Crypto Analysis: EOS

 

Summary

  • Project name: EOS
  • Token name: EOS
  • Ticker symbol: EOS
  • Token Type: ERC20 to EOS
  • Start date: May 2017
  • Exchanges: 20+
  • Market Cap: $5,365,087,431 as of 22/09
  • Total Supply: 1,006,245,120 EOS
  • Circulating Supply: 906,245,118 EOS

EOSchart2209

Overview

In the current blockchain ecosystem, there are many blockchain infrastructure protocols that are competing between one another. Many of these protocols are seeking to cater to a different type of development audience and solutions to be brought to the software market. Blockchain protocol companies are crucial for the development of the industry as they are the ones that will power the foundation of the space and the future vertical applications built upon it. In this analysis, we are going to look at one of the most promising blockchain protocols out there – EOS. So what really is EOS? As per the Introduction Document (White Paper) written by Ian Grig “a performance-based and self-governing blockchain that provides an operating system for building large-scale consumer-facing distributed applications.” Simply put EOS is an operating system, a platform similar to Windows, in traditional technological terms, where DApps (Decentralized Applications) can be built on top. A vertical distribution of applications and companies that could tackle a range of different issues in real life leveraging the technology of blockchain. A key fact in the definition of this blockchain is the consumer. This protocol is built so that is immensely scalable with one of the highest transaction processing speeds of all the blockchain protocols. What this really means is that the EOS environment is targeting B2C companies with large volume services applications where fast exponential growth through a large user base is defining.

Product

EOS.IO is a blockchain protocol solution that seeks to set the infrastructural foundation for building horizontal and vertical decentralized applications. This revolutionary technology is seeking to create an ecosystem that provides accounts, authentication, databases, asynchronous communication and the scheduling of applications across multiple CPU cores and clusters. Through technology and the implementation of safe, secure and fast environment, EOS seeks to empower businesses to build, grow and adapt in the ever-changing technological world. EOS uses DPOS consensus mechanism which is made up of two tiers. The first tier consists of 21 top elected Block Producers where each BP produces one block at a time, sequentially. Through the validation and production of blocks, the producers have rewarded EOS tokens. The second tier of the mechanism involves the election of the top block producers by the community using the Proof of Stake (PoS) mechanism.  EOS has a constitution in which the reward for block production can be limited to 5%. The transactions are free on the protocol and producers are economically incentivized to participate with passive payments from a predefined rate.

EOS Block Producers

In terms of the Business Model of EOS, the company is not looking at the generation of cash flow from their platform rather building vertically on top of it. DApps which are going to generate the cash that the company needs to justify its valuation and investment is going to be fostered and supported in their development. A platform where DApps encompassing all industries could be built: Advertising, Banking, Cloud Storage, Consulting, Consumer Products, Crypto & Fiat Trading, Education, Gaming, Government, Healthcare, Identity, IoT, Journalism, Legal, Logistics, Music, Productivity, Real Estate, Retail, Social Media etc. DApps that can demonstrate the utilization of the technology while demonstrating ample creativity by thinking outside the box and having unique ideas paired with the impact of their application on the real world. Impact on both social and financial. Moreover, DApps that demonstrate their scalability, their growth potential.  For example, there are rumours that Bitfinex would be looking to build on top of EOS for their Decentralised Exchange. HitBTC is another top exchange that is also eyeing up the EOS platform for that matter. Other DApps have already proved successfully growing with user base larger than most Ethereum DApps like PRA Candy Box and EOS Knights.

EOSdApps2209

Key features

  • Flexibility – Languages that can be used for the development of DApps is C++ which is one of the most popular and best-performing programming languages with a large pool of available developers – C/C++
  • Scalability – the blockchain system seeks to cater from the SME entrepreneur to the big corporate allowing exponential growth
  • Speed – the protocol has high throughput and performance due to the use of event sourcing patterns. Block time of 0.5 seconds. Through the use of WebAssmebily (WASM) the protocol targets 200,000 Transactions Per Second (TPS).
  • Consensus – Delegated Proof of Stake(DPOS) mechanism used which has a two-tier governance structure
  • Smart Contracts – a dynamic expression of negotiation rather than ‘the four corners of the page’ classic
  • Business model – the main utility of the projects stems from the provision of a solid infrastructure for DApps. Through the inflationary rate of the ecosystem, the block producers and facilitators of the network get paid.
  • Free Usage – there are no transaction fees. The blockchain is free to use by its users
  • Security – actions with mandatory delay and key recovery capabilities provide additional security to the EOS holder

