EOS
ERICA
EOS is the native cryptocurrency of the EOS blockchain, developed with the aim of facilitating efficient and scalable decentralized applications also known as dapps. The blockchain includes an operating-system like set of services and functions that work similar to the Ethereum platform.
EOS was announced in 2017 by the company Block.One and was released as open-source software in June 2018. EOS seeks to achieve greater scalability than Bitcoin and Ethereum with its delegated proof-of-stake (DPoS) consensus mechanism.
According to its whitepaper, EOS is able to process transactions more quickly than other blockchains because there are only 21 block producing nodes. This means that the network must only reach consensus between 21 nodes in order to produce a block, compared to millions of nodes in the Bitcoin and Ethereum networks.
EOS has four distinctive features. First, EOS transactions are quick – it takes about half a second to confirm a transaction – and approximately 2 minutes to finalize. Second, EOS tokens are free to transfer becasue unlike many other blockchains, there are no mining fees. Third, EOS is the only token on the network that can be used to obtain resources that developers need to run their dapps – these are CPU (the processing power it takes to run a dapp), NET (network bandwidth) and RAM (data storage). Lastly, the tokens play a very important role in EOS governance – only people who hold the EOS token can vote for block producers running the network.
How does EOS work?
Launch and issuance
Block.one completed its initial coin offering (ICO) of EOS in June 2018 after taking over a full year and 350 periods of distribution (one token distribution of 2 million tokens per day). The ICO raised over $4 billion dollars over the year, with 1 billion total tokens sold. 90% of the tokens were sold to ICO participants and 10% were sold to the EOS team.
At the end of each distribution period, the total number of tokens designated for that period were given to contributors based on the amount of ETH they contributed divided by the total contribution amount. EOS tokens were initially distributed as ERC-20 tokens. They were later swapped for native EOS tokens.
Network design and security model
In order to secure its network, EOS uses a delegated proof-of-stake model (DPoS) devised by Block.One co-founder Daniel Larimer. DPoS uses real-time voting combined with a social system of reputation to achieve consensus as to who can create the next block of transactions on the blockchain.
Every EOS token holder has influence as to what happens on the network, proportional to how many tokens their account holds. The voting process has been somewhat controversial. In order to vote, users must stake tokens for three days, and those who stake their tokens cannot sell them, putting them at risk of losing money should the price of the token change during that time.
Monetary policy
There is no maximum supply limit of EOS tokens. The delegated proof-of-stake model uses inflation to fund transactions and pay block users.
There is a 5% cap in the rate of inflation that has been agreed upon – which is expected to exist forever. This means that at the end of the ICO, once the initial 1 billion tokens were issued, a maximum of 50 million new tokens would be created within the following year.
Transaction processing
According to the whitepaper, a transaction within EOS can be confirmed with 99.9% certainty after an average of 0.25 seconds from the time of the broadcast.
The EOS software requires every transaction to include part of the hash of a recent block header. This is in order to prevent a “replay” of a transaction, a long-known blockchain vulnerability. This is to also signal to the network that a particular user and their stake are on a specific fork.
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Source: coindesk.com