with the consent of its owner, by a valid arbitration order or by community referendum. This Constitution does not create any positive rights for or between Members." Art. III - Rights
ECAF's problem concerns its legitimacy. There wasn't any on-chain tool to verify authenticity of complaints received, no tool to appoint arbitrators in a decentralized manner, and in general EOS Community has no visibility and very little power over arbitrators' actions.ECAF website is strangely empty, and general distrust against this organisation is understandable given the opacity of its operation. Arbitration rules have been developed, but little discussed, on the EOS Go forums.
ECAF Rules for Dispute Resolution brings together the rules for resolving disputes and conflicts that may arise between different members of EOS community.
Disputes that ECAF can arbitrate are the following :
EOS New York also suggested renaming ECAF to ECDR (EOS Center for Dispute Resolution) and clarifying its primary roles : maintaining a set of rules for dispute resolution and a database of independent ECDR arbitrators, as well as assisting parties using arbitration proceedings from start to finish.
For financing, just like franceos, EOS New York defends free market. Costs of arbitration proceedings should be deducted from funds involved in those proceedings.
Proposals from this top EOS block producer concerning arbitration process are very interesting : in order to provide as much transparency as possible, each arbitrator will have to sign the messages relating to the dispute with his key, if they are accompanied by all the rules used to arbitrate the case. Arbitrator information (location, costs, language, expertise, EOS account name) would be stored in a JSON to which any member of EOS Community would have access.
While each block producer is committed to respecting EOS Constitution, which grants decision-making authority over integrity of the blockchain to arbitrators, it would still require consent of EOS community as a whole. It is clear, however, that this is not the case ; moreover, ECAF does not seem to be in a position to fulfil the mission conferred on it by EOS Constitution and its Rules for Dispute Resolution.
However, team members are also individuals with diverse opinions. For example, top BPs' decision to freeze 7 accounts was not unanimously welcomed. Some members are uncompromising with "Code is Law" school of thought, from reading Nick Szabo's notes to recent events on EOS, without forgetting TheDAO case. Therefore, it is often difficult to reach a common position, and debates can be heated.
We place EOS Constitution above all bodies or members with a role to play in EOS governance. The idea of having a set of rules governing arbitration of disputes and conflicts between several members is attractive, but extremely complex to set up. Overall, we agree with Dan Larimer that this interventionism can be harmful. Thus, code becomes law, and block producers wishing to interfere in order to protect rights of certain members are above all subject to the principles defined in the Constitution.
We are in favour of a concise and precise Constitution, drafted in objective terms, setting out principles that cannot be subject to multiple interpretations. These are foundations of a strong society, and history shows that a human society based on a heavy, complex and subjective constitution creates many injustices and inefficiencies. If EOS Constitution needs to be revised, it is to be clearer, to establish principles that are unanimously accepted within EOS community, and especially token holders.
A decision-making body such as ECAF should be much better administered before it can influence block producers' decisions. Scope of its powers should be defined in Constitution itself and all arbitration procedures should be subject to on-chain ratification. Token holders should have maximum means available to be informed of decisions taken by arbitrators, and should have a significant weight in the appointment of arbitrators.
Current ECAF structure doesn't really satisfy needs for efficiency and impartiality dear to franceos team members. This also seems to be the case for many EOS members. However, criticism alone is totally unproductive. We wish to participate actively in discussions to improve this system and urge token holders to do the same.
Since computer code is resistant to corruption, but fragile to error, a balance must be found between absolutism of "code is law" and primacy of human over machine. Humans cannot always be superior to the code and vice versa, code cannot totally supplant human justice ; conditions for dispute resolution require risks sizing and perspective. As long as integrity of the ecosystem as a whole is not compromised, staying on "code is law" side is certainly the best option.Goal of decentralized value exchange systems is to have a fair, predictable and efficient allocation of wealth. This is only valid if code is well written. Risks must therefore be analysed on a case-by-case basis, on tangible and economic facts. The problem is therefore dimensioning of the resolutions. In our opinion, ECAF should only cover systemic cases.
Like many block producers, we are developing our code of conduct, which will be consistent with EOS Constitution, to clarify our core values, principles and roadmap. We will follow ECAF recommendations insofar as they are not the result of coercion by some members, do not violate Constitution or our values, and processes are objective and transparent.
Finally, we will always strive for the most decentralized and impartial kind of organization.
New version of EOS Constitution proposed by Block.one limits the power of arbitrators to enforce what is defined in the code; as such, we support this proposal.
Long live EOS Community !