Management

Block One is the main organisation behind the EOS platform. The company’s mission statement has to do with the encouragement of the creation of open source software technologies and market systems for the good of the general public through a broad range of sectors. The passion for decentralisation that drives the company is crucial to propelling it forward with speed and precision. On the helm of the organisation, we have CEO Brendan Blumer and CTO Dan Larimer. Brendan Blumer has been a serial entrepreneur since the age of 15 starting off in the MMORPG Gaming vector with Gamecliff and the Account Network followed by software solutions for the Real Estate sector in Asia with Okay.com. Brendan has continuously shown an aptitude for innovation and commercial awareness. Larimer is not a new comer to space as he is the inventor of the Delegated Proof of Stake consensus mechanism and a serial entrepreneur in the Technology sector since 2004. From Virtual Reality Simulators through BitShares and Cryptonomex, Dan has consistently delivered value by producing innovative products, building brands and delivering to his customers.

EOS VC is the venture capital hand of Block One which has $1B allocated from the initial capital raised through the ICO. The main goal of this fund is to foster the development of the EOS ecosystem and any companies looking to build on top of it. There are 5 partnering VC funds that have been given the heavy duty of finding the hidden gems in the DApps space, supporting them and investing in them. The hidden gem of companies that can really provide products and services to the consumer market transforming the way we interact with each other through the use of blockchain technology. Below are the 5 VCs undertaking this hefty task: FinLab, EOS Global, SVK Crypto, Galaxy Digital and Tomorrow BC.

EOSPartners

Development

Lead by Dan, the development team is showing consistent delivery and one of the most active projects commits on GitHub within the blockchain space. The open smart contract platform has more than 9,100 commits with 159 contributors under the MIT licensing on GitHub. There are more than 35 repositories with Documentation and different language applications and examples of the protocol on GitHub. 9000+ Start given for the protocol and 57 closed issues there is constant work demonstrated. Top contributors include Dan Larimer, Kevin Heifner, Brian Johnson, Wanderingbort and Arhag.

Community

An interesting aspect of the EOS protocol is that governance factor embedded in the Consensus mechanism is community inclusive where each holder can actually take active participation in the decision-making process of running the blockchain. The presentation of the company through the different social channels is consistent and great brand awareness is encouraged through professionalism and regular curated posts. The information conveyed to the community is consistent through the channels even when negative aspects of the protocol are reviewed such as the EOS constitution changes and arbitration. Block.one’s twitter which EOS is under has 191k followers and more than 1300 tweets while the Medium has 18.7k followers and Facebook 15k+.

Strengths:

  • Great emphasis on Developer Relationships and protocol promotion. The chain of global hackathons and the support from the EOS core development and 21 main block producers help adoption of the protocol and enhancement of the blockchain space in the public view
  • Record-breaking $4 billion of capital puts the company at a great advantage in front of its competitors in terms of the financial backing it has

Weaknesses

  • The democratic election system of governance of EOS could be viewed as a sticky point and one of the weaknesses of the network.
  • The Transaction Speed target of 200,000 EOS is putting the protocol at the forefront as the fastest ones out there. The fact that it is barely a few months old and untested for the actual capacity stated.

Opportunities

  • Lack of transaction costs, speed and the development ecosystem present perfect place for businesses to build DApps
  • The physical capability for exponential growth due to the infrastructure of the project
  • DApp developer toolkit is comprehensive and used by many while the User Interface is familiar to the audiences

Threats

  • As most blockchains at their current state, Quantum Computing is posing a threat to the security of the cryptographic keys to the blockchain
  • Lack of apathy from the whole population of the voters in terms of its election and governance

Conclusion

As ones of EOS’s main underlying goals to increase scalability is achieved, investor’s attention can actually move up from the infrastructure layer to the application layer where the real value and application of blockchain technology lies. Finally, EOS is simply trying to build a smart business blockchain system for the everyday person that can be used with ease, speed and efficiency.

External Resources:

EOS website: https://eos.io

EOS Whitepaper: https://eos.io/documents/EOS_An_Introduction.pdf

EOS Technical Whitepaper: https://github.com/EOSIO/Documentation/blob/master/TechnicalWhitePaper.md

EOS dApps: https://dappradar.com/eos-dapps

EOS Block Explorer: https://eospark.com/

Block One: https://block.one/

Charts: CoinMarketCap – https://coinmarketcap.com

 

Disclaimer: Disclaimer: This document is for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation.

 

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