Over the past few days, the ex-Steem blockchain community has gained an upper hand over Justin Sun and his recently acquired Steemit startup. After blaming Sun for attempting to centralize their network, a substantial part of the original Steem community successfully launched a hard fork called Hive.
Steem stakeholders are now actively migrating to the new chain. Its in-house token HIVE, which has been distributed among STEEM holders via an airdrop, is trading for a 20% premium over STEEM on some exchanges. Nonetheless, the network split hasn’t been without incident, as some complaints regarding the airdrop distribution were reported.
What is the conflict all about?
The dispute can be traced back to February 2020. At the time, Justin Sun, an eminent Chinese tech entrepreneur with an estimated net worth of $200 million, purchased Steemit, Inc. — a startup founded by Ned Scott and Dan Larimer, the same people who launched the Steem blockchain. The company is known primarily for releasing Steem-based alternatives for key social media outlets like Reddit, YouTube and Instagram.
It is still not clear whether Sun purchased all shares of Steemit, since Scott’s original tweet announcing that he had sold Steemit to Sun has been deleted. Official press kits refer to the merger as a “strategic partnership” between Steemit and Tron, a major cryptocurrency firm launched by the Chinese entrepreneur.
As Steemit managing director Elizabeth Powell told Cointelegraph soon after the acquisition, the Tron partnership was vital for her company’s financial health. According to reports from November 2018, Steemit had to lay off more than 70% of its staff due to market conditions.
The community appeared less optimistic about the merger. On Feb. 24, a group of Steem stakeholders performed a soft fork and deactivated the so-called “ninja-mined stake,” a stash of approximately 74 million STEEM tokens historically owned by Steemit. As a Steem Witness previously explained to Cointelegraph, the stake has been a long-standing concern for the Steem community, and stakeholders became even more worried about its future once Justin Sun became Steemit’s CEO.
In response, Tron arranged what has since been described as a "hostile takeover." On March 2, three major cryptocurrency exchanges that have STEEM tokens listed on their platforms, namely Binance, Huobi and Poloniex, unwittingly used customer deposits to stake large amounts of STEEM tokens to vote in support of removing the original witnesses.
As a result, all of the top-20 witnesses were eventually replaced with accounts powered by Steemit, Binance, Huobi and Poloniex. Sun then described the takeover as a successful attempt at defeating the “hackers” who froze assets legally owned by Steemit.
Soon after Sun’s announcement, both Binance and Huobi declared that they were removing their votes in order to undo the takeover, as they were initially not fully aware of the situation to which they contributed. Additionally, Binance CEO Changpeng Zhao appeared to distance himself from Sun in an interview with Cointelegraph.
Meanwhile, the Steem community was actively trying to reclaim its space back by mobilizing tokens. As of March 6, 10 out of 20 top witnesses were “approved,” while the remaining 10 witnesses appeared to be Steemit-affiliated players. A discussion between a group of Steem community members and Justin Sun was also held around the same time. According to a recording of the conversation, Sun mentioned that they wanted to "withdraw our votes also ASAP to give rights back to the community."
Full article on CoinTelegraph
Now we will witness whichever become successful obsolete, a centralized governance or the decentralized governance.
Are you still posting on Steemit?
I stop posting.on steemit few days ago. My last activity is Powering down all SP.
Post on Steemit