Colin Talks Crypto, a leading pro-EOS YouTuber sold all of his assets in response to the announcement earlier that day. Dan Larimer left as CTO of Block.one, the firm that created the software that powers the EOS blockchain, on January 10.
Larimer has been missing since the end of the year.
As of this writing, EOS is the 16th-largest blockchain by market capitalization. Only behind privacy coin Monero and above decentralized finance system Aave. Its stock value plunged by almost a billion dollars after the Larimer announcement.
Block.one’s actions influenced EOS prospects, a company that concluded a year-long ICO that raised a record-breaking $4 billion. Its 140,000 BTC (and counting) holdings are now more important to Block.one than its large EOS position.
Block.one never promised to do anything more than offering the core software. It has kept that commitment.
Block.one New Options
Following Ethereum’s lead with gas, Block.one introduced a new option for users to pay for transactions as they go. The most hands-off approach to a major blockchain since Block.one introduced Bitcoin, rewinding the clock. It built the code for the software that powers EOS. Then just distributed it so that anyone who wanted to start it could.
When the code was revealed, a global alliance formed. Using Google Hangouts to plan the EOS rollout. After a few false starts, the worldwide launch committee got the chain going. As of June 14, 2018, EOS began generating blocks. All of this happened around Block.one. Block.one, despite being the largest single EOS token holder, only joined EOS governance last year. Maybe this is why the SEC chose Block.one. BLOCK.ONE CAN NOW SPEND ITS MILLIONS Early EOS supporters expected Block.one’s ICO revenues to be used to benefit the network. EOS tokens appreciate. This has enraged EOS fans.
Many people, including Colin Talks Crypto, have gone on. In the January 10 video, He said that he sold all of his EOS tokens because of that. The YouTuber is a well-known proponent of EOS on social media. He maintained an EOS proxy where holders may support his recommendations for the highest block producers. Following Larimer’s departure, Colin Talks Crypto also took off his proxy.
Before we continue, a few context considerations are in order, as the EOS environment can be perplexing.
Block.one is the business that managed the initial coin offering (ICO) that resulted in the launch of EOS. The ICO was held on Ethereum, and all tokens issued on Ethereum were moved over to EOS. Bloomberg stated in mid-2019 that the corporation had moreover $2 billion in cash and 140,000 BTC. Peter Thiel, a co-founder of PayPal and an early Facebook investor, is among its backers.
Block.one invests its ICO funds directly and indirectly through other funds it invested in, such as Mike Novogratz’s Galaxy Digital. In 2019, Novogratz sold all of Galaxy’s Block.one share.
The most perplexing element is undoubtedly this: Block. Created EOSIO, the software that powers EOS. Other public blockchains, such as Telos and Worldwide Asset Exchange (WAX), run on EOSIO.
Suvi Rinkinen, CEO of the Telos Foundation, verified to CoinDesk that Block has never invested in her business. She said in Telegram that Telos would stand firm. It is the community that builds or kills blockchains.
As the first and best-known public blockchain to use the EOSIO platform, EOS currently has the biggest market valuation of any other project. Block.one frequently speaks of developing EOSIO but rarely of EOS. This distinction is not lost on EOS holders, but it is unlikely to miss by casual onlookers.
EOS powers by Larimer’s delegated proof-of-stake consensus method, which was first employed on STEEM, so EOS token holders are constantly voting for the 21 entities which lead the chain. These parties may resolve disputes, validate transactions, and implement network enhancements.
These 21 entities are called “block producers,” and they earn new EOS with each Block for confirming transactions. They perform the same function as miners on the proof-of-work Bitcoin and Ethereum networks.
EOS supporters frequently claim that their blockchain is the most active, although subsequent research has severely doubted such claims.
While Larimer was planning his exit from Block.one, the company’s CEO, Brendan Blumer, was promoting bitcoin alongside a pro-regulatory vision for blockchain technology.
In an interview with a Forbes writer in October, Blumer remarked that Block.
One holding corporation sees several businesses emerge, but technology projects take an extended period.
In the interview, he stated that Block.one has three components. Developing EOSIO as a business tool, investing in other firms, and developing its enterprises (giving the social network Voice.com as his example).
He didn’t add that EOS token holders appear to be more important. Making investments that will drive value to EOS rather than EOSIO.
At the end of the Ethereum surge known as DeFi Summer in October. EOS holders asked Blumer on Twitter why the DeFi boom hadn’t reached EOS.
Some speculated that Block.one could have sponsored versions of Ethereum’s successful use cases on EOS. Where they could theoretically function with cheaper transaction fees.
In his response, Blumer noted that they are actively searching for #EOS DeFi that can match B1’s compliance criteria.
In January, the identical complaint resurfaced.
Blumer tweeted about DeFi’s inaccessibility to institutional investors using the hashtag #ProFi in January.
He wrote that The innovation in the #DeFi domain is revolutionary.
On the same day, he tweeted about how authorities are beginning to find benefits in Bitcoin as a form of money that is easier to monitor. This may be a reference to former US Treasury Secretary Larry Summers’ 2020 remark that money had “too much privacy.”
Blumer would go one step farther the next day, describing a compliance-first strategy as “playing the long game” in a Twitter thread.
In late November and December, his Twitter attention would shift to Bitcoin, as it would for most people in this field. He would post about Bitcoin replacing gold and an insufficient supply of Bitcoin to meet institutional demand.
It’s challenging to imagine EOS displacing, say, Lightning from within the Bitcoin community as we know it. EOS now operates based on payoffs to governance participants. There is no way of knowing how many of the existing block producers aren’t just one or a few entities or a few entities in cooperation.
This is a long-standing conflict in crypto between the early adopters who intended to create a separate economy and the newcomers who want to maximize profits by integrating it into the existing system.
Larimer, as we’ll see, favors the former, whereas Blumer appears to prefer the latter. He may look forward to a future in which institutional adopters rely on EOS for a rapid, cheap, and easy-to-track solution rather than Bitcoin’s present consumers.
A member of the Greymass team, Aaron Cox, told CoinDesk through Telegram that the EOS community would likely embrace further BTC integrations in the future.
String of Failures
In addition to Colin Talks Crypto and @blockchainkid, a slew of other social media users expressed their displeasure.
Larimer, likewise, is dissatisfied with the results of this work.
Despite the widespread belief that Larimer is prone to giving up on projects, he has been working on EOS for at least three years and counting. And it’s also essential to note the significant contributions he has made in the industry. Establishing the groundwork for a new consensus model and formulating the idea of decentralized autonomous groups are all part of this effort (DAOs).
Larimer originally announced his departure from Block.one on Hive, a hard fork of the last protocol he developed, Steem. After then, he confirmed the news on Voice, the Block, proving its veracity.
His next step is to develop more censorship-resistant technologies. He’s come to feel that you can’t deliver ‘liberty as a service,’ therefore he’ll concentrate my efforts on developing tools that individuals can use to safeguard their freedom.
These remarks appear to be in response to statements made by his co-founder above, emphasizing an investor- and regulator-friendly future for the system Larimer established. Larimer, for one, was irritated by an era in which every interaction with cryptocurrencies became a taxable event.
EOS fails as DAO
With the EOS community’s inability to fulfill its role as a DAO, Larimer is likewise unhappy. They didn’t have to rely on Block.one to build atop EOS, after all.
The EOS architecture expected token holders to support block producer candidates who added the most value to the blockchain by reinvesting their tokens in EOS apps. EOS also had a fund that EOS holders may pool to fund collaborative development.
In May 2019, the EOS block producers burned the “savings account” designed to fund such development, causing a short-term price boost but long-term concerns about the community’s commitment to a useable blockchain
And, for the most part, block makers who created did not receive community support. Instead, those who primarily used their riches to bribe voters to support them emerged to dominate leadership positions.
On the other hand, the CEO has defended the practice of buying votes on Twitter. Blumer claimed that by paying token holders for their votes, BP lowers the cost of network management.
Larimer, for his part, appeared to share CoinDesk’s fears about bribery.
After burning the savings account and diverting the block rewards to payoffs, the community expected Block.one to develop for it.
However, there has been little actual proof of Block.one’s desire to do so. After all, the returns on Bitcoin have been significantly higher.
Colin Talks Crypto went on to deliver another 18 minutes of rage after describing Larimer’s leaving as the “final straw.”
First, Voice is not EOS. Block.one announced when it was started in June 2019 that every Voice customer would get an EOS account. At the end of January 2020, it said it will not launch on EOS but “desire” to use the EOS public blockchain and “maybe others.”
In January, CEO Brendan Blumer took to Twitter to criticize CoinDesk’s piece. To diversify moderation and increase censorship resilience, he wrote, instead of repeating his June commitment.
EOS mainnet connectivity is a priority for the Voice.com team, according to CEO Salah Zalatimo in a blog comment released on January 8.
CoinDesk has only found one project funded by Block.one that runs on EOS is Everipedia. Mythical Games, another Block.one-backed startup, has announced its plan to run on EOS, although CoinDesk has not confirmed this. In December, a lead developer tweeted that the game planned to “link” with the mainnet. By press time, the company had not responded to a request for comment.
When asked if these were the company’s sole investments that ran on EOS, Block answered but didn’t answer the question.
EOSIO has been adopted by over 70 companies, according to Pantin. Block.one and its partner funds have made over 70 investments in them.
EOSIO is not the same as EOS
In October, many EOS investors were also encouraged by Google Cloud’s declaration that it will deploy a block producer candidate. Three months later, there have been no updates on this endeavor.
When approached again, Google representative Jane Khodos said, “Unfortunately, they can’t comment on our clients.”
Last week, a long-time EOS supporter emailed CoinDesk, saying it might soon write a post-mortem for the blockchain. Of course, EOS’s demise is doubtful. Blockchains are rarely totally extinguished.
However, many early supporters, including the man who invented it, appear to have had their hopes shattered.