If you’re a new user in the EOS or Antelope community, you may sometimes run across messages about voting for block producers. But what’s a block producer? Why should you vote for them? How do you vote for them? It can be a lot, which is why we put together this guide to help you through the process.
Greymass was one of the first creators of voting technology on EOS (with eos-voter, now Anchor) and we’re firmly committed to helping everyone in the EOS community exercise their right to vote. This is because one of the greatest things about decentralized currencies, and EOS in particular, is that you’re not just someone with money in your wallet. You’re someone with a vote and a voice, and you can influence how the community evolves. So let’s make sure you have all the info you need to make your vote count!
Let’s start at the beginning: why do we vote at all?
All blockchains need a way to create blocks — you may be familiar with Bitcoin’s way of creating blocks, which is called Proof of Work. With a Proof of Work model, each block requires that someone (or more accurately, some computer server) to correctly answer a complex mathematical equation, and whichever server solves the equation first becomes the producer of that block. While this is a simple concept to grasp, it has two major drawbacks:
- Each equation is so complex that it requires a large amount of processing power to answer, so the servers that produce blocks use a lot of energy. This isn’t environmentally friendly (and it’s expensive!).
- Chains that use Proof of Work are often slow, and bad at handling large numbers of transactions. This is because there’s a limit on how many transactions can be placed into each block, and a limit on how quickly blocks can be produced.
In order to avoid some of the pitfalls of Proof of Work, the EOS blockchain creates blocks with Delegated Proof of Stake, or DPoS. In a Delegated Proof of Stake system, anyone who holds tokens can vote for who should produce blocks. That way, instead of block producers competing against each other to solve equations, they’re voted for in a (hypothetically) democratic system.
The upsides of DPoS are that:
- It uses a lot less energy, because the servers can simply generate the blocks without the computational power required by Proof of Work.
- Thousands more transactions can be handled at a time, so DPoS blockchains are particularly useful for large communities of users and for use cases like decentralized gaming and decentralized finance.
What does your vote count towards?
On the EOS blockchain, there are hundreds of potential block producers, but only the top 21 actually produce blocks for the network. These top 21 block producers (and a handful of backup block producers) receive rewards for their work. These rewards are generated through inflation, which is currently set at 3% on the EOS Network — with 1% going to pay block producers, and the other 2% going towards further development of the network. Who the top producers are, and how much EOS they receive as a reward, is publicly viewable information.
It’s up to each block producer to decide how they use their rewards, but at Greymass, we use our rewards to help fund projects that benefit the greater Antelope community, such as our authenticator Anchor and our web wallet Unicove.
Because of the responsibilities that block producers have to the network and because of the rewards that they receive, you may want to consider the following when deciding who to vote for:
- If you trust them to secure the EOS network (because if blocks don’t get produced, then EOS, and every single other chain and app based on it, will stop working).
- If they’re providing good to the community. Depending on the market value of EOS, the salary that block producers are paid can be substantial, so a sign of a good block producer is if they return some of that value to the community in some form.
Who can vote on EOS (voting vs. staking)
Anyone who owns EOS tokens can vote for block producers, because you vote with the tokens that you have by “staking” them to the network. The idea of staking is that you’re showing you have skin in the game, so to speak. You’re able to vote for block producers because you own tokens, and therefore you have some proven interest in the community.
To cast your vote, you’ll need to stake some number of tokens — how many you use is up to you. Just keep in mind that the number of tokens you stake affects the power of your vote. So the more tokens = the more your vote is worth. But regardless of the number of tokens you stake, you’ll be able to vote for up to 30 block producers.
So why vote on EOS? (What’s in it for you?)
Because voting allocates rewards, it’s a great way to help support teams whose work you appreciate, or to express your faith in certain block producers.
And keep in mind that a blockchain which has an active community of users, developers, apps, etc. is more likely to gain new users and drive up demand for its token, so voting for block producers who you trust to provide value is one of the best ways you can increase the likelihood that you’ll make money from your EOS investment in the future.
Staking also has direct benefits for you, depending on how you do it:
- Safety from fraudulent transactions. If you choose to stake your tokens directly to the network, you’ll have a mandatory 72-hour waiting period if you choose to unstake your tokens later. Staking in this way is similar to putting your money in a bank: it’s still your money, and you can still choose to spend it, but you’ll need to fetch it from the bank first (and that will take 72 hours. So just pretend the bank is really, really far from your house). If you’re concerned about the safety of your account, then this waiting period is a feature, because it gives you a three-day window to catch fraudulent transactions. For instance, if someone gets into your account and all your tokens are staked, you would have three days to change the password and lock them out before they could do any real damage.
- Earning more tokens. On the EOS and Telos networks, you have the option to use the REX system to stake your tokens. While we won’t go too far into the details of how REX works here, you can use it to vote and earn interest on your staked tokens at the same time — essentially being rewarded for your participation in the network. The REX contract has a mandatory four-day waiting period, but once that’s passed, you can remove your tokens and use them at any time.
Choosing who you vote for
You can either choose the block producers you want to vote for yourself, or you can use a proxy. A proxy is like a voting guide, where someone recommends which block producers you should vote for — it’s essentially a shortcut to filling out your ballot, if you don’t want to research all the block producers on your own.
To get a little more technical, voting with a proxy is non-custodial — which means that you’re not giving up any control over your tokens when you use a proxy account. Instead, you’re simply allowing it to direct your vote, and you can reverse your decision at any time.
If you choose to use a proxy, just make sure that you understand the motives of the proxy’s creator. Consider whether their goals align with yours, to make sure that your votes will have the impact you want.
For instance, Greymass provides a proxy (greymassvote) that you can choose to use within Anchor, or with any EOS wallet. The Greymass proxy was created by our team to vote for block producers who we believe add the most value to the network, often in under-appreciated areas. For example, our proxy includes:
- CryptoLions for their efforts on testnets, tooling, and other fundamental chain development.
- EOS Authority for their work on explorers, infrastructure, and tooling.
- EOS Rio for their continuous work on Hyperion and other API related technologies.
- EOS Amsterdam for their constant helping hand within the developer community, fundamental tooling, and business efforts to promote the technology.
- Sw/eden for their dedication to providing infrastructure and awareness to the ecosystem.
How to cast your vote
So long as you own some EOS, you can vote with any wallet. Instructions abound online, from TokenPocket to Wombat and bloks.io. But generally, the rules are the same: make sure you have some EOS staked, then select up to 30 block producers or a voting proxy, and you’re all set.
And if you use the Anchor wallet, then we’ve got you covered with two step-by-step guides that walk you through how to stake your tokens and vote with our desktop app.
The guides should cover everything you need to know, but if you get stuck, you can always contact our support team by submitting a ticket or emailing support@greymass.com.
Happy voting!
