What is EOS?

Preface

Blockchain technology is still in the development stage and is currently being used more in the financial technology (FinTech) sector.

BTC, born in 2009, and ETH in 2013, have demonstrated the necessity of adopting blockchain technology. They are built using cryptography and possess important characteristics such as decentralization, transparency, and security. The emergence of BTC has also promoted cryptocurrency transactions, ensuring anonymity for traders without the need for a third party.

Although BTC has an invincible dominant position, its slow block time greatly affects the application building on its on-chain Block. In addition, BTC has not yet solved the scalability, speed, and efficiency issues required in Cryptocurrency transactions.

Therefore, Ethereum and smart contracts are trying to solve the efficiency and scalability issues. The emergence of Ethereum has given birth to decentralized applications (DApps) and Non-fungible Tokens (NFT), and has created favorable conditions for the smooth operation of these products on-chain.

BTC and ETH are still far ahead of many blockchain projects. However, their congested networks, high Gas fees, and slow transaction times have left room for development for other projects.

Blockchain software company Block.One launched EOS in 2018 in response to the need for a decentralized blockchain that combines scalability, efficiency, speed, environmental friendliness, and cost-effectiveness, allowing developers to easily build DApps with the support of smart contracts.

This article will focus on explaining what the EOS blockchain is, discussing the unique features and operation of the network, and exploring how to use and trade EOSToken.

What is EOS?

As a blockchain-based Decentralization platform, EOS supports secure access and authentication, permission verification, data hosting, usage management, DApp interaction with the internet, in addition to being used for developing, organizing, and operating commercial applications or Decentralized applications.

It builds a secure channel for Decentralization applications to interact with the Internet, ensuring the authenticity and accessibility of the interaction between the two. EOS enables the development of blockchain applications in a way similar to developing Web applications.

The EOS blockchain is regarded by many developers and cryptocurrency enthusiasts as the driving force behind the vigorous development of cryptocurrency and blockchain technology, solving the difficulties that BTC and ETH have not yet overcome, and achieving high scalability, efficiency, speed, environmental friendliness, and zero transaction fees by providing high-speed infrastructure.

EOS has many similarities with Ethereum, such as being a Smart Contract-based blockchain and supporting the construction and development of DApps or business apps. However, compared to Ethereum, EOS has a significant advantage in that it can process millions of transactions per second, and more importantly, these transactions are free, while Ethereum can only process 15 transactions per second.

What sets them apart is the Consensus Mechanism. Prior to the merger, Ethereum (ETH) used Proof of Work (PoW), while EOS adopted Delegated Proof of Stake (DPoS). The following text will explain this in detail.

EOS Ecology

The EOS ecosystem consists of two parts, EOSIO software and Token.

What is EOSIO software?

EOSIO is responsible for overseeing the entire EOS blockchain network, which can be likened to the operating system of a computer, but this operating system also needs to manage and regulate the operation of EOS. It is also an authorization platform that allows developers to create DApps.

What is EOSToken?

EOSToken is a Cryptocurrency circulating and used in the EOS network. As the native Token of the EOS ecosystem, its main uses include:

• Trading
• Payment
• Set up

The last one refers to the fact that developers need to hold a certain proportion of EOS coins to build on-chain. For example, if you hold 1% of the shares in the EOS network, you correspondingly own 1% of its ecosystem. Therefore, you have the right to obtain the corresponding proportion of Computing Power to build and run DApps and conduct transactions. This is uncommon in most blockchain networks, and it is also the reason why the EOS network is cost-effective.

If you are not a developer or an ordinary user, how can you benefit from holding EOS coins?

Any holder or investor can allocate or lease their ownership to more active network participants, especially developers.

In addition, you can buy and trade EOSToken on major exchanges such as gate, or store it in multiple Wallets, including Ethereum Wallet, MyEtherWallet and MetaMask.

How EOS Works

EOS uses Delegated Proof of Stake (DPoS) to ensure high-speed transactions. The DPoS Consensus Mechanism verifies each transaction on-chain through "Block producers", who are elected by token holders or investors.

