EOS Slashes Gains after Rally Fueled by Community’s Revolt Against Block.one
EOS investors took a chance to exit after a strong rally yesterday, prompted by the news that the EOS community voted to stop token vesting to Block.one, the developer of EOSIO, an open-sourced blockchain software.
At 08:48 UTC, EOS trades at USD 3.47 and is down almost 6% in a day. However, it's still up sharply as it traded below USD 3.20 before going almost vertical in the morning on Wednesday (UTC time). The rally helped some investors cash out as the price is still down by 29% in a month, trimming its gains over the past 12 months to 24%.
The EOS Network Foundation (ENF), composed of the dissatisfied members of the EOS community who claim that Block.one is no longer acting in the network’s best interests, has rebelled against the company in a bid to gain the EOS network’s intellectual property.
The foundation has also discussed with EOS block producers, decentralized entities that govern the EOS network, convincing them to halt payments to Block.one.
On December 8, the top 25 EOS block producers approved to halt issuing EOS 67m (USD 232m) that were scheduled to be unlocked and distributed to Block.one over the next six to seven years.
"Through a super majority consensus, the EOS network has taken its future in its own hands. This begins a new era for EOS and highlights the power of the blockchain to enable a community to stand up against corporate interests that don’t align with theirs," said Yves La Rose, who now runs the ENF.
La Rose, formerly the CEO of the internet company EOS Nation, announced that he is the CEO of the ENF back in August, saying that "EOS is in a state akin to exsanguination" and blaming Block.one for it.
In October, La Rose further continued his opposition against Block.one, highlighting that the network wants to fork out from Block.one. In a medium post, he wrote that “as it stands, EOS has been a failure of monumental proportions on various levels.”
Later at a virtual event, he declared his stance towards Block.one, saying:
"What we are experiencing is a shift whereby the EOS community is placing itself in a position to be able to move away from Block.one, essentially forking them out. Until this formal shift occurs Block.one will simply continue weighing EOS down."
Following the criticism by Yves and other members of the EOS community, Block.one revealed that it has inked a deal with Brock Pierce's Helios to bring additional growth to EOS and serve its "community through several high ambitions, including creating an EOS Venture Capital fund."
As part of the deal, Block.one agreed to pay EOS 45m to Helios. However, Block.one only controls EOS 8m as the remaining EOS 37m are still vesting — and given that the community has halted payments to Block.one, the firm might not get those tokens.
Nevertheless, while the ENF and Block.one have engaged in dialogues, they couldn't reach a conclusion. According to the ENF, one major problem was that the EOS intellectual property sits on Bullish’s—a yet-to-be-created exchange by Block.one—balance sheet.
This means that Block.one would have to purchase the EOS intellectual property from Bullish. This has set up a barrier particularly that Block.one wouldn't publicly commit to gaining the intellectual property from the exchange.
Meanwhile, Block.one co-founder Brock Pierce revealed Wednesday that he is seeking to reach a conclusion with Yves and the ENF.
“I’m working with Yves and the ENF on a mutually beneficial proposal for B1 and Bullish’s consideration that would allow the ENF and the EOS community to take a leadership role in the future of EOSIO’s development and intellectual property,” Pierce said.
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