Weiss Crypto Ratings Downgrades EOS on Account of Centralization
The rating agency, which spent some time touting the innovation of the EOS network, now sees the project as overly reliant on centralization.
Weiss Crypto Ratings, the agency tracking the rise and fall of blockchain networks and cryptocurrencies, has downgraded its assessment for the EOS network. While Weiss previously praised EOS for its adoption and innovation, the agency now believes EOS is overly centralized.
The loss of confidence in EOS started a few days ago after Weiss showed its disapproval of the underwhelming announcement of Block.one about the launch of the Voice social media.
So far, social media applications on the blockchain have shown little success, and have devolved into bot-driven pyramid schemes, where influence can be bought or multiplied in ways that are not organic. Additionally, reports of bot activity on distributed apps undermined the position of EOS.
The current overall rating for EOS is B, with an A- rating for technology and adoption, but a C- rating for the risk/reward ratio.
The accusations of centralization stem from the system of voting, where large-scale owners of EOS can affect the composition of block producers. Recently, EOS New York was voted out of the top 21 list of entities with the right to secure the network. EOS New York was one of the most vocal supporters, being instrumental in organizing the community and for educational efforts.
At the same time, power and influence meant that exchanges and Chinese block producers have taken over the network, with less diversity in the geographical distribution of block producers.
Because of the large EOS holdings maintained by exchanges, they are also able to hold much influence over the network. A similar thing happened to BitShares, an earlier network akin to EOS, where exchanges were the main source of block production, and even faked high transaction volumes between each other.
Following the news, EOS slid by more than 16% week-on-week, down to $6.25, just days after the asset managed to rally above $8.
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