CWC Newsletter #26 (May 11, 2020)
By Taylor Ryker, Analyst
Recap and Takeaways: Block.one, Brendan Blumer, and the EOS Community
In lieu of reporting on the top week's headlines, this post will examine a situation that transpired last week. EOS community members are currently upset with Block.one, the company that raised $4 billion in its initial coin offering and created the EOSIO source code that powers blockchains like the EOS mainnet, Telos, Wax, and Ultra to name a few. Tensions erupted on Twitter when two prominent social media accounts--Rektkid and Everything EOS--questioned the leadership and effectiveness of Block.one. The CEO of Block.one, Brendan Blumer, responded to their questions and it manifested into a tweet storm where Blumer answered many questions and concerns from the EOS community.
[TL:DR] The major grievances towards Block.one:
1. Block.one's Support for EOS vs. EOSIO
2. Additional Issues with Block.one by EOS Community: (1) Venture Funding and EOSIO Funding, (2) Decentralized Leadership and Block.one, (3) Strategic Vision vs. Roadmap, (4) Progress of EOSIO Code and Voice Social, (5) Marketing of EOS
3. Decline of EOS token price
Below, I have discussed the grievances and the responses to them by taking the voices directly from Twitter. I wanted to be fair and provide a platform where readers can see the actual voices of Brendan Blumer and EOS community members.
1. Block.one's Support for EOS vs. EOSIO
It all started on May 7, 2020 when rektkid tweeted: "Imagine raising $4bn in ICO money, then completely distancing yourselves from the project that distributed the reward. Then using the raise to buy 140k BTC for you and your shareholders. You can't make this shit up."
Blumer's commitment to EOS: "#EOS is the first major public network to be launched with #EOSIO software and it has quickly become one of the largest dapp ecosystems globally, so we take our involvement seriously because the stakes are high."
Token State responded to Blumer's take on EOSIO: "The issue here is with EOS token holders. How does all this fit in with EOS main net value proposition? It would be the same as if Vitalik [Buterin] started referring to Ethereum as ETHIO, which includes Ethereum Classic."
Dallas Johnson added: "#EOS holders need a stronger commitment from B1 that they will build up $EOS not just EOSIO. After all B1 did make their $4b from the EOS token sale. At the moment it feels like B1 loosely believe in the EOS blockchain but could change if the wind changes. Strong belief matters."
Blumer on EOSIO: "While we continue to advance #EOSIO through R&D, developer feedback, and our own application, we believe it is what B1 doesn't do for #EOS that makes it so revolutionary. This informs our measured approach to prioritise [sic] its distributed autonomy."
A caveat, Blumer tweeted: "It's important to not misinterpret this statement. #EOS is operated and governed by token holders and understanding the distinction between the EOS network and Block.one is important."
Blumer believes that, "The #EOS community is extraordinarily diverse and I am thankful that so many of you engage so heavily with me. I wish there was a way to make all of you happy all the time, but between token holders, dapp authors, network operators, and even regulators there is an enormous set of considerations that must go into everything we do, and trade offs that we must chose between. That said, through our Public Blockchain Engagement team, we are actively working on our first steps in voting, and the subsequent plans related to our engagement."
Blumer and Block.one's continued support of the EOS mainnet: "#EOS is an unprecedented open source collaboration, and it's autonomous success is of paramount importance to B1, and me personally. The road ahead is very exciting, and we will get there together."
2. Additional Issues with Block.one by EOS Community
1. Venture Funding and EOSIO Funding
Everything EOS polled the community: "is 'EOS VC' an accurate description of what the $1b fund is investing in?" From 295 voters, 66.8% felt that "No, EOS VC is misleading." In a follow-up tweet, Everything EOS asked if Block.one and Brendan Blumer could still be counted on their previous commitment that "EOS VC is a program that is going to deploy $1 billion of capital into EOS projects over the course of the next couple of years."
Blumer responded to the follow-up tweet: "Of course! Our General Partners Mike Novogratz, FinLab AG, and SVK Crypto continue to lead the charge, and Block.one also has a team managing direct investments."
Speaking about accountability, Blumer voiced that "we support startups that have a thoughtful business plan and show signs of execution capability, and I'm very proud of many of our #EOS VC entrepreneurs! We do not invest in everything that uses the word EOS. We have fiduciary responsibility to B1 shareholders."
Blumer continued by tweeting: "Exactly my thoughts, when people approach us in such a way that they signal they're deciding their tech stack based on where they can get money, I move on quickly. The best projects are the ones that realise [sic] that #EOSIO is the only option."
