EOS crypto: History and overview

With its permissioned and enterprise-scale nature, the EOS network is like no classic blockchain platform. Instead, it is a smart contract environment that prioritizes performance and real-world use, resembling a computer operating system. Learn more about the benefits of EOS and its namesake token, now available on CoinLoan.

What is EOS?

EOS is an open-source blockchain platform that circumvents high fees and slow confirmation times to support thousands of Dapps (decentralized applications). Fast and forward-driven, it rests on agile architecture powered by the EOS tokens.

The project was officially launched in 2017. Its original developer – Block.one – is an entity based in the Cayman Islands. Founded by Dan Larimer and Brendan Blumer, it has offices in North America, Asia, and Europe.

Description of EOS. Source: eos.io
Description of EOS. Source: eos.io

EOS blockchain technology as a scalability solution

The blockchain trilemma – reconciling scalability, security, and decentralization – is an acute problem for many blockchains. For example, Ethereum is notorious for processing delays and soaring gas fees at congestion times, with an average speed of just 27 TPS in late 2022. Such setbacks complicate the use of Dapps, rendering them inefficient.

While the Dapp landscape is still faced with a resource shortage, EOS has the potential to alter it completely. It boosts usability and scalability, solving the trilemma by combining horizontal and vertical scaling. These processes are handled by top 21 EOS block producers – decentralized entities responsible for creating, processing, and verifying transaction blocks on EOS.

Larimer's approach results in more accessible and user-friendly Dapps on a secure and highly scalable foundation. Capable of handling millions of transactions per second, EOS supports such web service uses as:

  • setting up smart contracts
  • authenticating users
  • expanding Dapp storage
How EOS works. Source: blog.accubits.com
How EOS works. Source: blog.accubits.com

EOS.IO and EOS tokens

The EOS ecosystem comprises the EOSIO software and EOS tokens. The EOSIO platform architecture resembles a regular computer. It controls and manages the EOS blockchain network, ensuring two-dimensional scaling.

The EOS token is the cryptocurrency of the EOS network. A developer only needs to hold, not spend, EOS coins to utilize network resources and build and run Dapps. Token holders not running Dapps can share their bandwidth with other participants or rent it out.

Main advantages of EOSIO. Source: Eos.io
Main advantages of EOSIO. Source: eos.io

Delegated Proof-of-Stake (DPoS)

The DPoS consensus is the brainchild of Larimer, who was once a Proof of Stake (PoS) proponent. Realizing the imperfections of PoS, the flaws of Bitcoin's Proof of Work (PoW), and the dangers of algorithm decentralization in mining pools, he came up with a unique concept.

The DPoS consensus logic involves a system of parties belonging to three groups: witnesses, voters, and delegates. Each network user gets voting rights based on how many EOS tokens they hold – the larger the number, the greater the say.

The voters elect the EOS witnesses (100 in total), who police the network to guarantee consensus and validate transactions. While all witnesses are rewarded for participation, just 21 get a fixed income. The modesty of the number creates fierce competition.

Delegated proof of stake. Source: CoinCodex
Delegated proof of stake. Source: CoinCodex

The third category – delegates – oversees the witnesses' work and the progress of the network on the whole. It is also empowered to set new rules. The proposals that delegates submit are presented to the EOS community for a vote.

According to DPoS advocates, the election of delegates and node operators makes this system democratic. Rogue or misbehaving witnesses lose their status. If delegates suspect them of fraud, they intervene.

Advantages of the EOS network

One of the fascinating aspects of EOS is the underlying blockchain technology. While EOSIO has been referred to as an Ethereum clone or "Ethereum on steroids," it uses a different approach to consensus, leverages parallelization, offers enhanced security, and boasts a theoretical speed of up to 1 million TPS. You can learn more about the differences between EOS and Ethereum in our guide to EOS smart contracts.

EOS Virtual Machine (EOS VM) – an ecosystem pillar – is a WebAssembly-based environment for smooth contract execution. Meanwhile, the EOSIO Contract Development Toolkit (EOS.CDT) contains multiple tools for smart contract creation, modification, and utilization with standard implementations for C and C++. The technical features give EOS developers and users six key advantages.

#1 Security

In 2016, Ethereum suffered from an infamous DAO hack due to a codebase imperfection. The attackers stole coins worth around $60 million, challenging the project's resilience. That incident led to the creation of a hard fork called Ethereum Classic. The EOS platform prevents such attacks through the election of delegates who continuously monitor the network.

