Justin Sun May Lose Battle for Steemit as Exchanges Flee the Battlefield
On March 2, Justin Sun and three major centralized exchanges Binance, Huobi, and Poloniex thwarted the soft coup, attempted by Steemit’s witness super-majority. Please check our extensive investigation on that whole kerfuffle.
Today, after a social media backlash, this story took another sharp twist.
Justin Sun Defeats Hackers
As the fallout related to Justin Sun’s successful gambit overtook Steemit, his account on the social media platform stayed silent. Instead, he turned to Twitter, where he reassured his followers that he has defeated the hackers and the platform’s community now stands strong and united.
— Justin Sun (@justinsuntron) March 3, 2020
This specific choice of words sparked another wave of backlash for blockchain mogul, as many community members noted that the people he would call “hackers” were actually witnesses elected by Steemit’s community. Neither did the soft fork need Steemit’s code to be hacked.
Absolutely false on all counts. The witnesses did not hack the network, they were elected by the community, and implemented a temporary soft fork (not consensus enforced) to prevent Steemit inc stake from being used exactly the way you have done to overthrow the chain.
— Harrison Mclean (@HazMclean) March 3, 2020
Exchanges Are Back-Paddling
In a reply to Vitalik Buterin’s tweet, Binance CEO Changpeng Zhao admitted that he was not very well-informed on what was going on and likely relied on mister Sun’s interpretation of the situation.
I was made aware of this upgrade/hardfork beforehand, and approved it. Projects do this all the time, and we are usually just in a supportive position.
— CZ Binance 🔶🔶🔶 (@cz_binance) March 2, 2020
After apparently realizing what was going on and enduring the industry’s backlash, Mister Zhao announced that Binance will revert to neutrality in this matter.
Done, unvoted. 1 oversight on my part. Miscommunication/upgrade rubber stamp. 2 @binance have no interest in chain governance. We stay neutral. 3 will continue to support regular upgrades/hard forks.#onwards https://t.co/RQFlul9FTz
— CZ Binance 🔶🔶🔶 (@cz_binance) March 3, 2020
Huobi has followed suit, claiming ignorance and likewise removing their votes:
“We were informed that the Steem network was at immediate risk of an attack, an issue that directly impacts our users’ assets. We take all allegations seriously, so we worked with both teams to better understand the situation and carefully assess the risk at hand. Based on the information provided to us and out of an abundance of caution, we decided that helping Steemit and Tron was in the best interest of our users — and the network at large.
“However, this action is not final. It has always been our intention to return voting rights back to the community so they can make the final decision on what the network needs. Thus we have removed the vote and will always stand behind the decisions of our users.”
One hour after Binance CEO announced he would withdraw the votes, Justin Sun announced that it was never his intention to take over the network and that “all parties’ votes will be withdrawn”. Having said this, he made a point of doubling down on portraying Steemit witnesses as “malicious hackers.”
Misleading comments re us collaborating w/ exchanges on a hostile takeover is false. Our intention was never to take over the network & all parties' votes will be withdrawn. We wanted to protect the sanctity of private property & the interests of all from malicious hackers.
— Justin Sun (@justinsuntron) March 3, 2020
Steemit Suffered Slew of Resignations
The departing trio has been shown overwhelming support from the community. One user wrote, commenting HoC’s resignation:
“You and @vandeberg were the faces that made me believe in Steemit Inc. as not some evil corporation, but as a company that had people who actually cared about what was being built here. Steemit Inc. will not be the same without you and probably won’t get much support from the community going forward. You two are going to get lots of love from everyone though.”
It’s Not Over Yet
As centralized exchanges withdraw their support of Justin Sun’s counter-attack under the crypto community’s pressure, Steemit witness slots are now being contested again.
The community leaders are mobilizing voters in an attempt to regain control over the network, while some warn of more “rogue” Steem tokens being funneled into the system by unknown actors to seize control.
What Important Lessons Have We Learned Today?
- A pre-mined stake will always be a deal-breaking problem in DPoS. Unless there are programmatic restrictions on how that stake can be used.
- Centralized exchanges are a hard counter to DPoS systems.
forklog.media will keep following the developments on Steemit. Stay tuned.
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