EOS is a digital asset and the native token of the EOSIO network, a blockchain platform that aims to function as a decentralized operating system. It offers a range of tools and services to developers of decentralized applications (dApps).
Key Takeaways
- EOS is a blockchain platform aiming to function as a decentralized operating system designed for dApp development.
- The EOS blockchain network – called EOSIO – uses a Delegated Proof of Stake (DPoS) consensus mechanism to process transactions at a high throughput rate.
- EOS is the native token of the EOSIO network used for security and governance.
- EOS aims to be a scalable and user-friendly platform for dApp development, with the goal of enabling developers to create dApps that have free access.
The EOSIO network was first proposed in a whitepaper in 2017 and raised over $4 billion through an ICO which lasted for a year. The ICO was one of the most successful crowdfunding campaigns in cryptocurrency history.
How Does EOS Work?
The EOSIO blockchain mimics the performance of a traditional computer. This concept may sound too complicated, but it is not very hard to grasp. Imagine the fundamental resources a computer provides for running a normal application. Now cram that into a blockchain network that runs the decentralized alternative of that app.
That’s what the EOSIO blockchain does with three types of resources powering it: bandwidth (disk), computation (CPU), and state storage (RAM). These resources transmit information across the network, process the power required to run dApps, and store blockchain data, respectively.
Developers access these resources by paying for them with the network’s native token – EOS. While dApps built on EOSIO don’t charge for transactions, the costs of using the network pass on to developers. They must pay for the resources required to run their dApps. However, dApps users don’t have to pay for transactions, making the their tokens free to transfer.
Delegated Proof-of-Stake (DPoS)
EOSIO secures itself by using a Delegated Proof of Stake (DPoS) consensus. DPoS utilizes a real-time voting and reputation system to determine which user can create the next block on the blockchain. This means that anyone holding EOS tokens can participate in the network’s operation. Although, the more tokens an individual owns, the software is more likely to select him for the job.
Users can lock or “stake” each token to represent a vote that they can use to support platform’s development. Staking the coin this way allows a user to support the EOSIO ecosystem and potentially earn rewards.
Governance
EOSIO has a more active approach to governance. It has features that allow users to vote and implement changes to the rules of the software. Holding EOS gives a user the right to participate in this voting process. Block producers are responsible for carrying out the decisions that are approved. Both holders and block producers can also vote to alter the “EOS Constitution,” a governing document that outlines the rules between all EOSIO users.
This gives block producers a significant amount of power over other users on the network. For instance, block producers have the ability to freeze accounts. This requires the approval of 15 out of 21 EOS block producers. This has raised concerns regarding the blockchain’s design, mainly for the scenario of it potentially ending up in centralized control.
The EOS Economy
EOS uses a different approach to generating new blocks than the mining process used by Bitcoin. Instead, block producers are responsible for generating the required number of blocks and are rewarded with new EOS tokens for each block they produce. These block producers can specify the amount they want to be paid, and the number of tokens they create is determined based on the median value of expected pay published by all block producers.
There is a risk that block producers may attempt abusing this system by requesting higher payouts. To prevent this, the EOS network limits the total annual increase of the token supply to 5%. EOS Token holders, who have the power to vote on block producer pay, can also vote out producers who request more than their fair share.
This mechanism is linked to the EOS storage system since all token holders pay for file storage on the EOSIO network through a portion of the annual inflation. As long as they are storing a file on the network, their EOS tokens will be locked up and will decrease in value at the rate of inflation. If storage demand increases, block producers can demand higher payouts. EOS token holders are the ones who approve this in order to compensate for the additional work. On the other hand, if storage demand decreases, inflation will lower, reducing the loss in value of stored EOS tokens.
EOS Development
The EOSIO software, which forms the basis of the network, was developed by Block.one and architected by Daniel Larimer. In June 2018, the EOSIO blockchain launched by a decentralized group of block producers (BPs). They bootstrapped the network based on a snapshot of the tokens distributed during Block.one’s ICO.
EOS Network is well-known thanks to its advanced tech and the supportive EOS community. It has a user-friendly interface with various tools and resources to help users become quickly familiar with the blockchain.
Notable dApps of the EOS Ecosystem
The EOSIO platform received positive reception within the blockchain community and has seen numerous applications develop on the platform.
