What is EOS?

EOS holds the fundraising record for an ICO—over $4bn. The platform’s token sale ran for almost a year, from 26 June 2017 to 1 June 2018.

Expectations were buoyed by the track record of the platform’s lead developer, Dan Larimer, and the promise of revolutionary scalability. Even during development, the EOS blockchain was used by large industry projects such as Bitfinex, Bancor and Everipedia.

Ahead of the mainnet launch, the EOS token rose fourfold.

EOS was created by Block.one. The platform’s co-founder is industry veteran and blockchain visionary Dan Larimer (a co-founder of BitShares and Steemit). The code is open on GitHub. Community members may submit pull requests, but Block.one has the final say.

There are third-party developers who build ancillary products: wallets, voting tools and plugins. Often, block validators (block producers) in the EOS network do this themselves.

EOS’s developers combine existing blockchain solutions with their own technologies to create a functional DApp platform.

“We are creating a blockchain architecture, potentially scalable to millions of transactions per second, with no fees, with fast and simple implementation of decentralised applications,” — notes the EOS team in the project’s FAQ.

• no transaction fees or “gas”. Using EOS is free;
• in the whitepaper developers state that EOS can process millions of transactions per second. For comparison, Ethereum’s throughput is up to 30 transactions;
• EOS uses the DPoS (Delegated Proof-of-Stake) consensus algorithm. DPoS is praised for scalability and low energy use, but criticised for a complex governance structure and the risk of centralisation;
• the platform does not require unique programming languages—decentralised applications can be built in C++;
• the network’s governance model is a complex structure with rules set out in the Constitution. Relations between participants are governed by smart contracts, and disputes are resolved by a special arbitration body, the EOS Core Arbitration Forum (ECAF).

DPoS (Delegated Proof-of-Stake) is a consensus algorithm first developed by Dan Larimer in 2013 for his BitShares project. The protocol is also described as a form of “digital democracy”.

DPoS differs from PoS by separating network participants into block producers and voters. In other words, not all EOS holders can take part directly in block creation. To become a validator, a participant must meet two conditions:

• Have sufficient technical capacity to keep a node running 24/7 without interruption.
• Maintain an impeccable reputation and invest resources in building community support and winning users’ votes.

In PoS, the chance to validate a block depends on the number of coins staked in a wallet; in DPoS, that role is played by votes cast for a block producer by network participants.

Unlike PoS, coins used for voting are not locked in the wallet and can be freely spent. This reduces the voter’s weight in the next vote. Another difference is the absence of a mandatory minimum coin balance to vote.

Block creation in DPoS blockchains is organised into rounds. Each round works as follows:

• Coin holders vote for block producers.
• The block producers with the most votes enter a pool from which validators are chosen for the next block-production round. Each round involves 21 block producers, each creating 12 blocks.
• Validators finalise the 252 blocks produced during the round, and the process repeats.

Each new EOS block is produced by 21 validators. The queue of would-be producers is far longer.

Network participants elect block producers; the weight of each vote depends on the voter’s holdings. From the pool with the most votes, a queue is formed, and validators for the next round are selected from it.

A vote can be transferred to another validator at any time. Users may vote for several block producers at once, with equal weight. Losing user support removes a validator from contention. This political structure discourages abuses and, in Larimer’s design, is meant to make collusion and excessive centralisation impossible.

Competition among block producers resembles party politics in a digital democracy. Unlike in PoW blockchains, where political weight depends on computing power, EOS validators must grow and nurture their communities to increase their clout as competition intensifies.

Validators typically anchor themselves in regions as leading local block producers, which reduces the chance of repeating bitcoin’s centralised-mining predicament. The largest block producer in Eastern Europe is Attic Lab.

To exercise your vote, download a voting tool from the website of a block producer you trust.

This card was prepared in collaboration with the block producer Attic Lab.