Voting numbers are low, representatives spend tons on advertisements and there’s widespread vote buying. No, this is not an analysis of a corrupt election—this is the state of the Tron network, a blockchain designed for sharing entertainment content.
Six months after its launch, the network is already starting to show cracks in its design. Miners are not being rewarded on performance, and that has the potential to make the network less efficient, critics say.
Tron was created by Justin Sun, and launched in June, 2018, with the aim of creating a seamless way for anybody to share digital content. The network is run by 27 block producers, consortiums that validate the transactions of a blockchain. On Tron’s network, they’re known as “super representatives,” and are continuously (as in, moment to moment) voted in and out of office by holders of Tron’s coin, TRX.
That governance model is similar to the EOS network’s— except for one key distinction: Per EOS's constitution, block producers can’t pay for votes. For Tron, rewards are not just fair game—they’ve become the most common way to attract votes. In fact, there are even websites set up to help voters determine which super reps are the most profitable to vote for. That means voters support those who give the highest rewards, rather than the most efficient validators.
Super representatives are paid in block rewards. These are amounts of TRX proportional to the work they’ve done on the network, and are supposed to pay for the computational costs of processing transactions. The original notion was that these block rewards and provide incentives to be accurate.
However, most block rewards are actually being used to encourage voters to elect them. Indeed, some super representatives are going so far as to offer all of the block rewards to their constituents, keeping nothing for themselves. BitGuild is even paying voters out of its own pockets, offering them 15% extra.
This means they are operating at a loss to keep control over the Tron network. It’s unclear why they would do this. But observers fear that bad actors could manipulate the network. Forget 51% attacks, we’re talking about 100% control here.
Regardless, the system has made it hard for community-spirited super representatives, who find they can no longer afford to operate. When a vote in June first established the “founding 27” as Tron’s governance model, it included a number of reps who were focused on supporting the network, and helping it to grow. Over time, however, to stay elected, they had to pay more and more money to buy votes. That pattern continued to the point where they began operating at a loss.
“Vote buying completely undermines the principle of voting,” said Samuel Austin, blockchain developer at TeamTronics–which was originally the #2 super representative–adding, “We got to a point, which still exists now, where many of the community-driven super representatives are distributing 100% of rewards. We were paying for all of our network costs, and technically, as a team, running at a loss.” In response, TeamTronics dropped its rewards to zero. Unable to buy votes, it was instantly booted.
Austin’s team then tried a different approach: It introduced a community-support plan where it would reward anyone who would write an article on Tron, or advertise it through social media. In theory, this would help spread awareness of the network, while providing reasonable rewards to community members. However, that didn’t sway voters, either and TeamTronics garnered less than 1% of the vote.
Other super representatives are facing similar problems. CryptoGirls, which was once ranked fifth when the first election was held, is considering closing down after dropping out of the rankings. Irina Iftimie, founder of CryptoGirls, told its community on Telegram, “[We are] thinking of giving up on our super representative for now.” She cited the cost of running the servers as one of the main issues. This would be a major blow for the Tron community as it helped create it in the first place.
It’s not game over for the community-driven super representatives though. Super rep Sesameseed has somehow managed to find a balance between paying enough rewards to stay on the map, and using its own token to pay voters to stay onboard. It does this via its own token, SEED, which is pegged to TRX and which it pays to voters. Think of SEED as a kind of loyalty program which offers other payouts to holders. Somehow, this mechanism allows Sesameseed to only pay 80% of its block rewards to its constituents, who thus far seem to be happy.
While the EOS constitution has been mocked for being a bunch of commands in an Excel document that nobody need follow, it has–on the surface–worked. Though there have been allegations of vote buying, it has not collapsed into a race to the bottom, like the Tron network. Though Justin Sun has been begging developers to leave other platforms and join his, unless Tron’s constitution is fixed, the exodus might be in the other direction.