Weiss Ratings: EOS Downgraded Due to Centralization Issues
A number of ratings platforms have popped up over the past year or two in the ever increasingly competitive world of crypto. Their apparent aim is an attempt to compare tokens on various merits such as adoption, technology and investment risk. Weiss is one of the more respected ratings outlets and they have just dropped a bombshell on EOS.
EOS has had a bit of a rough ride recently. The Ethereum rivaling token was pumped leading up to the highly anticipated B1 event last weekend. There was a lot of fomo in anticipation of some big announcements when never really materialized. Since then EOS has dumped over 20 percent to its current level.
Weiss Ratings has just added fuel to the fire with a recent announcement stating that they were downgrading EOS due to centralization issues;
“EOS DOWNGRADE: #EOS has serious problems with centralization, and their event last week did anything to alleviate that, so we’ve severely downgraded its technology score. It’s now up to #ADA to launch a truly decentralized #PoS #blockchain. No pressure.”
The tweet included a blatant pump for Cardano which has been very slow getting off the ground in terms of development.
EOS Centralization Woes
The EOS centralization problem has been widely publicized. The system only has 21 nodes which check and validate transactions. Every 126 blocks 21 new nodes get elected by the stakeholders, this means that every round an elected node ‘mines’ 6 new blocks. It employs a Delegated Proof-of-Stake (DPOS) consensus model which means investors are rewarded with voting power and can decide who gets to mine the EOS blockchain.
The entire ecosystem is essentially built upon the EOS Core Arbitration Forum (ECAF), which is effectively its ‘judicial branch,’ and the Block Producers. The 21 elected block producers are rewarded with EOS tokens produced by inflation, the constant voting process means that those BP candidates with enough votes can replace current block producers.
It doesn’t end there. A recent report by blockchain analytics firm AnChain suggests that most users associated with dApps are actually bots. AnChain studied the top ten gambling apps on EOS and concluded that they accounted for 65% of all transactions on the EOS blockchain.
According to Coingeek the results of the analysis show that in the first quarter of this year bots comprised 51% of all unique accounts and over 75% of all transactions. The firm added; “In other words, every day the equivalence of $6 million USD in transaction volume is driven by bad bots.”
Since its 2019 high of $8.45 EOS has dumped 22% to its current price of $6.57 despite a Coinbase listing. It has dropped down to sixth spot being eclipsed by Litecoin which has surged into fourth as halving fomo heats up.