The voting power of investors depends on the amount of EOSToken they hold, or more precisely, the amount of stakeToken, that is to say, the more EOS staked, the greater the voting power.

The main task of Block producers is to ensure the security of the EOS Block chain and to ensure the effective addition of Blocks.

If the Block producer does not fulfill their functions well, they will be replaced by alternative Block producers. Similarly, alternative Block producers are also selected by coin holders or investors through voting.

For every production of a Block, the Block producer can receive EOS Token rewards, but the premise is that they need to produce a sufficient number of Blocks.

In other words, the more output, the more rewards, which can motivate Block producers to do better work to get higher rewards, and thus reduce the probability of the entire network being affected by irresponsible Block producers.

To ensure the required output, the reward for Block producers is distributed by the "mechanism-limited producers", thereby controlling the annual supply growth rate of EOS within a certain percentage, such as 5%.

At the same time, holders also have the right to inspect the activities of Block producers. If a producer performs poorly or produces excessively, they can be voted out.

However, if there is indeed a need to increase the inventory of EOSToken, holders can also vote to 'boost' Block producers, thus motivating them to produce more Blocks. However, this will lead to inflation. Therefore, even if Block producers are required to produce additional Blocks, as long as storage demand drops, inflation will also drop, thereby reducing the loss of EOSToken.

It is worth mentioning that EOS uses Delegated Proof of Stake, which is completely different from the Proof of Work used by BTC and Ethereum. Proof of Work is a concept of using a single computer (Node) connected to the network to produce Blocks through Mining. The process of producing and adding Blocks to the Blockchain is extremely time-consuming, which not only slows down the operation of the two major Blockchains, but also causes network congestion.

Features of EOS

Anyone can manage and control DApps and business applications for free, and it's very simple.

One similarity between EOS and Ethereum is that both platforms can be used to develop DApps.

But unlike Ethereum, EOS is faster and simpler, solving the long-standing problem of high gas fees in Ethereum.

User-friendly blockchain with strong scalability, capable of supporting DApps of various business scales

DApps can be applied, making it easier for developers to develop, control, and maintain DApps.

The correlation between EOS Market Cap and Ethereum is very strong

Can process millions of transactions per second, strong appeal to users

Compatible with multiple popular Wallets, and successfully launched on major mainstream exchanges such as gate

EOS RAM

EOS RAM is a critical resource in the EOS blockchain for storing smart contracts, account data, and other related information. Due to its limited supply, users need to acquire RAM through purchase or lease, and its price is subject to market fluctuations. On December 17, 2023, the EOS ecosystem decided to stop the inflation of RAM and fix the total supply at 390GB, increasing the scarcity of RAM and triggering an investment frenzy in the EOS ecosystem, causing the price to skyrocket sixfold.

The characteristics of EOS RAM are similar to real-world land resources, which can be freely traded in the ecosystem, playing an increasingly significant role in promoting ecosystem diversity. For example, the famous dApp Upland on EOS requires 6.7GB of RAM to maintain its operation. The extensive use of such dApps increases the demand for RAM, highlighting the crucial role of RAM in the expansion of the EOS network and dApp functionality. In addition, Non-fungible Tokens on EOS EVM have also become important consumers of RAM, requiring a large amount of RAM for their operational efficiency.

To support ecosystem development, the EOS Foundation has taken a series of measures, including the launch of the encapsulated RAM (WRAM) to improve its tradability; major updates to the RAM system, including transferable RAM, RAM logging and notification, safe RAM purchase through Buy RAM for Self, RAM tokenization on EOS, etc. These updates aim to enhance the flexibility, efficiency, and overall usefulness of EOS RAM.

EOS RAM Price Calculator

EOS adjusts RAM prices through a system based on RAM availability, supported by the Bancor AMM (AMM), which ensures that the RAM price is adjusted in real time with changes in the amount of EOS in RAM. The core of Bancor AMM is to maintain a balance between available RAM supply and EOS invested in it using mathematical formulas, and to influence prices based on this relationship.