The delegates can freeze any faulty Dapp immediately and fix possible damage without affecting other accounts on the network. Thus, EOS's DPoS consensus shields users from security threats. Undermining this system would require taking over half of the delegates – an unlikely scenario, according to EOS proponents.

#2 Scalability

Unconditional scaling makes EOSIO highly flexible and adaptable to different business needs. Coupled with DPoS, parallel processing is the key to its superiority over its predecessors. The official EOS transaction capacity reaches millions of transactions per second, as opposed to 7 TPS for Bitcoin, 193 TPS for PayPal, and 1,700 TPS for Visa.

Processing any transaction requires all blockchain network nodes to reach a consensus. In EOS, processing can accelerate in two ways – horizontally ("scaling out") and vertically ("scaling up"). In the first case, more systems and computers join the network, widening its resource pool. Scaling up refers to boosting the computing power of specific components — parts of the virtual environment or Dapps.

Vertical vs. horizontal blockchain scaling. Source: Cointelegraph
Vertical vs. horizontal blockchain scaling. Source: Cointelegraph

#3 No transaction fees

One of EOS's selling points is the absence of transaction fees. In comparison, Ethereum users pay for every transaction, and the gas fees tend to soar as the network gets congested. In this regard, the inner workings of EOSIO are fundamentally different.

EOS users join an ownership model where access to network resources grows proportionately to token holdings. For instance, a user holding an X amount of EOS may only have (X * n) transactions processed. This principle replaces payments for individual transactions.

Another crucial aspect is participation in governance decisions. Holding EOS gives one a stake in the network and a say in its future.

#4 Comprehensive permissions

EOS has a strong focus on enterprise needs and custom smart contracts. As a result, developers can build company-relevant applications for in-house use. In addition, this crypto operating system offers comprehensive authorization management with numerous development and administration options.

Default permissions structure. Source: medium.com
Default permissions structure. Source: medium.com

The range of unique permissions is exhaustive. For example, developers can safeguard specific smart contract features or divide commands for function supplication between accounts with different command weights.

#5 Upgradability

EOS enables the creation of reversible smart contracts and modifiable Dapps. All EOS-based Dapps are upgradeable at any time. Rather than dealing with permanent bugs, developers can renew their decentralized applications, change their logic and features, and implement code fixes. This level of configurability is essential for programmable architectures.

#6 Multi-tasked processing

EOS smart contracts can be processed in parallel thanks to three distinguishing features. First, communication is non-simultaneous, so transaction parties do not have to be present simultaneously to communicate.

Secondly, computer system interoperability ensures a meaningful and smooth exchange of information. Thirdly, the transaction capacity increase is achieved horizontally and vertically – by including more hardware and boosting the processing potential.

Ups and downs of EOS

The 2018 EOS ICO became the biggest initial coin offering to date, as Block.one raised $4 billion. Meanwhile, the EOS crypto rose to the top 5 by market capitalization. However, four years later, the issuer was in dire straits due to its shrinking user base. Its proprietary token plunged from $10 in June 2018 to $4.40 in late 2021.

Meanwhile, the company faced harsh criticism from blockchain community members, both for its undelivered promises and the declining quality of the EOSIO code. In particular, entrepreneur Yves la Rose, who was once in charge of the EOS Nation block producer, accused Block.one of "knowingly misrepresenting" the network's capabilities.

Dan Larimer speaking to Bywire News in 2023. Source: The Bywire News YouTube channel
Dan Larimer speaking to Bywire News in 2023. Source: The Bywire News YouTube channel

EOS Network Foundation: Community takes over

Yet La Rose was committed to not just holding Block.one accountable, but also to reviving EOS. To that end, he launched the EOS Network Foundation (ENF) and became its "community-elected CEO."

In his words, "the community was reclaiming the chain for itself." By altering the token supply, it stopped the ongoing payments. ENF blocked a transaction that would distribute 67 million EOS tokens worth $250 million over the following five years. Essentially, Block.one was kicked out by the governing structure of block producers.

La Rose formulated the foundation's mission following Larimer's proposal to reshape the brand as "the biggest DAO." The ENF CEO tweeted, "As representatives of the largest DAO in the world, EOS, the ENF welcomes new investors, developers, businesses, and individuals with open arms as we enter a new era." The ENF took charge of the network's coordinated future to drive "positive global change."

