The Ultimate Ethereum Competitor? What Is the EOS Cryptocurrency? 

Soon after Ethereum's (ETH) launch in 2015, dozens of crypto projects started popping up, promising to be a "better" version of this trendsetting blockchain. While some have become significant forces in the crypto economy, few have caused as much of a stir as the EOS Network (EOS). 

Understanding why EOS drew so much attention in the cryptocurrency space starts with knowing how it distinguishes itself from other smart contract blockchains. 

EOS Network’s history

Computer programmer Dan Larimer and entrepreneur Brendan Blumer—along with their private company, Block.one—are the leading figures behind the EOS Network. Information on EOS first surfaced in 2017 with the release of the EOS Network white paper, followed by Block.one later launching a year-long ICO sale for traders interested in adding EOS coins to their portfolios. During 2017–2018, Block.one raised more than $4.1 billion from its EOS ICO sale, making it one of the highest-grossing ICOs in crypto history. 

In June 2018, EOS officially went live and attracted third-party developers to build decentralized applications (dApps) on its protocol in fields like decentralized finance (DeFi) and blockchain gaming. In 2021, the EOS community created the nonprofit EOS Network Foundation, which took over leadership responsibilities and fundraising initiatives from Block.one. 

As part of its restructuring efforts, the EOS Network Foundation switched from the EOSIO protocol to the open-source Antelope framework and created the Antelope Coalition with former members of the EOS ecosystem. In 2022, EOS also launched the Ethereum Virtual Machine (EVM) to better integrate itself within the Ethereum ecosystem.

How does EOS work?

The EOS Network uses Dan Larmier's rendition of the Proof-of-Stake (PoS) algorithm called Delegated Proof-of-Stake (DPoS). Similar to PoS blockchains, computers (aka nodes) that validate transactions on EOS first lock (or stake) the native EOS coins onchain. However, instead of every node participating in network validation, EOS nodes vote for block producers (BPs) during each election cycle. The 21 BPs with the highest votes broadcast, verify, and publish new transactions on EOS's distributed payment ledger, which helps EOS maintain fast processing speeds and low fees.

The EOS Network also uses preprogrammed commands called "smart contracts," which allow third-party developers to create intermediary-free web-based experiences. To make it easy for developers to build on top of the EOS Network, the blockchain's developers created three subdivisions—RAM, CPU, and NET—each named after an aspect of a computer's design. 

• RAM: RAM signifies the scarce memory space in the EOS Network that developers must buy upfront to store data in their dApp. 

• CPU: Whenever the EOS blockchain executes a smart contract command, it uses up CPU, which developers gain by staking EOS coins onchain. 

• NET: Lastly, the NET portion of EOS refers to bandwidth fees programmers pay each time they submit a transaction on the EOS blockchain. Like CPU, programmers gain NET by staking some of their EOS coins. 

EOS FAQs

What is the EOS cryptocurrency? 

The EOS coin is the native cryptocurrency on the EOS Network, and it's used to secure the blockchain through staking, voting on governance proposals, and paying for fees when developing dApps. The price of EOS has a 1:1 exchange rate on the crypto market, and traders use the real-time EOS price chart to determine its latest value.   

What makes EOS different? 

EOS distinguished itself from other crypto projects with its DPoS consensus algorithm, giving it a maximum speed of 4,000 transactions per second (TPS) and low transaction costs (aka gas fees). From a user's perspective, the EOS Network is a "feeless" blockchain since only developers pay the costs to operate their dApps on the blockchain.

Does EOS work with Ethereum wallets? 

Even though EOS integrates with Ethereum through its EVM, it's on a separate blockchain. Traders who buy EOS coins on a crypto exchange must send them to compatible crypto wallets with EOS addresses.  

Disclosures

The content of this article (the “Article”) is provided for general informational purposes only. Reference to any specific strategy, technique, product, service, or entity does not constitute an endorsement or recommendation by dYdX Trading Inc., or any affiliate, agent, or representative thereof (“dYdX”). Use of strategies, techniques, products or services referenced in this Article may involve material risks, including the risk of financial losses arising from the volatility, operational loss, or nonconsensual liquidation of digital assets.  The content of this Article does not constitute, and should not be considered, construed, or relied upon as, financial advice, legal advice, tax advice, investment advice, or advice of any other nature; and the content of this Article is not an offer, solicitation or call to action to make any investment, or purchase any crypto asset, of any kind.  dYdX makes no representation, assurance or guarantee as to the accuracy, completeness, timeliness, suitability, or validity of any information in this Article or any third-party website that may be linked to it.  You are solely responsible for conducting independent research, performing due diligence, and/or seeking advice from a professional advisor prior to taking any financial, tax, legal, or investment action.

You may only use the dYdX Services in compliance with the dYdX Terms of Use available here, including the geographic restrictions therein.

Any applicable sponsorship in connection with this Article will be disclosed, and any reference to a sponsor in this Article is for disclosure purposes, or informational in nature, and in any event is not a call to action to make an investment, acquire a service or product, or purchase crypto assets.  This Article does not offer the purchase or sale of any financial instruments or related services.

By accessing this Article and taking any action in connection with the information contained in this Article, you agree that dYdX is not responsible, directly or indirectly, for any errors, omissions, or delays related to this Article, or any damage, injury, or loss incurred in connection with use of or reliance on the content of this Article, including any specific strategy, technique, product, service, or entity that may be referenced in the Article.