Huobi Exchange Denies Involvement with EOS Voting Manipulation

Huobi Exchange denied its involvement with EOS voting, despite the alleged evidence of a table that lists the voting behavior of current block producers. In theory, it is possible to have agreements for the EOS blockchain, and block producers have a big influence in voting.

A widely circulated table shows the statistics of block producers backing the Huobi BP account:

The most serious allegation, based on the table, shows that Huobi paid to receive votes and become established in its position. The other problematic proposition is that Huobi uses the tokens deposited on the exchange to vote, accruing daily kickbacks from block producers. There is no limitation in the EOS protocol or constitution that forbids exchanges from using their deposit wallets to vote.

Blockchains with voting mechanisms and a network of delegates can, in theory, lead to collusion. A similar voting mechanism has been noted in the Lisk (LSK) election of delegates, which led to the establishment of a permanent list of delegates voting for each other.

The social media backlash points out that collusion among just 21 block producers is almost inevitable. With most BPs located in China, EOS has only a semi-decentralized ecosystem, in which a handful of entities receive significant rewards every day. Reddit users also point out that a similar case of voting collusion was seen in the Bitshares project, an earlier attempt at a decentralized system backed with Delegated Proof-of-Stake (DPoS).

Following the news of collusion, EOS kept its price levels, sinking slightly to $5.69. EOS has been especially resilient to bad news, including the recent EOSBet hack, and the creation of faked EOS tokens on the Newdex exchange.