Cartels and Whales in DPoS Voting

One of the greatest concerns about DPoS is the probability of “Cartels” and “Whales” taking over the ecosystem.  Many a blockchain has fallen prey to this, and their communities have collapsed as a result. Both “Whale” and “Cartel” are terms often used in negative connotation when dealing with true decentralization.

A “Whale”, for the sake of this article, is any one individual who can significantly change the rankings of the trusted nodes and influence the entire DPoS rankings single-handedly.  A “Cartel” is a group of individuals who could do the same, but with their combined power.

Both are forms of centralization, and both are impossible to avoid or ignore.  There will always be wealthy people, and alliances will always form just as friendships naturally build between various individuals and groups.

It’s important to recognize that these aren’t wrong; villainizing friendship and networking is not the answer…but these people and organizations need to handle their systems and power carefully, especially when dealing with a blockchain built on trust.

The Supernodes that verify the very ecosystem our hopes and dreams are built on must be trustworthy, and the well-known fact is that trustworthiness and power don’t go hand in hand.

If “Whales” or “Cartels” can dramatically change who represents our blockchain’s consensus, the community should be concerned.  The purpose of this article is not to judge, but to bring awareness to this reality.

April 19th, 2019, DPoS Voting went live.

Supernodes have been battling for reputation and community support through airdrops, campaigns, and ecosystem contributions.  Even our own CR Press team has put our hat into the runnings (Rank 65 at the time of this writing). Rankings have fluctuate greatly, leaders have risen and fallen and patterns have emerged.

Some of these patterns are disturbing.

When unknown nodes without website, reputation, campaign, or known contributions rockets up from nowhere, and suddenly becomes a top ten node, it gets attention.  When one wallet’s vote contributes a massive 150k ELA, it gets attention.

Why is this happening and who is behind these actions?  And at what point is the spirit of decentralization lost?

There’s a pattern visible which displays a standard voting pattern of 5000 ELA of the top 24 active nodes–the most important nodes of CR:

List 1 (Node Name- Number of 5000 Vote Batches)

1. *Elephant Wallet- 24x 5000
2. *WeFilmChain- 35x 5000
3. *ElastosHIVE- 27x 5000
4. *ELA.Sydney- 34x 5000
5. *ManhattanProjectFund- 15x 5000
6. Elastos Scandinavia- 0x 5000
7. Wild Strawberry Atlas- 0x 5000
8. Wild Strawberry Calypso- 0x 5000
9. *SunnyFengHan- 16x 5000
10. *RUOLAN- 29x 5000
11. *TYROLEE- 29x 5000
12. Enter Elastos – Callisto- 0x 5000
13. ElastosDMA- 1x 5000
14. Enter Elastos – Titan- 0x 5000
15. *DHG- 27x 5000
16. Enter Elastos – Ganymede- 0x 5000
17. *HashWorld- 24x 5000
18. Noderators – Watermelon- 0x 5000
19. Noderators – Champagne- 0x 5000
20. *Elafans- 24x 5000
21. *KANG- 30x 5000
22. The Houston Supernode-0x 5000
23. Wild Strawberry Apollo- 0x 5000
24. *greengang-26x 5000

As you can see from this list, there’s a combined voting power of up to 170,000 ELA in 5000 ELA batches on several nodes.  These 5000 ELA batches are generally all in support, or not at all for any particular node, which means that it’s a single organization or individual voting in focused effort for 12-13 of these top 24 nodes.  This represents half of our trusted consensus Supernodes.

We’ll analyze this further, but first, what about the 150k ELA “Whale” wallet previously mentioned?  This wallet voted for:

List 2

1. *Elephant Wallet
2. WeFilmChain
3. *Elastos HIVE
4. *ELA.Sydney
5. *ManhattanProjectFund
6. *Elastos Scandinavia
7. *Wild Strawberries Atlas
8. *Wild Strawberries Calypso
9.  SunnyFengHan
10. RUOLAN
11. TYROLEE
12. *Enter Elastos – Callisto
13. *ElastosDMA
14. *Enter Elastos – Titan
15. DHG
16. *Enter Elastos – Ganymede
17. HashWorld
18. *Noderators – Watermelon
19. *Noderators – Champagne
20. Elafans
21. KANG
22. *The Houston Supernode
23. *Wild Strawberry Apollo
24. greengang

These Supernodes represent 15 of the top 24 nodes, more than half of the top active nodes.  

List 3 are nodes that received votes from both List 1 and List 2:

List 3

1. Elephant Wallet
2. Elastos HIVE
3. ELA.Sydney
4. ManhattanProjectFund

What has made the “Whale” vote for some nodes, and the “Cartel” vote for others?  What is the reasoning behind their logic? And at what point is the spirit of decentralization betrayed?

Essentially, the most critical questions become:

Are our active and trusted Supernodes based on influence and power, a list of predetermined votes, or are the Supernodes based on what’s best for the ecosystem?

Could a Supernode simply buy or associate their way into power, and if so, does that mean CR is truly a reflection of a democratic community?

In List 1, all the voted nodes are obviously associated by their organization and they are voting between each other because the variance on group voting is so low.  The only variations within List 1 seems to be ElastosDMA with a single vote from a member in that organization, and also the ManhattanProjectFund and SunnyFengHan Supernodes having received about half the usual votes of the 5000 batches.

In the “Whale’s” case, there seems to be no obvious association between the nodes as some of the nodes come from Alliances, some are vocal Independents, some are pools, and some are also on List 1.

It is easy to speculate motivation, and perhaps that’s best left outside this article.  Be assured that this is not meant to criminalize or demonize any party, but one thing is sure: there are big players and they are moving hard.  If the community is seeking to have a voice, it begins now, and they must make sure to vote en-mass to be effective enough to distribute trust across the various types of Supernodes.

Power is not the issue.  Passivity is.