The present controversies swirling around EOS and its recent freezing of a number of accounts — and the opaque way in which those decisions were made — present a golden learning opportunity for the crypto community. As the toolkit for smart contract dispute resolution, Sagewise is uniquely positioned to contribute to solutions. To that end, today we are releasing a tool to help verify frozen accounts and seek feedback from the EOS community.
First, we want to provide some background on the current situation and where Sagewise fits in. Shortly after the launch of the EOS blockchain in June, ECAF (its arbitration arm) began requesting freezes on certain accounts because of suspicious activity and evidence of theft. In taking this action, the body did not clearly communicate the procedures it had followed in making its decision. In one instance, it issued a freeze order and stated that it would later release the logic and reasoning behind the freeze order.
It is this apparent lack of transparency, rather than the actual freezing of the accounts, that has generated most of the backlash. In the eyes of many in the community, it runs counter to the ethos of decentralization that underpins blockchain.
There are also 19,587 wallets — representing 3.3 million EOS tokens — who lost these assets when the token migrated from Ethereum to the EOS blockchain. These are almost entirely people who bought the coin on secondary markets in the U.S., China, and other jurisdictions where EOS did not directly offer it. Because they purchased through secondary markets such as Binance, these holders did not receive instructions for participating in the token swap, and now that the swap has occurred, the smart contract is frozen and the tokens are effectively lost.
Sagewise offers a tool to the EOS community that solves this lost-during-the-swap problem as well as a solution for those who used a compromised tool to generate their EOS private and public keys. The tool provides transparency regarding any actions taken from within frozen accounts. Essentially, it allows someone to show evidence that they own an Ethereum address and to provide an EOS address to which they would like those tokens delivered. It also gathers and reports all data regarding both EOS and ETH contract balances and relevant actions. Ownership of an Ethereum address can be independently verified by the holder’s signing keys. This verification can be confirmed by any independent third party, adding to its reliability. Additionally, Sagewise will provide users with an easy to use guide to aid in registering a new EOS address association when needed.
While Sagewise is providing this tool, and it will be up to the community — which now fully controls the EOS blockchain — to determine how to use it. The community may decide that those who lost tokens did so as a result of dishonesty or negligence, and decide not to attempt to restore their lost assets. Or it may decide to give them a chance to be made whole in accordance with a set of guidelines. Whatever the outcome Sagewise is committed to providing solutions to help the community.