EOS exSat

exSat serves as a middleware layer designed to connect the native layer of BTC with the second-layer scaling solution of the BTC ecosystem. By combining a variety of blockchain technologies, it overcomes the challenges of improving BTC scalability. EOS plays a key role in this vision, and exSat's technology stack combines BTC's PoW, BTC stake validator's PoS, and a DPoS data Consensus extension protocol supported by EOS, utilizing the advantages of EOS block space for on-chain storage.

EOS RAM plays an important role in data parsing and storage, and as RAM becomes an important tool for Web3 developers, it implements multi-layer indexing in the exSat system. Validators and synchronizers in the exSat system work together to create the trust and robustness of PoW, utilize real BTCMiner information, and verify the correctness of information through the PoS mechanism, writing data into RAM on EOS.

exSat allows users to use their BTC on scalable solutions by minting BTC, and interact with applications, Decentralized Finance, etc. In the future, exSat’s solutions will be opened to other layer 2 networks, providing index data that is open to everyone. exSat’s EVM Smart Contract will allow anyone to access UTXO data, which is another example of EOS performance and scalability, demonstrating the flexibility and potential of the EOS ecosystem.

EOS New Token Model

The EOS network has introduced a new token economic model, which represents an important change in its economic structure. The main change is from the original inflation model (with a total upper limit of 10 billion tokens) to a fixed supply of 2.1 billion EOS tokens. This change aims to create a more stable and predictable economic environment, similar to the BTC model.

The main feature of the new model is the introduction of a Halving cycle every four years, which will help regulate the influx of new Tokens in the market. This mechanism is designed to prevent inflation and ensure the stability of Token supply. The model also includes high-yield stake rewards and adjustments to the stake lock-up period to encourage long-term holding and active participation in the network.

The EOS Network Foundation (ENF) plays a key role in managing this new economic framework, allocating specific funds for various initiatives, such as distributing 350 million EOS Tokens to the RAM market to ensure Liquidity and support market rise, as well as providing structured rewards for Block producers. Additionally, strategic funding support is provided for the operations and development projects of ENF, EOS Labs, and other major stakeholders. These changes are expected to make the EOS ecosystem more robust, sustainable, and appealing to developers and users.

The goal of EOS

The EOS system is committed to better assisting the development of Decentralization applications, not only helping developers seize the market, but also providing inherent functionality for enterprises to build blockchain applications in a way similar to web applications.

At the same time, EOS is also striving to provide a decentralized blockchain that can enable extremely fast and free transactions, and support smart contracts.

In addition, EOS is also striving to become an operating system to simplify the development of DApps.

To experience the above functions, developers need to hold EOS Token and have a clear understanding of how this protocol works.

It is worth noting that EOS is not the only blockchain that attempts to solve issues such as speed, scalability, Gas fees, etc. Next, we will explore what makes EOS blockchain special and differentiates it in the cryptocurrency world.

The uniqueness of EOS

EOS is unique in that, unlike other blockchains such as ETH Workshop, which are slow, it is able to process thousands of transactions in a second, compared to several seconds for ETH Workshop to process a single transaction. Although the price of EOS is pegged to ETH Square, EOS is faster, simpler, and more efficient than ETH Square, and solves the resource constraints of DApp development with flexibility, scalability, and availability.

Doubts about EOS

Despite the uniqueness of EOS, like other blockchains, there are also doubts in the market. According to reports, instead of attracting ordinary users by creating new DApps, EOS is considering supporting Whale users.

There are still people who do not believe in its authenticity in processing millions of transactions in one second. Nevertheless, there are still a large number of users attracted by EOS.

Conclusion

With the increasing popularity and adoption of Cryptocurrency, future users will focus on comparing the speed, scalability, environmental friendliness, and price of different blockchains. Cryptocurrency enthusiasts will seek blockchains that can provide as many of these features as possible.

Developers have the same demands, and they may even need more features. It is best to have an ecosystem that allows them to create, host, manage, and effectively run their DApps.

EOS blockchain stands out from the crowd. Firstly, it is easy to use and very appealing to developers. Additionally, it is user-friendly, fast, and cost-effective. Lastly, it provides a high-speed infrastructure while also considering environmental needs.