Screenshot of Dan Larimer's Telegram chat. Source: theblockbeats.info
Screenshot of Dan Larimer's Telegram chat. Source: theblockbeats.info

In 2022, the coalition of EOS and three other blockchains using its protocol — Telos, WAX, and UX Network — set about rejuvenating the EOSIO protocol core code, committing $8 million to the project.

Later that year, EOSIO was officially rebranded to Antelope. Telos Chief Architect Douglas Horn described this hard fork of the EOSIO blockchain as "the most user-friendly, stable, and secure protocol for building new chains that are infinitely flexible and constantly upgradeable." La Rose called its release "the culmination of an historic effort undertaken by some of the most talented developers in blockchain."

What EOS token is used for

As mentioned above, transactions on EOSIO are completely free but require that developers maintain EOS holdings. For instance, owning 5% of all EOS tokens opens access to 5% of the total computing power. Validators – those who provide computing power to EOS – receive new EOS tokens as a reward at the end of the year.

Secondly, this cryptocurrency acts as the governance token of the network, enabling holders to participate in its decision-making. Finally, EOS can be traded on any major crypto exchange, just like ETH or any other cryptocurrency. Holders can send tokens from one wallet to another easily. The storage options include the official online wallet, unofficial desktop wallets, and cold storage.

EOS token price

As of March 9, 2023, EOS is the 42nd cryptocurrency by market cap (just over $1.25 billion), according to CoinGecko. It is trading at a current price of $1.14, with 30-day growth of 7.9% and a 60-day rise of 28.5%. The 24-hour trading volume currently stands at $153,304,283.

The highest price paid for EOS so far — $22.71 — was recorded in April 2018, while the lowest price of $0.502400 was seen in October 2017. The token also climbed above $14 in May 2021.

EOS price chart. Source: CoinGecko
EOS price chart. Source: CoinGecko

In 2022, when black swans like the FTX demise affected the entire crypto ecosystem, the price of EOS plunged. From nearly $3 in late March, it descended to roughly $1, following the market cap leaders.

How many EOS tokens are there?

The total supply of EOS is 1.1 billion, according to Bybit. There is no cap on the EOS circulating supply. While it cannot be mined, the annual inflation rate of 5% is designed to cover validators' needs.

EOS today

The EOS smart contract platform is seeing a development renaissance. At present, it supports 580+ Dapps. In late 2022, the ENF announced its plan to establish a $100 million ecosystem fund managed by EOS Network Ventures. The entity aims to attract and deploy capital, supporting web3 businesses and entrepreneurs building on EOS to help it grow.

Top 5 EOS Dapps by volume as of March 9, 2023 (balance, number of active wallets, and volume shown). Source: DappRadar
Top 5 EOS Dapps by volume as of March 9, 2023 (balance, number of active wallets, and volume shown). Source: DappRadar

EOS is gearing up for a resurgence in network activity. In April 2023, the ENF is scheduled to present its new growth strategy, an upgraded consensus mechanism, and an Ethereum Virtual Machine (EVM) system. Rose commented, "Combining the performance of EOS with the familiarity of Ethereum, Solidity developers are in for a treat. At 800+ swaps per second, $EOS EVM will be BY FAR the fastest EVM, benchmarked 3x faster than Solana + BNB and 25x faster than Avax."

EOS technical analysis and fundamentals provide insights into the token's potential. While EOS price predictions vary, successful network changes and positive crypto market events might catalyze the token. For example, EOS price analysis shows growth of 126% between June and September 2022 on the lead-up to Antelope.

EOS in CoinLoan Wallet. Source: CoinLoan.io
EOS in CoinLoan Wallet. Source: CoinLoan.io

How to use EOS tokens on CoinLoan

The EOS coin is a versatile crypto asset. Aside from underpinning a powerful blockchain platform, it can be part of an investment portfolio like BTC or ETH. One can trade EOS, earn a yield, or use the tokens for crypto lending.

Discover EOS applications on CoinLoan! This token is now included in our Exchange pairs, Loans, and Interest Account. You can swap EOS for other digital assets or fiat, deposit it to earn interest, or collateralize it for crypto-backed loans with convenient LTV options.