A beginner’s guide to the dapp platform that looks set to be one of the industry’s main contenders.
A blockchain platform for the development of decentralised applications (dapps), EOS is being built with the aim of creating the world’s most powerful infrastructure for dapps. Regularly listed as a leading contender to Ethereum, EOS released its Dawn 3.0 update in April 2018 and quickly became one of the top five largest cryptocurrencies by market cap.
There’s plenty of hype surrounding the platform and its native token, also called EOS, so let’s take a closer look at how EOS works, the benefits it offers and what the future might hold for this ambitious project.
What is EOS?
EOS offers an operating-system-like set of tools and services for the creation, hosting and execution of commercial-grade dapps. Its software includes everything from user authentication and accounts to cloud storage and server hosting, with the aim of providing an all-in-one solution for dapp developers. EOS is designed to not only ensure the quick and easy deployment of dapps, but also to potentially scale to millions of transactions per second and eliminate user fees.
EOS is similar in many ways to Ethereum, the original dapp platform that invented the smart contract system and is the world’s second-largest digital currency. However, while EOS is currently still running on the Ethereum blockchain as an ERC20 token, the project’s mainnet is scheduled for release in June 2018. When this happens, holders of EOS tokens will be able to exchange them for EOS coins, which will be hosted on the EOS network.
Where to buy EOS
What does the EOS coin do?
The EOS coin is the native currency of the EOS ecosystem. Once the EOS mainnet is live and developers can create and deploy dapps on the network, they’ll need EOS coins in order to generate tokens for their own platforms. Whether or not an application will actually be accepted on the EOS platform will also be determined by a voting system only available to EOS token holders.
In a unique move, EOS’s token sale began in June 2017 and is taking place over the best part of a year (341 days). The year is split into 350 periods of distribution – at the end of each period, the total number of tokens to be distributed during that period will be allocated to buyers based on the amount of Ether (ETH) they contributed as a proportion of the total ETH received during the period. Once the token sale is done, 1 billion EOS tokens will have been distributed.
What makes EOS unique?
What problems does EOS aim to solve? Why does the world need another blockchain-based dapp platform? The most succinct explanation of what the project aims to achieve can be found in its whitepaper abstract:
The EOS.IO software introduces a new blockchain architecture designed to enable vertical and horizontal scaling of decentralised applications. This is achieved by creating an operating- system-like construct upon which applications can be built… The resulting technology is a blockchain architecture that may ultimately scale to millions of transactions per second, eliminates user fees, and allows for quick and easy deployment and maintenance of decentralised applications, in the context of a governed blockchain.
In a lot of ways, EOS aims to do what Ethereum does – but in a new way. While Ethereum uses its own programming language, EOS focuses on user-friendliness by allowing developers to create smart contracts with a host of widely used existing programming languages. While Ethereum is looking for the best solution to the scalability problems that currently limit the amount of transactions it can process at any one time, EOS uses a delegated proof-of-stake algorithm that’s designed to scale much more effectively. Whether this proposed solution works or not, remains to be seen.
In short, EOS aims to offer a complete toolkit for dapp development, making it quick and easy for businesses and individuals to create blockchain-based applications.
How it works: The technology behind EOS
In its whitepaper, the EOS team outlines some of the key requirements for blockchain applications, including:
- Support for millions of users
- Free usage
- The flexibility to ensure easy upgrades and the fixing of bugs
- Low latency with a delay of no more than a few seconds
- Sequential performance to handle high volumes
- Parallel performance to divide the workload of large applications across multiple CPUs and computers
To achieve these goals, EOS uses a delegated proof-of-stake (DPoS) consensus mechanism.
Under this system, anyone who holds tokens on a blockchain that uses the EOS software can select block producers through a continuous approval voting system. Anyone may choose to participate in block production and will be given an opportunity to produce blocks, and the software enables blocks to be produced every 0.5 seconds exactly. This is designed to not only provide the flexibility needed to upgrade the system or fix bugs, but to also allow the system to scale toward 1 million transactions per second.
Other features of the EOS software include:
- An authentication system that includes user accounts with different permission levels
- Server hosting and cloud storage
- Parallel execution and asynchronous communication to allow the support of thousands of commercial-scale dapps
The EOS team
EOS is being built by block.one, a Cayman Islands exempted company. 100,000,000 EOS, or 10% of the total amount of EOS tokens to be distributed will be reserved for block.one and not offered to the public as part of the token sale.
The project is led by block.one CEO Brendan Blumer and CTO Daniel Larimer, both of whom have significant tech experience. Larimer in particular has an impressive CV, having played a key role in the development of successful crypto projects Steem and Bitshares.
But while block.one is building the EOS software, it will not configure or launch the EOS blockchain platform – this will be managed by members of the community unrelated to block.one.
Recent months have seen the announcement of a couple of key partnerships that could drive the future growth of the EOS ecosystem:
- In January 2018, block.one announced a joint venture with digital assets merchant bank Galaxy Digital focused on developing the EOS ecosystem and investing in projects that use EOS blockchain software. This saw the creation of a new US$325 million EOS.IO Ecosystem Fund.
- In March 2018, block.one announced a US$100 million joint venture to develop projects that use EOS software with German fintech incubator FinLab AG.
Wallets that support EOS tokens
Note that since the EOS mainnet launch in June 2018, EOS are no longer ERC20 tokens. As such, wallets which are ERC20-compatible do not necessarily support EOS.
For long-term storage of your EOS (ERC20) tokens, you’ll need to find a secure wallet that lets you retain control of your private keys. EOS recommends using either the MetaMask Chrome browser add-on or MyEtherWallet to store its ERC20 tokens. This information is likely to change however, when the EOS mainnet goes live and the EOS ERC20 tokens are swapped for EOS mainnet coins. Check the EOS announcements page regularly to keep updated.
Please note that the EOS website also features a list of those wallets that are known to be incompatible with the token sale, such as the Jaxx mobile and desktop wallet, Exodus, and wallets offered by a number of crypto exchanges.
What’s next for EOS: The EOS roadmap
In April 2018, block.one announced the first feature-complete pre-release of the EOS software, known as Dawn 3.0. You can check out this blog post for a full rundown of what the update provided, but highlights include improved scalability features, inter-blockchain communication using light clients, and security delayed transactions.
On April 6, the day of the Dawn 3.0 release, EOS was trading at US$6.10. However, excitement generated by the update, set against a background of widespread market optimism, saw its price climb above US$18 by the end of the same month.
The launch of the EOS mainnet was scheduled for June 3, 2018. This means that EOS has transitioned from the Ethereum blockchain to its own blockchain. As such, it is no longer an ERC20-comptaible token.
On June 2, 2018, at 22:59:59 UTC, shortly before the launch, EOS tokens were frozen on the Ethereum blockchain. These tokens were then converted to “real” EOS tokens on the EOS blockchain.
What to watch out for
It’s also important to point out that EOS is operating in a highly competitive corner of the cryptosphere. Not only will it need to do battle with the much larger and well established Ethereum, which does admittedly face its own challenges, but EOS will also need to compete with other highly valued projects like NEO, Lisk and Qtum.
If you’re considering buying any EOS tokens, make sure you do your own research before parting with your hard-earned cash. While EOS could one day offer a viable alternative to Ethereum and, on paper at least, has a few key benefits over the Ethereum network, the key fact to remember is that it’s not yet proven. Furthermore, whilst EOS is being developed, Ethereum and other established dapp platforms continue to grow and cement their position.
Frequently asked questions
Disclosure: At the time of writing the author holds IOTA and XLM.