According to Yves La Rose, the creator and CEO of the EOS Network Foundation (ENF), one of the numerous reasons why the community felt obliged to take control was the blockchain software company Block.one's failure to financially support the EOS ecosystem after the 2018 initial coin offering (ICO).
Everything is constructed from scratch.
La Rose disclosed that the EOS community had to construct everything from start because it didn't "own any of the existing intellectual property" in written responses sent to Bitcoin.com News. In addition, La Rose stated that money needed to be supplied "as quickly and effectively as possible" because the ecosystem had been lacking in money for a long time. However, this had to be done before the frameworks and processes that guide decision-making were established.
When questioned about Block.one's settlement offer and the reasons behind her recommendation that the community reject it, La Rose stated that the amount was "a tiny fraction of the $4.1 billion that Block.one raised from the community in its ICO sale." The blockchain software company had promised to invest $1 billion in the EOS Network and community, but she said that the proposed settlement was far short of that amount.
As previously reported by Bitcoin.com News, interest in EOS declined in the years after the ICO, as shown by the decline in the value of the crypto asset, which went from an all-time high of $22.89 in April 2018 to $0.57 on September 21, 2023. La Rose claimed that the crypto asset is on a course to recovery despite this in her responses delivered over Telegram. She cited the most recent choice made by the Japanese Virtual and Crypto Asset Exchange Association to approve the whitelist for crypto assets.
Here are all of Yves La Rose's responses to queries that were submitted.
BCN, or Bitcoin.com News With a $4.1 billion Initial Coin Offering (ICO), EOS conducted the largest and most publicized ICO ever back in 2018. The largest blockchain network in the world could have been scaled and built with its available resources. What happened wrong, in your opinion, and why did the community feel the need to take control?
The $4.1 billion fundraising did not yield many benefits for the EOS community because the money went to Block.one, a private company that handled the token sale, rather than the EOS ecosystem as a whole, according to Yves La Rose (YR). Only a small portion of that money was ultimately used to support the EOS community.
Block.one put the majority of the funds into Bitcoin, shareholder buybacks, and private for-profit enterprises unrelated to EOS rather than reinvesting in the EOS ecosystem and community as promised during the ICO.
The software development was highly robust and far ahead of its time in the early years of EOS. Although the lack of ecosystem investment may have disappointed the community, the technical contributions to the protocol were nonetheless significant for a while.
The amount of code generation and the caliber of the code that was being produced for the open-source EOSIO software stack that powered EOS had significantly decreased in the year or two prior to the establishment of the ENF [EOS Network Foundation]. What we observed was that many of the Block.one developers who remained were transferred to Bullish, their centralized exchange. There were consequently a very small number of individuals working on the development of the EOSIO core code, and those who were senior and still capable of producing very high-quality code were repurposed for Bullish. As a result of their dissatisfaction with the new direction and lack of emphasis on open-source blockchain development, many engineers started leaving the firm at the same time.
The incentives between EOS and Block.one were no longer in line at some time, which was obvious. This was made worse when Block.one attempted to sell their unvested token share. As a result, the EOS node operators came to an agreement to halt the vesting of their tokens and, in essence, dismissed Block.one for not upholding their obligations.
Soon after, the EOS community cloned the software, hired the best engineers with extensive knowledge of the EOSIO protocol, and relaunched it as what is now known as Antelope. On what we called "EOS Independence Day," the EOS Network formally hard-forked to our community-run Antelope codebase nearly exactly one year ago.
BCN: To resurrect and protect the ecosystem, the EOS community has banded together under the auspices of the EOS Network Foundation (ENF). Can you describe the major challenges facing the community-led rebirth of a blockchain network that the original developer of the network reportedly abandoned?
YR: The project had already been in existence for four years before the EOS Network Foundation was created two years ago. The website, Github, social media profiles, documentation, even the name of the technology itself, were all not owned by the EOS community. All of this had to be rebuilt from start, and it was necessary to contact various listing sites, data aggregators, and exchanges to inform them of the leadership transition and new digital properties. It took a while to get over this phase, which was extremely challenging. We had to virtually start from scratch when creating our identification.
The ecosystem had been severely lacking in capital for such a long time that we had to discover ways to deploy it as efficiently and rapidly as possible without necessarily having the time to create structures and processes to guide decision-making. We were able to get through this era because we had a pretty clear understanding of who and what to support because many of the top ecosystem contributors had, in essence, been on a 4-year job interview at that point. To assist create the vision and priorities for the network, we established numerous working groups, or think tanks, with the best and brightest in the ecosystem. Since then, we have been hard working to implement the outcomes of that effort as well as much more.
BCN: Block.one and the community have been engaged in a legal dispute for some time, and recently you urged the community to turn down its $22 million settlement offer. What motivated you to act in this way, and what would happen if you accepted a similar settlement in the future?
YR: The $22 million settlement sum is a pittance compared to the $4.1 billion that Block.one received from the public through its initial coin offering and the $1 billion that Block.one had pledged to invest in the EOS Network and community but never did. The ENF will keep talking to stakeholders on behalf of the EOS community to make sure Block.one follows through on its pledge to invest $1 billion in the EOS Network and community.
Strong formal public commitments made by Block.one and its representatives encouraged stakeholders to make investment and development decisions throughout and well after the ICO, which lasted a full year. It has been clear that there was no intention of keeping the promises, and this has resulted in huge financial losses.
