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EOS Crypto: A Complete Guide to What It Is and How It Works

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Updated by Ananda Banerjee
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Blockchain technology — secure, transparent, and decentralized — is revolutionizing the digital realm. Among notable coins in this space is EOS crypto. This article explores the EOS ecosystem’s scalability, feeless structure, security features, governance, and growth potential.

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Methodology: How did we select the best platforms and wallets to buy and store EOS?

What is EOS?

EOS ecosystem EOS.io EOS token EOS blockchain
The EOS ecosystem: ByteTree

EOS operates as a layer-1 blockchain built on the open-source Antelope protocol (previously known as EOSIO), which supports scalable, secure, and user-friendly blockchain applications. It addresses critical concerns like scalability, security, and decentralization. Unlike Ethereum’s rental system, EOS directly allocates computational resources to coin holders, eliminating the need for rent or gas fees.

EOS stands out in its approach to scalability, employing both vertical and horizontal scaling to offer fee-less applications for users. Block producers actively participate in maintaining the network’s infrastructure. EOS aims to create a robust platform that prioritizes user-friendly and business-friendly app development while mitigating the constraints found in other blockchain platforms like Ethereum.

History of EOS

In August 2016, the Block.one team — led by key figures Dan Larimer and Brendan Blumer — kickstarted the EOS project. Although Block.one was established in 2017, the team launched the EOS GitHub repository in April of the same year. Additionally, in June 2017, they released a technical white paper detailing the project’s vision.

EOS’s inaugural initial coin offering (ICO) started in June 2017 amid an ICO boom that saw blockchain initiatives amass billions and the allure of digital tokens skyrocket. The funding round raised a record-breaking $185 million in just five days and concluded at a record $4 billion in June 2018making EOS the most significant ICO in cryptocurrency history.

The EOSIO version 1.0 was released in 2018, and the mainnet officially went live in the same year, with token holders playing a key role in its launch. In April 2023, the EOS Network Foundation launched its EOS EVM on the mainnet, facilitating interoperability between EOS and Ethereum.

How does EOS work?

EOS is developed to facilitate the creation of scalable, user-friendly, and secure blockchain applications. It was specifically designed to overcome the constraints and difficulties encountered by developers working on applications intended for a massive user base within traditional blockchain networks.

Key aspects of EOS functionality include:

A WebAssembly C++ engine

EOS employs WebAssembly (Wasm) technology, enabling developers to create high-speed applications using popular programming languages such as C++. This allows for faster development and a more accessible learning curve for developers.

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Scalability

Blockchain scalability is a major concern due to the consensus requirement for transaction processing, leading to slow speeds. For instance, Ethereum handles only 20 transactions per second compared to Visa’s 1667. EOS addresses this by using delegated proof-of-stake (DPoS), which can manage millions of transactions per second. DPoS employs real-time voting and reputation mechanisms to select block producers, with EOS crypto holders participating. Each coin represents a vote that can be used for platform development support.

Delegated proof-of-stake (DPoS). 

In DPoS, computers on the network do not compete over computational power through mining. Instead, network users of the network vote for a set of computers called block producers, whom they believe are best qualified to run the network. Additionally, DPoS offers faster and more energy-efficient solutions compared to PoW. Here’s how DPoS works on EOS:

  • Block producers: In EOS, the 21 block producers who receive the most votes from users are delegated to run the network. These block producers are often professional teams operating enterprise-grade hardware.
  • Transaction validation: Each block producer takes turns validating transactions and producing blocks, which are subsequently verified by the other 20 block producers.
  • Reward system: The system provides EOS crypto to block producers for upholding the network’s integrity and ensuring its seamless functioning. EOSIO showcases its efficiency by producing a new block every half second, while Bitcoin takes ten minutes for each block production.
  • User oversight: Importantly, EOSIO allows users to withdraw their votes from block producers who fail to uphold their responsibilities, which can lead to the immediate replacement of an underperforming block producer.

Flexibility and security with EOS

EOS features a comprehensive permission system, enabling developers to create tailored authorization schemes for different business scenarios. Developers can safeguard specific smart contract features and distribute authority for contract functions across multiple accounts. EOS lets developers upgrade apps and allows them to fix code and add features without protocol constraints.

Governance in EOS

EOS establishes governance through a legally binding constitution that appends to transaction signatures. Additionally, the constitution binds users, encompassing jurisdiction, choice of law, and agreed-upon regulations. This framework ensures transparent governance on the EOS platform.

What makes EOS unique?

EOS ecosystem blockchain crypto web3

Unlike Ethereum’s rental system, EOS directly allocates computational resources to coin holders, eliminating the need for rent or gas fees and marking its distinctive success in the blockchain world.