Responding to Blumer by Adam Dorfman: "If people were deciding their tech stack need solely on where they can get money, EOS would be the worst option man. You don't add EOS to the tech stack because of access to venture capital money. In fact, adding EOS to your stack limits your venture capital options."
On the issue of venture funding solely benefiting EOS-based companies, Syed Jafri asked: "Can you confirm that all investments will use EOSIO technology in some capacity? Some investments have gone to projects that are publicly solely on Ethereum or other blockchains."
In response to Jafri, Blumer answered: "Sometimes investments are made alongside blockchain ambitions and side letters are signed where their intent to leverage EOSIO is documented. B1 can not control companies we invest in but we do include it as part of the investment mandate, which is the most we can legally do."
Jumping into the discussion between Jafri and Blumer, Stefan Schuetze from FinLab AG chimed: "We from FinLab AG have in all of our FinLab EOSVC fund investment agreements implemented #EOSIO adoption & integration clauses & in addition integrated milestone payments connected to these clauses and conversion."
2. Decentralized Leadership and Block.one
On leadership, msol, an EOS community member, declared that Blumer and Block.one "said that they care tremendously about their own stake and are committed to building out the #EOS ecosystem. They also believe that a decentralized EOS is more powerful than a centralized EOS."
Blumer responded to msol: "We spend a lot of time studying the state of the network and exploring how best to use our position to contribute as part of the greater EOS community, but are always sensitive to the delicately balanced ecosystem that is responsible for its successes to date."
On May 11, 2020, Blumer spoke that "Building new market leading software and potentially launching new entities that can be elected by proxy to help unify the global community is a large role and an enormous undertaking to do correctly. What else do you think B1 should do and how much would be too much?"
Blumer tweeted: "B1 is focused on improving our open source software, and positively adding to the network through our minority vote, but EOS's future rests on the shoulders of a global community, and that decentralization is more valuable than us attempting to play a dictatorial role."
In addition, Blumer believes that, "Block.one isn't trying to lay claim to the #EOS community. That isn't going to change."
Blumer, on Block.one leadership: "As CEO of B1, I get to see many sides of the #EOS community across the world which is extremely rewarding and insightful, but it also comes with daily exposure to those that have a different vision for how we should spend our time and resources."
On Blumer's leadership at Block.one: "Even when unfair, the daily scrutiny is something that comes with the territory of my job responsibilities, but I often feel compelled to stand up for the hundreds of people in B1 that dedicate their lives to advance EOSIO, it's application, and it's mission."
3. Strategic Vision vs. Roadmap
Blumer believes that at Block.one, "we draw a balance, and have released one strategic vision piece, which is not a development roadmap. When answering the question 'Where roadmap?!' my answer is that further roadmaps of explicit features, without timelines, and amidst rapid industry development is not productive." Here is Block.one's Strategic Vision.
In addition, Blumer wrote that Dan Larimer "and team are actively designing the next generations of our software, and unlike many of these other protocols which are spending time on fancy roadmaps without timelines, we are focused on delivering the future, and keeping it close to the vest until it's ready."
Community member Ivan Mitko responded to Blumer's stance on a roadmap: "'Keeping it close to the vest until its ready' you only started doing this maybe 6 months ago. But for about 2-3 years you and Dan were constantly teasing new products that did not materialize up until now. I don't know why I am even bothered, but you are very misleading." Mitko added: "Block.one itself published a roadmap without any timelines (I believe) last year. How can you say something like you just did publicly?"
In response to Mitko, Blumer tweeted that "Our strategic vision is our abstract on direction. Details of future generations will come when they are ready. To be frank, I'm as honest and sincere as I know how to be. My lawyers already feel I often over engage, but I try to stay close to you all and address as much as possible."
4. Progress of EOSIO Code and Voice Social
EOS community members have voiced their concerns that Block.one is an exit scam where Brendan Blumer and Dan Larimer will not produce code and leave for another project. To counter perceptions of no progress, Block.one CEO Brendan Blumer responded: "We have never had more devs building on and with #EOSIO technology."
In addition, Blumer tweeted: "This week B1 crossed 300 employees globally, primarily comprising of software teams. New #EOSIO tools, generations, and applications continue to be developed and released at an unmatched pace, and I couldn't be more proud of the talent and hard work that surrounds me each day!"
