Steem Soft Forks to Freeze 17.6M Tokens Held by Former Witnesses

Published at: April 6, 2020

Tensions between Steem (STEEM) and the Hive (HIVE) community continue to escalate, with Steem executing a soft fork to freeze up to 20 accounts owned by the network’s former witnesses.

The frozen accounts hold 17.6 million STEEM, worth approximately $3.2 million and equating to nearly 5% of Steem’s total supply.

On April 4, the soft fork was proposed in a Steemit post authored by the new account "softfork2288."

In response to the purported “uncertain threat that the leaders and main influencers of [Hive] represented to the Steem Blockchain,” the fork sanctioned roughly “no more than 20 accounts “ that meet three criteria:

“Accounts that ran the version 0.23 during the Hardfork on Steem and were still in the Top 20 rank, shortly before the Hardfork. Accounts that proxied or directly voted to more than 10 witnesses running the version 0.23 on the Steem Blockchain during the hardfork with high influence. Accounts directly associated with operating these accounts.”

Hive leaders accused of posing existential threat to Steem

The author states that community support for the soft fork is needed in order to “protect” Steem, with the post taking aim at the former top Steem witnesses.

The user emphasizes that 50% of the witnesses were “running a hostile version 0.23” of Steem prior to the hard fork being executed, warning:

“If that status had been kept that way, it could have resulted in breaking the Steem Blockchain, because these witnesses would not work anymore for the Steem Blockchain directly after the Hardfork.“

“As top consensus witnesses, the duty and task would have been to maintain the integrity of the Steem Blockchain but it was decided to abandon the chain they promised to protect,” the post asserts.

Hive fork excludes Sun

On March 20, Hive hard-forked off from Steem after weeks of growing tensions following Tron founder Justin Sun’s purchase of Steemit Inc and 20% of STEEM supply in February.

The new fork would airdrop HIVE tokens at a 1:1 ration to all STEEM holders with the exception of the 20% founders reward acquired by Sun.

HIVE crashed 50% in one hour

On April 6, the price of HIVE suddenly plummeted 50% over one hour.

After consolidating at approximately $0.175 for roughly one week with daily volume steadily hovering between $30,000 and $50,000 on Bittrex, record 24-hour volume of over $350,000 led to a crash down to $0.087. 

HIVE/USD 4-Hr Chart. Source: TradingView

HIVE is trading for $0.125 as of press time. The suspiciously timed dump has driven the price of HIVE below the value of STEEM for the first time since the hard fork — with Steem currently trading for $0.175.

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Hard Fork
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