Users of Juno, a cryptocurrency network that’s part of the Cosmos ecosystem, have voted to take more than US$100-million worth of digital assets away from someone who received a disproportionate share of an “airdrop,” or mass gift of free tokens.
What happened: The airdrop, which took place several months ago, aimed to give out a maximum of 50,000 Juno tokens per user based on their existing staked holdings of Cosmos’ Atom token, but this didn’t take into account the fact the same user might have multiple wallets. A user who had Atom spread out among multiple wallets at the time of the airdrop ended up controlling 2.5 million Juno tokens. That compounded into 3.1 million tokens, worth a total US$107 million—about seven per cent of the circulating supply and enough to put the network’s governance system, which allocates votes based on tokens staked, at risk.
A proposal to remove all but 50,000 Juno tokens from the user, known as “the whale,” and send them to a community pool prompted intense debate and generated a massive turnout. By the time voting closed this afternoon, about 41 per cent of the votes were in favour of the proposal, enough to proceed with it.
Why it matters: Crypto enthusiasts often describe transactions made on the blockchain as immutable and irreversible. The vote highlights that in the end, the value of digital assets depends on social consensus. It’s difficult, but not impossible, to use software to change their key characteristics. Protocols like Cosmos with on-chain voting systems, like the one that facilitated this proposal, have an additional vector for political and social pressures that could affect the value of users’ holdings.
The Juno vote is not the first time something like this has happened, with Ethereum’s so-called “DAO attack” being the most famous example. In 2016, Ethereum’s leadership pushed to fork the blockchain after a US$150-million hack that affected 15 per cent of all ether in existence—the software version of turning back the clock to a timeline where the hack never happened.
“It’s going to set a precedent,” said Joe Abbey, a member of the technical staff at the digital-asset platform Anchorage Digital and an active hobbyist participant in Cosmos communities. “It definitely highlights the nuance of what it means to hold coins in a blockchain.”
What’s next: The Juno community will have to vote again, this time on the proposed software that will carry out the changes. Observers are watching closely to see if “the whale” will submit a request to unlock the tokens to sell them, which requires 28 days of notice. Proposals require five days of voting, so those writing the code update need to work quickly.
