Thank you so much for this post, for those people like me that are interested in the details but not as technically savvy as those involved in development, this DPOS history lesson is very comprehensible.
On a slightly different topic, CZ and Binance have just released their 'apology' letter to the Steem community that was less than satisfactory. It includes veiled threats to the Steem token and Steem users.
Hopefully, the STEEM community and TRON will reach a consensus in an efficient manner. If they fail to reach an agreement and it poses potential risks/damages to STEEM users on Binance, we reserve the right to take corresponding actions at the consent of our users.
So, effectively they still RESERVE the right to interfere in Steem's governance in certain cases.
Simultaneously, this seems to somewhat contradict other statements in the letter, specifically that Binance states it will,
stay neutral and has no interest in on-chain governance beyond the Binance ecosystem.
As a community member, I find this troubling as CZ also recently tweeted that Binance is considering integrating some form of off-chain 'voting' mechanism from their website.
Interestingly, if we implement this vote feature, Binance users collectively will have, by far, the deciding vote. People who care may need to deposit to Binance to vote.
This thread includes statements, such as "we don't want to do this.." but "we may be forced to implement this now".
These are clear and continued threats to Steem's governance structure by a centralized entity and outside party.
Personally, I'm completely against this as it poses yet another clear threat to on-chain governance and decentralized protocols. I don't trust binance or investors with no 'skin in the game' to have undue influence over any blockchain. In order to vote, users should stake their tokens directly to the blockchain, imo.
As someone who operates a crypto-exchange what are your thoughts on this?
First, exchanges voting with custodial stake without permission is completely unacceptable, in my opinion. People deposit coins on exchanges to trade, not to have the exchange make governance decisions for them.
Exchanges are typically not stakeholders of a chain, so they should not have influence in the governance of the chain, because their interests are not likely to be aligned with the chain's stakeholders and giving them influence only opens up an avenue of abuse, similar to what we saw recently by Binance.
Given the point above, it makes no sense to me that most informed voters would want to proxy their votes to an exchange, so I think that a plan like that proposed by CZ will only be used to take advantage of uninformed voters who don't understand the potential risks associated with giving power to the exchange they hold funds on.
I am utterly opposed to his suggested plan.
I'm glad you feel so strongly about this issue.
I think the Steem community should make this abundantly clear to Binance and all other exchanges that these proposals are completely unacceptable and will be vehemently opposed.
Thanks
The obvious logic error in his argument lies here:
He's conflating two opposing ideas here: In one, he's suggesting users may still want to vote their stake while on an exchange. I can a case for that, but no simple mechanism for doing so unless the chain allows for partial voting and only if the chain "trusts" exchanges to only vote as their user's direct. That's too much trust, in my opinon.
Then in two, he's talking about Binance users collectively having the deciding vote. But this is deception at it's finest: he's implying that whatever Binance decides to vote is the actual voting wish of the users on Binance. This makes no sense. For example, it should be obvious on the face of it that many Binance users will want to vote in different ways. His proposal doesn't allow for this, so it directly contradicts his point 1: users would in fact be giving up their "right to vote", they can't make their own decisions in this case, they've handed over that "right to vote" to Binance instead.
I agree, this is why I wanted to raise the issue because these statements are, first off, illogical and second, they are contradictory.
While I cannot speak for Cz intentions in these statements, I feel they certainly imply that Binance has a desire to retain rights to influence/participate in voting/governance - as you correctly point out - as they see fit.
This statement refers to elevating the interests of the exchange over the interests of the Steem token holders and the community as a whole.
Binance Terms of Use:
https://www.binance.com/en/terms
The perfect trap.
They have the upper hand because they know how the law function. If people want to understand what Binance can do or not, they just need to know what the law allows or not.
All the rest is just public relations and chit-chat.
Oh joy, if this is anything like the altered Steemit.com TOS this should be a treat to read.
Joking aside, I did follow the link and looked at their terms of service as I was curious as to what jurisdiction Binance TOS applies to.
Apparently, in most cases it applies to wherever jurisdiction the user happens to reside/operate from.
From the Binance end of things they seem to change their base of operations quite frequently: Hong Kong, Malta, Singapore...
From your link though, it would appear that they settle disputes following the rules of the Singapore International Arbitration Centre (SIAC) and the Small Claims Tribunals of Singapore (“SCT”).
So, that's interesting...
So, taking hostage their customers' Steem should be illegal in Singapore? And a ground for criminal charges?
I wasn't specifically referring to this, just that I was curious what laws apply to exchanges.
Nevertheless, Binance clearly misappropriated user funds, some have called their actions embezzlement and there's certainly a case to be made in both instances.
I'm not advocating legal action, here. I think Binance / Poloniex and Tron are seriously damaging their reputations and businesses with their recent actions that have led to this fiasco. They're getting caught in their own web of lies and have to continue spinning more lies to continue on this charade. We'll see how long they can keep it up.
I am not advocating anything either. Just asking ...
By the way, it's just a rumor gleaned from various Twitter tweets but it seems that this seizing of funds and voting is a regular praxis on EOS.
I'm familiar with the EOS governance issues, so I can say that it isn't exactly the same situation we're observing on Steem.
EOS funds are not "seized", misappropriated might be the word, but exchanges such as Huobi powerup user tokens in order to vote themselves into the top Block Producer (BP) positions and in many cases they vote in a 2nd proxy BP in order to maximize their BP producer daily earnings.
Both DPOS systems are, in essence, under sybil attack (sock puppets).
The main difference that I see is that Justin Sun and Tron are attempting to control ALL of the witness positions with their proxies under the control of 1 entity. Thus, Steem's situation is currently more hazardous in my estimation.
Thanks for this insight about the EOS BP situation.
And yes, Steem is facing de facto centralization. Would already be centralized...
The whole thing CZ did was tricky, from posting a screenshot of partial SF222 code, to the delay of powering down, apology letter.