- EOS is a Delegated Proof-of-Stake cryptocurrency that launched in 2018 after a record-breaking ICO raising over $4.1bn. Its focus is on providing development flexibility, network scalability, and user-friendliness.
- EOS is meant with the goal of mainstream adoption and thus not only attempts to maximise scalability, but also cater to enterprises with robust and secure software.
- Its dedicated governance architecture was the primary of its kind – including a constitution, arbitration forum, and more – and has been evolving since its inception.
- EOS features a unique resource model that needs users to stake EOS tokens so as to receive and use RAM, CPU, and Network Bandwidth.
- The company developing EOS, Block.one, raised quite USD 4.1 bn during a year-long ICO that led to July 2017. This constitutes the most important ICO recorded, exceeding the second largest ICO of 2017 (i.e., Filecoin with $257mn) by almost 16 times and therefore the second-largest ICO across all time by 2.5 times.
- Subsequently, block producers of EOS launched the mainnet in 2018 during a community effort. it’s a delegated Proof of Stake blockchain, with attention on development flexibility, network scalability, and user-friendliness.
- EOS is meant with the goal of mainstream adoption and thus not only attempts to maximise scalability, but caters to enterprises with robust and secure software.
- It is highly hooked in to the chosen consensus mechanism to succeed in this goal, rendering the governance of the 21 block producers and their replacement candidates as crucially important.
EOS is currently that specialize in four core aspects:
- Scalability “to meet needs determined by marketplace dynamics by a strong , efficient, and highly capable software environment”.
- Developer experience is “at the forefront of our minds” and optimized by “providing a good range of tools”.
- User experience must be frictionless with secure, simple, and familiar interfaces.
- Enterprises require “robust and secure software”, supported a high-performant consensus mechanism, tools for regulatory compliance, and more.
Key features include:
- Delegated Proof of Stake: EOS was one among the earliest blockchains that deployed a delegated Proof of Stake consensus (dPoS) mechanism. This consensus mechanism may be a crucial a part of achieving the specified performance.
- Resource allocation: in EOS, users have three sorts of resources, CPU, NET, and RAM. While CPU and NET are often accessed by staking EOS, RAM must be purchased from an EOS smart contract that’s adopted by Bancor and acts as a market making/ pricing contract.
- Governance: the chosen consensus mechanism reinforces the necessity for governance. In EOS, token holders, proxies, dApp developers, Block.one, and (candidate) block producers are participating within the governance of the network.
2. EOS key features
EOS’ most differentiating factors are its early specialise in establishing guidelines and processes for the blockchain governance and relatedly, its use of a delegated Proof of Stake consensus mechanism. Additionally, EOS features a unique resource model with three distinct resources: CPU, RAM, and NET.
2.1 Delegated Proof of Stake (DPoS)
One of EOS’ co-founders, Dan Larimer, invented this consensus mechanism. The EOS blockchain makes use of a group of 21 delegates, also mentioned as supernodes, to vote on new blocks during a round-robin model. EOS token owners elect these delegates out of a broader set of candidate block producers. Since block producers get rewarded per block validation, they need an incentive to urge elected as a block producer, which puts them in direct competition for votes with one another . The block rewards are paid on a per-block basis and are financed by annual token inflation of 1%. The below graphic from IG displays the schematic consensus process.
2.2 Resource allocation
Within EOS, three different resources exist: RAM, Network Bandwidth (NET), and CPU BandWidth (CPU).
Unlike RAM, whose supply is increasing continuously on a day to day , CPU is employed to execute transactions. Complex transactions require more CPU and the other way around . NET is that the possible throughput, defining the share of the blocks’ network representation which will be occupied. CPU and NET are allocated to users via the staking of tokens.
Although RAM was always priced and sold via a sensible contract using the ratio of obtainable RAM to EOS tokens within the contract, CPU and NET have only become tradeable with EOS REX, the EOS Resource Exchange. Previously to the present , the sole thanks to optimize resource usage was a surplus allocation that allowed dApps to exceed their allocated resources and draw from unused resources.
This aims to avoid an inefficient resource allocation from inactive – “hodling” – token owners that aren’t utilizing their allocated resources, additional market-driven allocation mechanisms are introduced.
There are five main groups of actors within the governance ecosystem of EOS. These actors are (1) token holders, (2) proxies, (3) dApp developers, (4) block one, and (5) (candidate) delegates.
While most of the actors have an immediate influence, dApp developers have an indirect influence from building the dApp ecosystem on top of the EOS blockchains. Similarly, the corporate launching EOS, block.one, has indirect, also as direct influence.
Direct influence relates to a clearly defined participation within the governance of EOS. Token holders, for instance , can vote for delegates or proxies by using their token. These proxies are usually trusted community activists which will vote for token holders on their behalf. Lastly, delegate (candidates) are parties with the wish to become a block producer of EOS.
EOS also features a dedicated constitution and various other governance processes.
3. Economics and provide distribution
The total supply of EOS isn’t capped. Instead, an annual rate of inflation of 1% is employed to reward (candidate) block producers. this is often a change enacted in February 2020; the previous rate of inflation of EOS was 5%. No further changes to the rate of inflation are foreseen.
As of writing, the entire EOS supply is 1,017,357,670. 55.4% of the entire supply is currently staked.