What Is EOS?
EOS claims to be an infrastructure for decentralised applications.
The system is designed for the deployment of industrial-scale DApps through a DAO (Decentralised Autonomous Organisation) structure. EOS claims that its operating structure will eliminate the concept of transaction fees, and will scale to millions of transactions per second.
The EOS Team
EOS is backed by the blockchain company Block.one. Their executive team is as follows:
Brendan Blumer - Cofounder and CEO. Previously founded okay.com, a data sharing platform for the Asian real estate market. Also founded Gamecliff, a market for video game items.
Rob Jesudason - Director. Former CEO of CBA Australia. Former Head of Global Emerging Markets at Credit Suisse. Previous positions at JP Morgan, Barclays, GE Capital. BSc (Hons) from Aston University.
Dan Larimer - CTO. Founder of Bitshares and Steemit. Recognised as one of the leading experts in blockchain tech, and is credited with inventing the DPoS protocol.
Andrew Bliss - CFO. Former financial analyst at Rockwell Collins. MBA from University of Iowa.
Sheel Kohli - Chief Marketing Officer. Formerly Head of Communications at Credit Suisse and ING.
Full executive listing on their Team page. No information can be found on their programming/engineering team.
The EOS Product
EOS has a goal to make blockchain usage mainstream, and outlines several key factors in its whitepaper that are required to meet that goal. They are:
- Ability to support millions of users.
- Free usage.
- Easy upgrades and bug recovery.
- Low latency.
- Fast sequential performance.
- Fast parallel performance.
Delegated Proof of Stake (DPoS)
Delegated Proof of Stake is one of the aspects EOS believes will improve latency and transaction times. The concept is credited to Dan Larimer and variants of it are now used by several blockchain platforms, such as ARK, Vechain and TRON.
DPoS works by giving token holders voting power, which they can then use to delegate block producers. Anyone can become a block producer provided they can secure enough votes.
The block time on EOS is 0.5 seconds. Exactly one producer is authorised to produce a block at any given time. Under the EOS protocol, blocks are produced in batches of 126 (6 rounds, 21 producers). The 21 block producers are selected at the start of each round. If a producer misses all of his or her scheduled blocks within 24 hours, they are removed as a producer.
Block rewards are not fixed and are voted on by block producers, essentially allowing them to set their own pay. However the maximum inflation rate is 5%. If block producers select a reward that users deem inequitable, they can simply vote in new block producers for the next round.
Transation as Proof of Stake (TaPoS)
On EOS every transaction is required to include part of the block hash in the block header. Over time, this will result in all users directly confirming the blockchain which makes it difficult to counterfeit chains.
EOS aims to provide free usage for app users by moving that cost to developers. All new accounts require a reserved amount of RAM, which can be paid for with staked tokens. It is expected that application developers will pay the cost of signing up new users. The EOS team theorises that customer acquisition is costly in regular business and that the token cost of setting up a new account should be negligible in comparison.
Often a user doesn't know a private key has been stolen until it has been used. EOS implements time based security measures to counter this. The EOS platform enables app developers to implement a delay before an action included in a block. During this delay the action can be cancelled. Users can also elect to be notified via email or text message when an action has been broadcast. If they did not authorize it, then they can use the account recovery process to recover their account.
Obviously the delay is a relative to importance. Paying for a Starbucks coffee might have no delay, while buying a car may require 48 hours or more. Transacting an account's full balance may take up to 30 days. It is up to the user or developer to decide.
Users can delegate an account recovery partner. Any account owner can use any account recovery key that was active in the last 30 days to start the recovery process. This differs from multi-sig accounts, as the second signatory is only involved in the account recovery process and nothing more.
Parallel execution is central to the scaling solution of EOS.
Traditionally, blockchains can only process transactions sequentially (one at a time).
EOS plans to implement a feature on its blockchain that allows transactions to be executed in parallel. Block producers will be tasked with organising actions into various shards. This allows actions to be processed in parallel, which in theory should allow for extremely high levels of scalability.
EOS has a very simple system for allocating bandwidth and maximising scalability. Bandwidth is simply distributed in line with token allocations.
If a user owns 5% of all EOS tokens, they are allowed 5% of the network bandwidth. In this case, any DApp that developer produces will be allowed 5% of bandwidth and can simply purchase more tokens if they require more.
