EOS is “like a feudal kingdom with tied servants,” says Weiss Ratings

Weiss Ratings claims that EOS, the fifth largest cryptocurrency by market capitalization, deserves a “top rating”. However, analysts also claim that the much hyped Ethereum rival has a fairly serious centralization problem – one that could warrant a downgrade in ratings in the future.

“The reality of what EOS is today”

As the world waits for EOS to officially roll out, popular cryptocurrency graders Weiss Ratings have shed a bright light on one of the much-hyped cryptocurrency’s biggest flaws. Writes Juan M. Villaverde for Weiss:

EOS’s dream won’t come true until it addresses its centralization issues, which have come more into focus with its launch this week.

According to Weisss, the success of EOS depends on this single “decisive factor”.

As Villaverde explains, decentralized cryptocurrency projects have “good breadth” when they share power and influence over a large group of participants. Conversely, centralized projects have exactly the opposite effect – which often contradicts the premises of the projects.

At the moment, EOS seems to fall into the latter category. As noted by Weiss:

Ironically, Block.one’s motto has always been “Decentralize Everything”. Indeed, EOS founder Dan Larimer is often quoted as saying that his main goal in life is “to create free market systems to secure life, freedom and property.

But unfortunately the motto of Block.one and the goal of Larimer are in stark contrast to the current reality of EOS.

“Like a feudal kingdom with tied servants”

Weiss isn’t just trying to capitalize on FUDing one of the hot players in the cryptocurrency market. According to the agency’s metrics, EOS is “one of the most centralized distributed ledgers in the world today”. explains Weiss:

The Gini coefficient, used by economists to measure the wealth distribution of countries, when applied to EOS is 97 (on a scale from 0 to 100). Even if you realize that crypto communities and countries are two different animals, the fact remains that any Gini coefficient above 60 is problematic.

At 97, the EOS coefficient is not in the charts. Like a feudal kingdom with contracted servants.

This comparison is actually quite apt.

Bitcoinist previously reported that the vast majority of EOS are being collected in very few wallets. Weiss also acknowledges this fact and notes that 10 token holders operate practically the entire network. These 10 owners will select 21 block producers, which in turn will allow the top 10 to dominate the entire platform.

“Downgrades are likely”

EOS is currently receiving a positive rating from Weiss, but this may change if centralization continues.

Regarding future ratings for EOS, Weiss notes:

When you invest in EOS, watch them like a hawk. That’s what we do. And if the poor latitude persists, downgrades are likely.

EOS is currently trading at $ 14.64, up 5.49 percent over the past 24 hours.

What do you think of the EOS centralization problem? Do you think the platform’s operators will push for decentralization? Let us know in the comments below!

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