The benefit to Block.one is much greater as community members who joined the settlement will be prohibited by the terms of the settlement from making any further claims against Block.one and its founders, even though they may be able to recover a small portion of the losses they endured: Block.one should not have to pay $22 million to avoid being held accountable for their wrongdoing in the future.
BCN: Your history implies that you have a lengthy history of dedication to the EOS network. Can you describe how you got to the EOS Network Foundation (ENF) from EOS Nation?
YR: Prior to the mainnet debut in 2018, I served as the CEO and co-founder of the EOS Network block producer, where my involvement in the EOS ecosystem first began. We began as a standby block manufacturer that was comparatively unknown, but as time went on, we established our credibility by taking the helm of numerous ecosystem efforts. Additionally, we were in charge of organizing many EOS system upgrades. Over time, we rose to become the top producer of blocks.
With time, it became increasingly obvious that EOS required a focused organization that, at its heart, had achieved the aim of enabling developers, companies, and individuals to build on EOS. Other ecosystems typically have a top-down appointed hierarchy in charge of allocating funds and coordinating resources, but EOS did not have one because Block.one refused to assume this responsibility despite their $4.1 billion token sale.
It was clear that this gap needed to be filled, so in 2021 I resigned as CEO of EOS Nation and started working proactively to build support from the community for and raise money for a dedicated non-profit foundation to serve as stewards for EOS. The EOS Network Foundation was established after several months of planning and coordinating the block producers.
BCN: The Japanese Virtual and Crypto Asset Exchange Association recently granted EOS whitelist approval, enabling the native token to trade against the yen on authorized exchanges in the nation. How significant is the Japanese market—and the larger Asian market—for EOS?
YR: Only 78 out of the thousands of cryptocurrencies have been able to attain the regulatory permission that EOS received in Japan, which is a significant accomplishment.
The holy grail of the cryptocurrency sector is well defined regulatory frameworks, and Japan is one of the few nations with one in place. I think there is still a huge chance for more nations that provide control and clarity to capture market share. With their recent initiatives, Hong Kong is another region that distinguishes out in this regard.
Japan is significant for EOS because it is a significant market that is expanding for web3, has a set regulatory environment, and has a government that is supportive. In a recent keynote address at the WebX Tokyo conference, their prime minister declared that "Web3 is the new form of capitalism." Due to its well-established gaming sector and game intellectual property that is ready for tokenization, Japan is also important to the web3 space.
Asia has been a key geographical region for EOS since its inception, and it is also where the great majority of token holders and token weight are concentrated. I firmly believe that blockchain-based gaming will represent the next wave of innovation in web3, and Asia is unquestionably a leader in that industry.
At a time when regulations are becoming stricter in other areas of the world, Asian markets are also providing more hospitable regulations to control crypto-related activity. In addition to the favorable regulatory environment provided, there is just a far greater population that is unmatched by other regions of the world, meaning that there are many more people who can engage when additional retail markets open up in locations like Hong Kong.
BCN: According to you, what are the major issues facing the cryptocurrency sector at the moment and how may they be resolved?
YR: In general, blockchains and blockchain-based applications are still cumbersome and challenging for new users to utilize. To achieve any kind of widespread adoption, they must be made simpler.
Most non-crypto users merely want to use items that improve or enhance their lives, not things like blockchains or NFTs. By utilizing the technology to create products that people want while hiding the blockchain from end users, mass adoption will occur.
BCN: With so many layer-one companies contending for market share, what route will the EOS blockchain take in the future?
YR: EOS is focused on providing a user experience that is comparable to what Web2 users have come to anticipate and are accustomed to. This entails removing the most, if not all, of the challenging aspects of Web3, such as resource management. High-frequency low-value transactions will become the standard as more stakeholders begin utilizing blockchain technology and we, as an industry, move towards mainstream adoption of numerous use cases and applications, and the EOS model will be there to meet the enormous demand.
Users should not be concerned with handling their own resources or paying for gas. EOS's scalability enables developers to manage user resources on behalf of users at low, predictable costs, resulting in a much improved UX.
A blockchain-based app alone won't lead to mass adoption of blockchain technology. It will come from apps that leverage a blockchain to improve them while hiding the cumbersome blockchain user experience from the user.
BCN: In an effort to resurrect the platform, EOS just released EOS EVM (Ethereum Virtual Machine). Can you discuss the function of EVM compatibility in creating a multi-chain future and the importance of resource combining for various crypto market players?
YR: The EVM basically gives EOS the capacity to welcome a large number of developers that didn't previously have access to the EOS ecosystem. The EOS EVM opens that door for them.
Without a doubt, the web3 standard has been displaced by the Ethereum Virtual Machine. While this does not preclude the existence of non-standard technologies, in order to compete, they must be able to work with Ethereum. Smart contracts on EOS native may read and invoke smart contracts to generate atomic transactions on EOS EVM and vice versa in our most recent release of the EOS EVM. Interoperability between virtual machines is a fascinating idea.
The largest developer community in web3 and developer tools like Hardhat and Openzeppelin can be accessed through EOS EVM. These programmers are already familiar with EVM and have created a wide range of EVM-compatible apps. Developers working on EOS now have access to all of the Ethereum tooling, protocol updates, and open-source code. The EOS EVM version of the Silkworm C++ Ethereum implementation, which is available to the rest of the Ethereum community since it is open source, is one example of the unique code that our own engineers are creating at the same time. Everybody gains.
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