Ubuntu Energy Ledger
Ubuntu Energy Ledger is a clean energy marketplace built on the EOSIO blockchain aiming to provide affordable renewable energy to Africa and power 4 billion households by 2030. The marketplace relies on microloans to fund small businesses and homes. They are driving the adoption of green energy in Africa.
All_ebt Food Stamps
All_ebt is an EBT (Electronic Benefit Transfer) virtual card that operates on the EOSIO blockchain and aims to help low-income communities overcome issues of financial inclusion and access to healthy food. Almost 45% of the population in Puerto Rico, including families, mothers and young children, the elderly, and disabled, rely on Food Stamps (22% in the U.S.). However, the digital economy excludes them because food stamps cannot be used online. All_ebt aims to change this.
DACTROIT
DACTROIT is a decentralized autonomous community. It offers communities the ability to possess and manage a complementary currency and fast internet access. This experimental venture intends to showcase alternative methods for individuals to share their spaces, resources, and relationships.
EOS FAQ
Frequently asked questions.
Who Are the Founders of EOS?
EOS was founded in 2017 by a company named Block.one, led by Dan Larimer as the Chief Technology Officer and lead architect of the software, and Brendan Blumer. Larimer is a prominent figure in the blockchain technology industry. He previously developed the first decentralized cryptocurrency exchange, BitShares, and the first crypto social media platform, Steemit.
The EOS crypto project raised funds through an Initial Coin Offering (ICO) that lasted for one year, starting on June 26th, 2017. Block.one sold 1 billion tokens and raised $4 billion, making it one of the largest ICOs in the history of the cryptocurrency industry.
What Makes EOS Coin Unique?
It is a cryptocurrency that has several notable features, including:
- Scalability: One of the main challenges in the cryptocurrency world is finding a balance between decentralization and scalability. The EOSIO blockchain uses a Delegated Proof of Stake (DPoS) consensus mechanism. It allows it to process a staggering theoretical amount of 1 million tps through the use of parallel processing.
- Flexibility: EOS has a solution in place to protect against potential attacks like those that have affected Ethereum’s Decentralized Autonomous Organizations (DAOs). If the network detects a problematic transaction, the EOSIO platform can halt the node processing it and resume processing new transactions once the issue resolves.
- Decentralization: Ethereum is often referred to as a decentralized supercomputer. EOS is deemed by some as a decentralized operating system.
How does the EOSIO Network Secure Itself?
EOSIO blockchain uses the Delegated Proof of Stake (DPoS) mechanism to secure its transactions and also has a more active approach to governance. It has features that allow its users to vote on and implement changes to the rules of the software through a process called staking. Holding EOS tokens gives users the right to participate in this voting process, and block producers are responsible for carrying out the decisions that are approved. Both holders/stakers and block producers can also vote to amend the “EOS Constitution,” a governing document that sets out the rules determined by the users of the network.
This gives block producers a significant amount of power over other users on the EOS network. For instance, block producers have the ability to freeze accounts, which tends to enhance security against malicious actors. However, this power could potentially be subject to abuse. It only requires 15 out of 21 block producers to vote in favor in order to freeze an account.
How do I Buy EOS?
- Choose a CEX: The first step in buying EOS is finding a crypto exchange that supports its trading.
- Create an account: Once you have selected an exchange, you will need to create an account by providing some personal information and verifying your identity.
- Deposit funds: In order to buy EOS, you will need to deposit funds into your account. You can do this by linking a bank account or credit card, or by transferring cryptocurrency from a separate wallet.
- Search for EOS: Once you have funds available, you can search for the coin on the exchange’s trading platform.
- Place a buy order on the exchange for EOS: You can typically choose between a market order, which fills at the current market price, or a limit order, where you specify the price at which you are willing to buy. The coin’s market cap and circulating supply determines the EOS price.
- Confirm the transaction: Once you have placed your order, you will need to confirm the details of the transaction. Double-check the price and quantity before confirming the purchase. The same applies when you want to sell EOS coins.
Final Thoughts
Since blockchain’s inception, platforms, businesses and institutions have been witness to its impact on changing the way they work. We are no exception with our upcoming DUA token. We plan to implement the power of blockchain and DeFi into our matchmaking ecosystem with a combined user base of over 5 million. Learn about DUA Token here and follow our Twitter for further updates!