Huobi was recently accused of colluding with EOS block producers and exchanging its voting power for a series of kickbacks. To address such issues and promote trust in the EOS system, a developer known on the internet as BlockchainKid has proposed a solution that mimics the whistleblower program of the US Securities and Exchange Commission (SEC).
BlockchainKid, the creator of block producer rating platform Mereo, calls his program WHISPER. He has used as a model the way the SEC polices banking institutions by rewarding whistleblowers for their courage to report malicious activities by their employers.
“This program, which officially began in 2010, sought to incentivize, reward and protect citizens who provide ‘tips’ related to violations of federal securities laws, including insider trading, stock manipulation and collusion. In return for [the] information [ … ] individuals were not only provided with employment protections but also financial rewards which generally range between 10% and 30% of the monetary sanctions imposed on guilty parties,” he wrote.
Admitting the complexities of translating this practice into a blockchain environment, BlockchainKid proposes using EOS’ delegated proof-of-stake model as a starting point.
If a whistleblower provides compelling evidence that proves beyond any shadow of a doubt that a block producer is acting in violation of the EOS constitution, the network itself could be modified to reward the person by using a fund set aside.
However, for a system like this to work, it has to add trust as an element to a network that is already built to trust its block producers.
“For a program like WHISPER to be effective, it must be governed by a committee of trusted and independent members from the EOS community,” BlockchainKid wrote.
To fund the system, he suggests allocating funds from any of three sources: the RAM fee account, the Worker Proposal Fund (WPF), or block producers themselves.
Besides the problem of determining whether whistleblowers are being completely truthful and accurate in their statements, there is also the issue of establishing what would count as “compelling” with regard to evidence.
A user called besthingsinliferfree echoed these concerns in the EOS subreddit:
“Sometimes it’s hard to get hard evidence for collusion. There’s a lot of circumstantial evidence and that might end up being the level to which arbitrators apply a ruling. If that’s the case, people can bring non-factual cases forward and might win.”
WHISPER could be a game-changer that enhances trust in the EOS system. But if poorly implemented, it might lead to “kangaroo courts” that could be weaponized against unpopular block producers who have not necessarily done anything egregious.