Equilibrium, an EOS-based DeFi project, has added four block producers to its governance system, to make use of the blockchain’s smart contract upgrade features.
The members include:
Eosfinex
EOS Nation
EOS Cannon
It has been reported that the group of four will act as “governance supervisors” for the system, as their primary purpose is to sign off on smart contract upgrades for Equilibrium.
Alex Melikhov, the CEO of Equilibrium, said:
“One of the main advantages of EOS lies in updatable smart contract code. In other words you can migrate to new versions of your application seamlessly without hard stop of the whole system.”
However, this approach is different from Ethereum, where new iterations of DeFi protocols generally require a complex migration procedure. The old versions may eventually be shut down to avoid security risks, as was the case with Maker’s single collateral Dai, or they may be left to their own devices, like with Uniswap V1.
Binance, Eosfinex and others join the governance of an EOS DeFi project, which will allow it to seamlessly upgrade smart contracts https://t.co/Fl62Dl7m2a — Cointelegraph (@Cointelegraph) May 22, 2020
It has been analyzed that supervisors hold portions of a multi-signature key, which is used to authorize upgrades to the ecosystem.
Melikhov said:
“They are chosen among the most known and reliable ecosystem participants who could bid their reputation on the integrity and relevance of the smart contract updates.”
He noted that the decision to include new entities rests with all existing council members, and not just Equilibrium.
Likewise, this approach is an interesting middle ground in the world of DeFi. In many Ethereum-based projects, the founders of the protocol hold admin keys that give them special rights over the contract, a practice that the community frowns upon, as this is usually done with the promise of destroying those keys once the protocol is mature enough.
Melikhov said that Equilibrium’s governance is instead “already decentralized, though he conceded that it is not a fully trustless process that is secured by economic incentives or algorithms.
He explained that the project went for an alternative approach of “creating a proof-of-authority framework which consists of trusted counterparts that are independent according to their background.”
As per the report, there are no plans to destroy these upgrade keys, as that would imply missing out on EOS’ added possibilities. This approach fits within the wider context of EOS governance, which is based on agreements between specific stakeholders.
In addition, a Binance representative said that the exchange considers EOS a “promising blockchain for DeFi development,” especially for its cross-chain capabilities.
Given that EOSDT recently integrated Bitcoin (BTC) as a form of collateral, the company sees a place for the exchange’s token as well:
“We hope to see our BNB token as an asset integrated into more DeFi apps, and we think it can be introduced as a new type of collateral for the EOSDT stablecoin at some point.“
The spokesperson explained that Binance’s addition as a supervisor does not require the ownership of NUT, Equilibrium’s governance token.
Thus, the exchange seems to be incentivized to see the project succeed.
Source: Cointelegraph | Image: The Equinix Blog