Key network elements/characteristics:

  • Scalability: EOSIO is built to scale efficiently, allowing applications to process transactions with significantly lower latency compared to other blockchains. Instead of waiting minutes or hours for transaction confirmations, EOSIO transactions take just half a second.
  • Zero transaction fees: Unlike many other blockchains that charge transaction fees, EOS transactions are free. This means that users can send tokens, engage in microtransactions, or perform various actions without incurring additional costs. 
  • User-friendly: EOSIO focuses on ease of use for both developers and users. It offers free transactions for actions such as sending tokens, selling in-game items, and liking comments. These on-chain transactions are highly secure, and users can even choose short account names for themselves, making account management more straightforward.
  • Unique security features: EOSIO introduces permissioned private keys, which are keys with limited capabilities. For example, a permissioned private key can post a message but cannot send tokens, enhancing the security of the ecosystem.
  • Governance: EOS maintains governance through a legally binding constitution, establishing jurisdiction, choice of law, and mutually agreed-upon regulations. This system ensures a structured and regulated environment.
  • EVM integration: connects two prominent blockchain ecosystems, Ethereum and EOS. This mainnet replicates Ethereum’s Virtual Machine (EVM), providing developers with the capability to launch decentralized applications (DApps) coded in Solidity.

EOS (EOS)

EOS crypto is the native token of the EOS ecosystem, having transitioned from its initial launch on the Ethereum platform to the EOS network. This digital asset finds utility in various functions, including staking, governance, and facilitating economic transactions. Notably, the $EOS token does not have a supply cap, and it sees an annual inflation rate of 1% after a revision from the original 5% rate, which took effect in February 2020. EOS crypto has a circulating supply of 1.13B coins and a max supply of 0.00 EOS.

@JeremyinKansas: Twitter

Token utility

  • Value exchange: Serves as a global digital cryptocurrency, facilitating seamless value exchange within the EOS network’s diverse ecosystem of decentralized applications and smart contracts.
  • DeFi engagement: Enable users to participate in decentralized finance (DeFi) transactions, including lending, borrowing, and yield farming, fostering financial opportunities.
  • NFT marketplace: Powers the buying and selling of verified digital art through NFTs, creating a secure and efficient marketplace for creators and collectors.
  • GameFi participation: Grant access to GameFi platforms, allowing users to engage in play-to-earn gaming and various value-generating activities.
  • Governance and network resources: EOS holders enjoy governance privileges, influencing resource allocation by voting for network validators. They also use EOS to access network bandwidth and storage capacity for essential operations, such as transfers and interactions with DApps and smart contracts.
tokenomics EOS ethereum blockchain digital assets crypto

What’s the best EOS crypto wallet?

If you’re looking to store your EOS, prioritize crypto wallet security first and foremost. Hardware wallets, like Ledger and Trezor, offer maximum security with offline storage. Software wallets, available as smartphone or desktop apps, provide flexibility and can be custodial or non-custodial. Examples include Trust Wallet, Math Wallet, and Atomic Wallet. The choice of wallet depends on your needs and the level of security you require.

EOS price potential

Our EOS price prediction projects a potential value of $2.129 for EOS in 2023, rising to $3.086 in 2025 and reaching $10.04 by 2030. However, if you’re eying EOS as an investment, note that various conditional factors influence these predictions. Never consider them as absolute certainties. The future EOS price will depend on the state of the market, layer-1 competition, and further adoption of EOS.

Is it worth buying EOS crypto?

EOS offers something novel. Its fast and fee-less transactions and efficient smart contracts pave the way for the develop-friendly blockchain to seamlessly facilitate secure, rapid, and cost-effective interactions across the globe. Only buy EOS if you believe in the project. While the coin might have good long-term price potential, all crypto is a risky investment, and profits are not guaranteed, whether you choose to trade or HODL.

Frequently asked questions

What is delegated-proof-of-stake (DPoS)?

Can I stake EOS for rewards?

What does EOS crypto do?

Is EOS a good investment?

Is EOS better than Ethereum?

Is EOS an “Ethereum killer?”

Does EOS have a future?

What is the advantage of EOS?

What makes EOS unique?

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Ayotomiwa Oladotun
Ayotomiwa is a tech writer and marketer focused on blockchain, crypto, DeFi, the metaverse, and NFTs. Ayotomiwa works with a number of emerging tech startups and crypto exchange platforms, including being the content manager for BeArt LLC. Ayotomiwa holds a Bachelor of Engineering from the Federal University of Technology, Akure.
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