Arbitration on a Governed Blockchain: EOS' Crisis of Dispute Resolution

Another week, another squabble involving the beleaguered EOS blockchain.

The latest controversy unfolded as the EOS Core Arbitration Forum, effectively the 'judicial branch' of the EOS ecosystem, failed to handle a series of alleged security breaches, prompting Block Producers to take unilateral action and freeze the endangered accounts.

Despite the EOS token currently standing as the fifth cryptocurrency by market cap, and its $4 billion ICO remaining unmatched to date, the developers and core community behind the project seem to be fine with large-scale experimentation with a live blockchain.

On June 17, shortly after the EOSIO mainnet launch, a Block Producer EOS42 drew the community's attention to the fact that the accounts compromised during the registration process could now be unlocked, putting some $15 million worth of EOS tokens on the spot.

As the arbitrators appeared hesitant to throw their weight behind the emergency measures already in place, a block producer EOS New York demanded that the document be issued before 13:00 UTC on June 19, failing which they threatened to 'unfreeze' the suspicious accounts.

From all the above, one thing is clear: the EOS Core Arbitration Forum in its current format is a poor fit for the role it is supposed to play in the community.

Since a working mechanism of dispute resolution is one of the key elements of a governed blockchain which EOS aspires to be, its current impotence poses a major challenge to the whole governance structure.

Article IX of the EOS Constitution states that 'All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Dispute Resolution of the EOS Core Arbitration Forum.

Another major criticism of the EOS' current approach to dispute resolution is that it is based on off-chain interactions and therefore leaves too much room for human interpretation and error.

One's Proposal for EOS Constitution v2.0.' The same day, the EOS' founding entity announced its participation in voting process, pledging to act in compliance with Ricardian Contracts.