2021 is not the year for EOS
2017 was the year smart contract platforms and the blockchain ecosystem began to challenge digital conventions. That same year created a ‘golden rush’ of platform development, facilitated by the emergence of ICOs in an unregulated market. In 2017, smart contracts were equivalent to NFT in 2021 or DeFi in 2020, and 2017 was the year when the majority of existing blockchain networks grew and increased their market capitalization.
Significant funds were raised from ICO projects throughout 2017 and retail investors supported projects based on a speculative future that has yet to come to fruition. Projects like Tron, or IOTA are still relevant and create functional blockchain ecosystems. was one of the top projects of 2017 and hopes to overtake Ethereum due to its easy-to-deploy infrastructure.
EOS and the future of smart contract platforms
The EOS platform developed by Block.One, in 2017, did a year-long ICO of over $ 4 billion. The length and sum of the ICO has attracted a lot of attention to the project. With all the media attention, EOS was fined $ 24 million by the SEC in 2019 for running an unregistered ICO.
EOS is developed by Dan Larimer, who has also founded projects like Steem or Bitshares. EOS works in a similar way to other blockchain networks but has some notable differences; The ecosystem uses a Proof-of-Stake consensus mechanism; it can support more than 4,000 transactions per second, making it a solid competitor to Ethereum, which has faced network congestion in the past; It encourages free usage for dApps users and developers as it does not require users to pay transaction fees on the platform.
The launch of their mainnet was delayed in 2018 for a week. It was one of the first indicators to show that EOS, while exaggerated and promising, will have problems delivering their products. Hackers have hacked Block.One’s Zendesk (NYSE :), sending phishing e-mail to users. Later, a Chinese security company discovered vulnerabilities in the EOS network, where hackers had full control over the nodes due to the vulnerability.
Did EOS sell a false promise?
While good technology and vision are the cornerstones of any successful startup, this doesn’t always deliver results. As EOS discovered, their actions and failure to meet the community’s expectations turned out to be their main flaws.
EOS’s infrastructure allows developers to develop dApps on the EOS network, and they make programming and deployment much easier. However, as EOS became more centralized in governance, developers discovered high entry scores and network-related challenges.
Deploying the app on EOS requires developers to rent CPU and NET and buy RAM at the same time. This helps Block.One develop a speculative-prone secondary market. Despite the lack of transaction fees, only one dApp was deployed on EOS in July 2020, compared with 32 on Ethereum. However, EOS has the second largest number of dApps deployed on the network, and more transactions than Ethereum.
The high entry point to using EOS has forced developers to fork EOS and create more sustainable and efficient platforms like Telos or WAX. The community on this matter is becoming segmented and there are concerns that retail investor funds are only being used to increase Block.One’s margins.
On the Flipside
- EOS has more transactions on the network than Ethereum and still holds the 2nd spot in terms of total dApps.
- Following the SEC penalty, Block.One did not want to deploy new applications that did not meet regulatory agency standards.
- EOS focuses on building other platforms like Voice.com using EOSIO.
What does the future hold for EOS?
Dan Larmier resigned as CTO from Block.One in December 2020, causing a spiraling effect across the entire network. Youtube celebrity Colin Talks Crypto revealed that he has sold “100% of his EOS”, indicating that EOS is on the decline.
EOS has faced a number of problems over the years, one of which is network congestion. This was the result of an airdrop carried out by EIDOS when transactions nearly quadrupled. Furthermore, the community denotes centralized governance as a major catalyst for EOS’s decline. With such monetary incentives, nodes with deep pockets took control of the network for their own benefit. Luke Strokes emphasizes the secrecy surrounding Block.One and how this hinders the growth of the network.
Most recently, Block.One has spoken out about their change of strategy and approach to creating a support layer using EOS. While early investors favor EOS for better existing smart contract platforms, the shift to Bitcoin was not in line with their shared ideas.
EOS does not adapt to the market demand and develops a DeFi platform similar to Uniswap or Pancakeswap. Fees that do not exist on EOS could have created a better ecosystem for DeFi to thrive; however, EOS didn’t meet developers midway through. EOS failed to meet the demand of Effect Network, which moved their DeFi development from EOS to Binance Smart Chain. The company declares concerns about the future of EOS and its governance structure.