With the introduction of Bitcoin (and blockchain technology) in 2009 the focus was strongly on building distributed, trusted, peer to peer, and self-governing ecosystems. The successful launch of Bitcoin opened the door for business opportunities that are both new and revolutionary. Many people believe that blockchain technology has the potential to have the same, or bigger, impact than internet had when it was introduced.

The distributed nature of blockchains make it difficult for any government or authority to control or shut down any of these ecosystems. The ability to do trusted per-to-peer transactions eliminates the need of a middleman and will disrupt many well established businesses; e.g. banking, insurance, and the music industries.

The idea behind self-governing is to put the power of decision making in the hands of the community. Self-governing is a good idea, but has some limitations. It is all good and well for the community to decide how the blockchain should be developed and evolve, until there is disagreement on the way forward. We have seen many blockchains fork and have bitter rivalries after a split in the community. A good example is the bad blood between Bitcoin and Bitcoin Cash. On the other hand, by introducing a governance model on a blockchain, you have the risk of putting the power in a few people’s hands deciding the future of the blockchain. This is one of the things the purists want to guard against. There is no easy answer or a one solution fits all. The problems is that without having a governing body it is difficult to resolve conflict within a community, or to make changes to a blockchain without the potential risk of a hard fork.

EOS has decided to introduce a governance structure, trying to ensure the community has a voice through a voting system and at the same time have the flexibility to make changes to the code or the way the blockchain is governed. The community gets to vote for 21 Block Producers that will produce blocks and represent them. One of the duties of Block Producers is to execute the will of the people.  Changes to the code or how the blockchain is governed can only be made if supported by 15 of the 21 Block Producers (two thirds, plus one).

The EOS Constitution was created to direct the governance of the blockchain. The Constitution is made up of 20 articles and came into effect with the launch of the EOS MainNet. (1) Any changes to the Constitution requires support from the community. Article XI states that amendments to the Constitution can only be made if: “… by a vote of the token holders with no less than 15% vote participation among tokens and no fewer than 10% more Yes than No votes, sustained for 30 continuous days within a 120 day period”. (1)

Using governance structures on blockchain is breaking new ground and there are not many examples to learn from. Mistakes will be made, but hopefully over time it will reach maturity proving to be a useful tool in blockchain evolution.

I think some mistakes have been made with the introduction of the EOS Constitution.

Take Article II as an example: “Article II – No Perjury. Members shall be liable for losses caused by false or misleading attestations and shall forfeit any profit gained thereby.” (1) The question is who will determine what a false or misleading attestation is and how do you determine what profit was gained? Are there ways and tools in place to enforce this? This will take lots of very cleaver people and many pages to document and define it.

Another example is Article IV which currently is clearly being violated. Article IV states: “No Vote Buying. No Member shall offer nor accept anything of value in exchange for a vote of any type, nor shall any Member unduly influence the vote of another”. (1) Whale voters and some Block Producers are clearly working together violating this Article and there is no way to enforce this Article. If you can’t enforce it, it becomes meaningless.

In addition, I totally disagree with Article XV: “Termination of Agreement. A Member is automatically released from all revocable obligations under this Constitution 3 years after the last transaction signed by that Member is incorporated into the blockchain. After 3 years of inactivity an account may be put up for auction and the proceeds distributed to all Members according to the system contract provisions then in effect for such redistribution”. (1) This feels a little bit like the bail-in the Cyprus government had enforced on all bank account holders. Instead of the government bailing out the banks during their financial crisis, money was taken from the bank account holders accounts. In my opinion Article XV should be scraped as soon as possible.

Instead of punishing token holders who are not active on the EOS blockchain, we should find way to encourage them to become active community members. The REX proposal where token holder who stake their EOS tokens and rent out their CPU and bandwidth, and are being rewarded by earning interest, is a step in the right direction.

There are many different opinions regarding the EOS Constitution varying from “keep it as is” to more radical changes. Dan Larimer makes the following comment: “From watching the community launch an EOS.IO based blockchain, I have learned a lot already. I have seen that if you give people arbitrary power to resolve arbitrary disputes then everything becomes a dispute and the decisions made are arbitrary. The more power the arbiter has, the more vicious and petty the disputes become and the less predictable the outcome.” (2)

Kyle (from The Awakenment) support Dan’s views and are proposing a simplified constitution. Both support the principle – the intent of the code is law. Code should only be changed if it is not behaving the way it was intended. This will allow bug fixes or changes to the code based on what the intent was. By introducing this principle it removes any room for dispute. Kyle has written a good article, as well as made a video, on his views. (3) (4)

Most of the Articles in the EOS Constitutions are good in principle and well-intended, but if it can’t be enforced it is useless. In my opinion it should be simple to decide what should be in the EOS Constitution. A guiding principle should be – can it be enforced and do we have the tools in place to enforce it?

I like Kyle proposal of an Incremental Constitution. (4) Start with one or two Articles and increase them as we learn and have the tools in place to enforce them.


(1) https://eostoolkit.io/governance

(2) https://medium.com/@bytemaster/the-intent-of-code-is-law-c0e0cd318032 Dan

(3) https://www.youtube.com/watch?v=MBP8KBiBG7U Kyle

(4) https://steemit.com/eos/@eosvibes/proposal-for-an-incremental-constitution-and-for-ecaf-to-be-removed-from-being-the-sole-protocol-layer-arbitrator-on-eos

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  1. Conceptskip

    Thx for covering this important topic here! To be honest i feel it’s a bit one-sided though. Dan has revised his stance for whatever reason, but he an Kyle are not the only voices in this matter. Many prominent players favour an adapted version of the current constitution, or other versions of this. For a general discussion it would be worthwhile to mention those as well.

  2. Infosion

    Nice reading such a critical view on EOS! Thanks for this great article, you raised so many good points. Wouldn’t know where to start..! Thanks for explaining a lot of problems I didn’t know exist but are obviously very important.

  3. CryptosDecrypted

    Thanks for compiling some of the issues currently facing EOS governance. I agree that a lot of work lies ahead to ‘pin-down’ aspects of the constitution but also wish to avoid a race to the bottom where petty disputes endlessly muddy the water. It’s going to be a few years, at least, before any stable consensus is reached, but I guess staying engaged is a crucial first step and articles like this promote such engagement.