EOS block producers are suspected of collusion

Singapore-based crypto exchange Huobi is accused of colluding with voters in elections for EOS block producers.

A spreadsheet has appeared online, the creation of which is attributed to Huobi employee Shi Feifi. The document, titled “Huobi Pool Account Data 20180911,” reveals the nuances of validator collusion in distributing revenue from block creation and mutually beneficial voting. A screenshot of the spreadsheet shows validators voting for each other and, in the case of Huobi, receiving payments from other bps.

There are 21 bps nodes that validate blocks in the EOS consensus proof-of-stake (dPoS) system. The table clearly shows Huobi voting for 20 validators, with 16 of them voting for Huobi in return.

The document shows that Huobi initially supported seven reserve bits, which were awaiting approval from block producers, were not functional. Huobi's support cost them some of their income. According to conservative estimates, such a business brought the exchange 1116 EOS per day, or about $6000. This is in addition to its own production of blocks, which bring Huobi a lot of profit.

Most likely, Huobi uses the EOS tokens of their clients who do not participate in the elections to make money from voting. The Bitfinex exchange does the same, which is also listed among the EOS validators. Overall, about 25% of tokens participate in the voting process.

Concerns about the possible centralizing influence of exchanges have been growing in the crypto community since the EOS network went live in June and voting for validators began.

Resources on EOS very centralized and concentrated. 10 addresses contain about 50% of all tokens, and only 21 validators are responsible for consensus, which allows their holders to control the network. Critics of EOS say its architect, Dan Larimer, was too hasty. Total votes, governance issues and arbitration disputes, as well as recent hacks and an incident where fake EOS tokensflood decentralized exchange, continue to plague the network.

 In response, Huobi released a statement denying the existence of financial transactions with other EOS nodes, but did not explicitly deny the authenticity of the spreadsheet.