MaxShill defended Block.one's progress on twitter that created another discussion between community members and Brendan Blumer: "Being unhappy at Block.one's progress and Brendan Blumer, Dan Larimer's work so far is like being upset at Tesla and Elon Musk in 2005...which is almost like ten years before you and the masses first heard of Teslas. #patience for #EOS, it takes time to change the world!"
Progress by Block.one is well-documented in releasing updated fixes and upgrades to the EOSIO source code. In addition, Block.one has released many tools, documentations, webinar tutorials, and a testnet to further help developers build out new decentralized applications and smart contracts on the EOS mainnet and other EOSIO sisterchains.
On Voice progress, Blumer stated that, "Voice is in beta right now. We are focused on iterating as fast as possible on the tokenomics and meeting compliance regulations to prepare for live launch. Voice's future architecture will depend greatly on what's required to allow token transferability in various jurisdictions." And added that, "The timelines around these types of discussions and clarification are often times beyond our control."
Superheaters, an EOS community member, stated in regards to Voice: "It takes you two years to develop a Voice." Blumer responded: "It will be longer than two years to compete with the billions of dollars and decades of product innovation that have been poured into the incumbent platforms. The average social media network takes many years to develop and gain traction, but I believe we'll be faster than most."
However, the facts that progress of Voice is growing: (1) Block.one patents for Voice on identification and social post tokenomics, (2) recent hiring of a Director of Mobile Engineering, (3) active hiring of Voice staff and developers, (4) substantial funding, (5) Voice launch outside of US in Summer 2020, and (6) worldwide launch in Quarter 1 of 2021.
5. Marketing of EOS
In response to lack of marketing of EOS, Blumer felt that "More importantly we need to keep improving #EOSIO so that it is ready to replace traditional databases at any scale. We don't prioritise [sic] marketing for the sake of marketing, we are working towards a more sustainable large scale business plan than most of our protocol peers."
Also, Blumer said, "The technology is very early in its evolutionary journey, and our community will evolve when we feel ready to market a new infrastructure to large corporations. Others have brought corporates on too early only to teach them how limited it's application is at scale."
4. Decline in EOS token price
In response to the EOS token price decline, Blumer declared that "The sentiment towards block.one is too closely tied to the price of one implementation of our software. #EOS is revolutionary, but it's not us. That said, we continue to hodl our EOS and stay focused on building technology."
Slevin, an EOS community member, posed the concern about the decline in EOS token price: "Nevertheless the EOS price is dropping further and further! Even if you give a shit about us stupid investors...I heard that not even the BPs are in profitable range. How long can they keep the network running?"
Blumer responded to Slevin: "The #EOS network wasn't launched, and isn't operated or governed by B1; its one of several public chains leveraging #EOSIO open source software. EOS is an aligned decentralized digital currency that is on its own evolutionary path, and we're excited about our minority position."
And Blumer added: "We will continue building #EOSIO and measuring ourself by its performance, but we don't optimise [sic] for the price of #EOS, which represents a collective project much greater than a single centralised [sic] company."
Conclusion
Chaney Moore summed up the source of the current frustration: "It's simply a reflection of B1's (insert Dan/Brendan) withdrawal from sharing with the community in the last 9 months as compared to what the community was accustomed to...I think that this is the major problem and the current discontent with many in the community. You and Dan would discuss about how the products you were building would be good for EOS."
Block.one has taken actions to rectify their poor community relations with the creation of the Public Blockchain Engagement division. This past week saw Kevin Rose, formerly of EOS New York and now at Block.one, announce that the newly established Public Blockchain Engagement (PBE) division is reaching out to the community for feedback on what are the greatest milestones for the EOSIO community. Please send your thoughts to pbe@block.one where the PBE will choose the best to share back to the community.
The reaching out by the PBE is a welcoming sign that the teams behind Block.one are not abandoning the EOS mainnet community. Community members speculate that the upcoming Block.one vote in late May for Block Producers on the EOS mainnet will be decided by a combination of the PBE division, a newly-formed EOS Foundation, and a platform for token holders to voice their opinions on voting.
The past week saw Block.one and Brendan Blumer's continued support of the EOS community and EOSIO ecosystem. Even with legitimate concerns about the EOS mainnet and Block.one's leadership, the twitter conversations reveal that Brendan Blumer is still committed to its development and progress.
Disclaimer: KJ Kingsley is not a financial advisor and holds the digital tokens or cryptocurrencies represented in the content above. This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this post constitutes a solicitation, recommendation, endorsement, or offer by myself to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of any of the author’s employers.