Blockchain Takeovers in Web 3.0: An Empirical Study on the TRON-Steem Incident

TL;DR

The paper addresses the risk that blockchain network takeovers pose to Web 3.0 decentralization by conducting a large-scale, data-driven study of the TRON-Steem incident. It reconstructs daily stake and election snapshots and introduces the Voter-layer Decentralization Quantification (VLDQ) framework to measure decentralization at the voter level, while also analyzing BP-layer dynamics; lambda estimation is achieved by leveraging historic vesting data and new Hive data. The findings show a significant loss of Steem decentralization following the takeover, with Hive partially recovering but not reaching pre-takeover levels, and suggest that centralized actors can exploit neutral positions to influence governance; clustering and anomaly-detection reveal specific takeover strategies and influential voters, informing mitigation strategies such as vote-weight adjustments, vote-delays, and reputation-based weighting. Altogether, the work highlights the fragility of DPoS governance under hostile pressure and offers practical design directions to strengthen decentralization and user rights in Web 3.0 systems.

Abstract

A fundamental goal of Web 3.0 is to establish a decentralized network and application ecosystem, thereby enabling users to retain control over their data while promoting value exchange. However, the recent Tron-Steem takeover incident poses a significant threat to this vision. In this paper, we present a thorough empirical analysis of the Tron-Steem takeover incident. By conducting a fine-grained reconstruction of the stake and election snapshots within the Steem blockchain, one of the most prominent social-oriented blockchains, we quantify the marked shifts in decentralization pre and post the takeover incident, highlighting the severe threat that blockchain network takeovers pose to the decentralization principle of Web 3.0. Moreover, by employing heuristic methods to identify anomalous voters and conducting clustering analyses on voter behaviors, we unveil the underlying mechanics of takeover strategies employed in the Tron-Steem incident and suggest potential mitigation strategies, which contribute to the enhanced resistance of Web 3.0 networks against similar threats in the future. We believe the insights gleaned from this research help illuminate the challenges imposed by blockchain network takeovers in the Web 3.0 era, suggest ways to foster the development of decentralized technologies and governance, as well as to enhance the protection of Web 3.0 user rights.

Figures (14)

• Figure 1: Timeline for TRON-Steem takeover incident
• Figure 2: Values estimated for VESTS/STEEM exchange rate $\lambda$ from block 1 to block 52,630,593
• Figure 3: A real example illustrating the significant impact of $\lambda$. Voter A purchased VESTS mainly during the first week (before 2016/03/31), while voter B purchased VESTS after 2016/03/31
• Figure 4: A scatter plot characterizing voters using three variables, the total amount of invested STEEM, the total amount of purchased VESTS and the first date of investment
• Figure 5: Heatmap of top-60 BPs' normalized block creation rates in Steem and Hive during the takeover month (month 0), one year before the takeover (month -12 to -1) and one year after the takeover (month 1 to 12)