The pros and cons of EOS and a final verdict on whether Dan Larimer’s latest project can be viewed as a success.
EOS, created to solve the scalability issues found among other similar projects, has by some metrics, been a success.
But EOS has now also been joined by a gaggle of fierce competitors, somewhat losing its soul as it struggles to remain relevant.
Created by software engineer Daniel Larimer and entrepreneur Brendan Blumer, EOS is a platform that enables the easy execution of smart contracts on a decentralised system.
Unlike its major competition of Ethereum, EOS provides its users with free execution of smart contracts and extremely low transaction fees.
Bock.one, the company behind the EOSIO ecosystem and the EOS token, has expanded since the launch of the coin in 2018.
They have formed partnerships with Google cloud, FinLab, SVK Crypto, and Galaxy Digital, among other high-end investment firms.
Although it is considered a major competitor of Ethereum, it is nowhere near its equal in terms of price.
In that same vein, it has found itself amid many other competitors such as Solana and Avalanche.
EOS pros
Due to the next list of pros, a lot of experts believe EOS has what it takes to overthrow Ethereum as the second-largest cryptocurrency and number one executor of smart contracts.
1. High-end partnerships
Block.one are leaders in the corporate scene and have taken full advantage of their position.
Partnership with companies like Galaxy Digital, Google Cloud, FinLab and SVK Crypto are defining deals that set EOS apart from its competitors.
These partnerships increase the utility of the EOS token, provide priceless exposure and also improve the overall market capitalisation of the token.
2. Consistent improvements
EOS has seen a consistent volume increase every year since 2020.
It recorded a ground-breaking 164.833% trading volume increase from April 2020 to April 2021 and a 498.855% increase from May 2020 to May 2021.
This trading volume increase has led to speculation around the price reaching $6 by the end of 2021 and an upward projection of up to $17 in 2033.
3. Scalability and low transaction fees
By adopting a DPOS (Delegated Proof of Stake) algorithm, EOS has been able to increase scaling time to about 10,000 transactions per second.
Also grossly reducing transaction fees.
Its version of DPOS involves the election of 21 witnesses who serve as leaders of the system.
They are the first to receive an EOS token after it is mined and is then in charge of how it is dispersed.
The low transaction fees caused by fast scaling time is an attractive feature that could lead to a major repricing.
4. It is cheaper than the competition
Placing itself in competition against Ethereum, EOS provides a much cheaper token with a similar utility to Ethereum.
EOS, at the time of writing, is valued at an average price of $5. However, there are rumours that EOS could reach a new all-time high by the end of this year.
Its first ATH was in April 2018 where it averaged $22 for a brief period.
It has not been able to reach such a level since.
With the number of developers staking the EOS tokens to add to the already existing 5,000 Dapps built on the chain, the token looks underpriced.
These are just some of the reasons that speculators believe that better days are ahead.
5. High volatility
Where cryptocurrencies are concerned, this causes an extreme love/hate relationship.
Investing in EOS at the right time could be the best decision you ever make, however, investing close to the end of a bull run could see the tide soon turn.
The key is whether EOS can build anything meaningful that adds fundamental value to the chain, thus helping to shield it from the next overall bear market.
EOS cons
Alongside its many attractive qualities are its less attractive qualities.
Before deciding whether EOS is the right project for you to get involved in, you need to consider the following cons.
1. Centralisation
One of the major attractions to a decentralised project is token distribution.
EOS's parent company Block.one own the majority of tokens, with a large vested EOS stake still earmarked for the company.
This doesn't appeal to the type of people who prefer a decentralised project to be… you know, actually decentralised!
The majority ownership of the tokens downplays the independence of the 21 voted validators.
2. The exit of the co-founder
Dan Larimer, the co-founder and CTO, happens to be a blockchain enthusiast who believes that the majority of the tokens should be made available to the public and not owned by a single individual or company.
His departure from the team on January 10th, 2021, didn’t speak well for the future of EOS and their lack of progress since, has seen his move somewhat justified.
There is so much more to this story that the public is never going to be made aware of and what is supposed to be an open, decentralised crypto project, this just leavea a sour taste in your mouth.
3. SEC scandal
A settlement with the Securities and Exchange Commission (SEC) is never a good sign.
Especially at the start of a project.
There was a case against Block.one where they were accused by the SEC for not registering their digital assets as securities before offering them up for an Initial Coin Offering.
This accusation leads to a $24 million settlement charge.
Chump change in the grand scheme of things, but a blot on the company’s copy paper nonetheless.
Ultimately, the EOS pros outweigh the cons
At the moment, it would appear that EOS has more upside than downside as the pros outweigh the cons.
However, the future of EOS will ultimately be dependent on how much relevance they can gather through current and future partnerships.
We really need to see Block.one do more, or pass the baton to the community for a new dawn.
Best of probabilities to you.
Direct from the desk of Dane Williams.
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