Block producers are also required to publish available bandwidth, to ensure only high capacity parties are assigned to block production. Token holders can also rent out bandwidth to other users.
EOS aims to run a democratic system that gives power to the token holders.
Block producers are given limited ability to freeze accounts, update defective applications and propose hard forks. However, it is the token holders who use their stake to vote in the block producers.
One type of authority given to block producers is the ability to freeze accounts. The intended use of this power is when a smart contract doesn't perform as intended, or an exploit is found in the system. Because block producers can select which transactions to include in the block, they can freeze accounts. An account freeze is formalised in the EOS protocol and requires a 15/21 vote. EOS claims that users can simply vote out the block producers and unfreeze the account if this power is abused.
The EOS software also allows for the changing or replacing an account's code without hard forking the chain. This also requires a 15/21 vote.
EOS has a constitution. This includes rules that "cannot be enforced by code". Every transaction broadcast to the EOS network requires a hash of the constitution, acting as a signature.
The Constitution can be changed by the block producers. A 15/21 approval ratio is required, and must be maintained for 30 days. Once the source code is changed to account for the updated Constitution, the 15/21 approval must be maintained for a further 30 days. 7 days later the change becomes permanent and all non-complying nodes are removed from the network.
EOS Virtual Machine
Development on EOS is versatile. Any language or virtual machine that is deterministic and properly sandboxed with sufficient performance can be integrated with the EOS.IO software API. The main language being used currently is C++. Many consider this one of the strengths of EOS when it comes to achieving widespread adoption.
the eos Token (metrics and utility)
EOS had the longest and most lucrative ICO in history, raising $4.1 billion over a period of one year. 1 billion EOS tokens were issued.
The allocation was as follows:
- 20% during initial 5 day public sale.
- 70% during following 350 days (2 million per day).
- 10% retained by Block.one.
The inflation rate is capped at 5% and is decided by block producers.
The EOS token is required for staking.
Staking gives you access to bandwidth on the EOS network. For example, if you hold 5% of the supply you are entitled to 5% of the bandwidth. Users can also rent out any unwanted bandwidth.
The EOS token also gives you voting power for block producers, essentially determining your say in the governance of the network.
The eos Community
The EOS ecosystem is supported by EOS VC, a venture capital organisation that specifically supports EOS based ventures. EOS Global is a project with EOS VC, which is a $200m fund for supporting EOS developers and projects. EOS VC is also partnered with Galaxy DIgital Assets, Fin Lab and SVK Crypto.
EOS maintains a regularly updated blog on Medium.
B Money Verdict:
EOS looks promising from a tech standpoint, especially with someone like Dan Larimer behind it, who has already built two very successful blockchain projects, Steemit being one of the standouts in the industry.
Having implemented DPoS from the very beginning (or technically, having invented it) gives it a huge head start on Ethereum, which is still currently trying to manage a position to a proof of stake consensus protocol.
DApp development on EOS is also ahead of Ethereum, possibly because of lower on chain development costs (no transaction fees) as well as the ability to build in most languages.
I also like the team behind Block.one and think they have great credentials.
As for the bad stuff, I think EOS relies too much on human discretion. I think one of the key values of blockchain was that it removed human "decision making" from activities on chain, instead relying on code and mathematics. While some degree of intervention and centralisation is understandable, EOS seems to give more power to block producers than most.
The ability to freeze accounts, reverse transactions and the very idea of a Constitution points to future problems down the line in my opinion. Power corrupts, that was one of the key drivers of decentralisation in the first place. If we've learned from history, democracy doesn't work so amazingly either. I don't think it could be a stretch that some very "wealthy" accounts start becoming the subject of political driven actions on EOS in the future.
The Good Stuff
- Strong DApp development environment
- Great team
- Best funded project in history
- Solid tech
The Bad Stuff
- Too much human interference allowed (definitely not immutable)
No idea who is writing the code, but executive team is solid. Dan Larimer is a huge asset.
Great progress on roadmap. DApp development strong. Ability to code in all languages a big plus. Scalability solution works in theory. Governance model could be problematic in future.
Fixed inflation rate of 5% (a little high). 90% distributed to investors. Utility for token is high and straightforward.
Active and reasonably large. EOS VC is a nice addition.
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