In a move that both stunned and outraged the Steem community, major exchanges used the voting power of the tokens they had to restructure consensus algorithms across the platform.
Justin sun was charged with revenge Steem
By acquiring Steemit, Justin Sun gained control of a sizable portion of Steem's consensus votes. This fact is due to the platform's Delegated proof-of-stake (DPoS) architecture and Steemit is the most active element of the network. Fearing that the Sun might cause chaos, the Steem team launched a soft fork last week to eliminate the influence of Steemit.
Can be interpreted as retaliation, some centralized exchanges have used their own voting influence to bring witnesses affiliated with Steemit to the top 20 positions. It is these witnesses that create the blocks in the foundation. Therefore, if the evidence is correct, Steemit and Justin Sun have established centralized control over Steem.
Waking up to find that @justinsuntron has taken over the #Steem Blockchain in a hostile manner. By using 84M steem from @binance and huobi as well as his own exchange to vote in their own BPs and fork the chain. @cz_binance you support this? #Tron DeCEnTraLIzinG Web skin
– Justine (@ThemeanJustine) March 2, 2020
"Wake up and see Justin Sun taking the Steem Blockchain in a hostile way. By using 84 million steems from Binance and Huobi as well as his own exchange to vote for BPs and fork chain. Does CZ support this? "
The reason why the exchanges act like this is unknown, but Sun is currently being charged with bribery. Yesterday, the Steem network was shut down, opening many questions about what the real plan behind this action might be.
Vitalik Buterin tweeted about the incident, noting the obvious sign of collusion:
Apparently Steem DPOS got taken over by big exchanges voting with depositors 'funds. Can anyone confirm and / or provide details?
Seems like the first big instance of a “de facto bribe attack” on coin voting (the bribe being exchs giving hodlers convenience and taking their votes) https://t.co/cEX7PLnbUW
– vitalik.eth (@VitalikButerin) March 2, 2020
"It is clear that Steem DPOS has taken over the major exchanges voting with the sender's money. Who can confirm and / or provide details?
Seems to be the first typical example of the “actual bribe attack” for coin voting (of bribes given to facilitate hodlers and taking their votes). “
Not surprisingly, Steem supporters were furious. One person posted a video explaining the damage this move did to the platform:
Your stake in Steem on centralized exchanges was just used to take over the Steem Blockchain https://t.co/AFn0LvEkUC
– Luke Stokes (@lukestokes) March 2, 2020
“Your stake on Steem on centralized exchanges is only used to take over Steem Blockchain.”
It may be contradictory if Sun is behind the current attack on the Steem network because as such he is fighting his own personal interests. This current network error represents a powerful blow to the reputation of Steem, once a trusted blockchain platform. In fact, it 'brings down' the DPoS concept as a reliable architecture for decentralized consensus.
Bob Loukas, a well-known market analyst and commentator has the same opinion and noted that individuals holding tokens on centralized exchanges are trying to sacrifice their right to vote on that blockchain.
The depositor may have a “balance” at the exchange, but do not have rights on that blockchain.
They exchanged that right for a paper guarantee, all for the purpose of speculation. If they had cared about the stake, they would have demanded that within their paper exchange.
– Bob Loukas (@BobLoukas) March 2, 2020
"Depositors may have a balance at the exchange, but there is no right to that blockchain. They exchanged the right to be guaranteed on the paperwork, all for speculative purposes. If they are interested in stake, they will ask for a exchange. "
Investors participating in the development of passive blockchain may not be too upset when the exchange takes their votes, but that proves that the exchange still focuses on a single point in markets where DPOS blockchains need to be against.
Outstanding threats of centralized exchanges
Because the DPoS architecture places a heavy emphasis on voting for token holders, centralized exchanges often have a huge impact on these platforms. Blockchain experts have warned that this arrangement opens up opportunities for collusion and centralization, perhaps the current case in Steem.
The solution to this problem is to keep the DPoS coin in a personal wallet instead of an exchange. Unfortunately, many investors do not do so. Perhaps Steem's current situation will encourage people to pay more attention to this simple and important advice.
The Steemit story continues to grow after the recent TRON acquisition
The blockchain company TRON, led by Justin Sun, recently acquired the blockchain platform Steemit – a popular content sharing platform that uses cryptocurrencies to reward users for sharing content.
The acquisition aims to bring DApps built on the Steem blockchain focused on TRON management. Accordingly, Justin Sun notification various initiatives to connect TRX to the Steem ecosystem in a recent open letter to the blockchain community.
"We have a lot of work to do to turn Steemit.com into the power it really can be. There are many ways to achieve that, from connecting TRX, TRC10 and TRC20 to the Community to market and develop Steemit.com ".
Now it seems the latest development in the Steem series of events is that some major exchanges have essentially taken control of Steem's DPOS using the sender's token.
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