EOS Price Treads Water as Parent Company Targets Voting Cartels

EOS traded in the direction of the market on Sunday, as prices hovered near break-even following a sharp drop in trading volumes. Long-term, the outlook on EOS has gotten brighter after Block.one, the network’s parent company, reaffirmed its commitment to improving its blockchain governance structure.

EOS/USD Update

The price of EOS hovered within a narrow range over the weekend. On Sunday, the digital currency fluctuated between $5.66 and $5.75 on major exchanges, according to CoinMarketCap. At last check, EOS was valued at $5.69, having declined 0.5% from the previous close.

Capitalized at $5.2 billion, EOS is the world’s fifth largest cryptocurrency in terms of market value. It was briefly overtaken last month by Stellar XLM, whose coin value skyrocketed on growing mainstream adoption.

Overall trading of EOS was light on Sunday, with turnover amounting to less than $500 million on global exchanges. That represents a decline of more than 30% compared with last week.

The coin remains in a firm long-term downtrend but has adopted more range-bound trading behavior since mid-August. Although EOS has shown a tendency of moving independently of the broader market (it peaked when other cryptos were declining heavily), its near-term outlook is tied to broader movements in the digital asset space. As such, investors should expect EOS to maintain its range-bound nature in the immediate future unless fundamental developments suggest otherwise (see below).

Parent Company Pledges to Stop Voting Cartels

Block.one, the company behind EOS, announced earlier this month it will use the proceeds of its $4 billion crowdsale to stem block producers from forming voting cartels. These efforts are intended to ensure that EOS is governed by a “free and democratic election process.”

Brendan Blumer, Block.one’s CEO, issued the following statement in an Oct. 1 blog post:

“We are aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims. We believe it is important to ensure a free and democratic election process within EOS and may, as we deem appropriate, vote with other holders to reinforce the integrity of this process.”

Blumer’s statement was released amid allegations of EOS voter collusion involving Huobi, the Singapore-based digital currency exchange. The allegations were based on information obtained by EOSONE, which purports to show Huobi receiving payments from other block producers. Accusations of voter collusion are possible given EOS’ delegated proof-of-stake architecture, which relies on 21 block producers to validate transactions on the blockchain.

While Huobi has maintained its innocence, it has not denied the authenticity of the leaked information first obtained by EOSONE (in this case, screenshots of a spreadsheet that show payments being allocated to the exchange).

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi