by Carl Kruse
The promise of a fast, scalable, secure, democratically organized blockchain highly suitable for enterprise applications with fee-less transactions with “enough” censorship resistance was what attracted me to the promise of the EOS blockchain. Given the overall state of blockchains when EOS launched I thought it would mop up and be the ETH Killer.
The Chestahedron: Symbol of EOS. What happened?
This obviously has not happened. And for me, a disappointment. Of the original EOS propositions most are either currently failing or need reworking. There are some notable exceptions though.
FAST – there’s no doubt EOSIO is fast. Of the large blockchain projects deployed it is the fastest. That’s great.
CENSORSHIP RESISTANCE — While yet to face a test from a strong adversary, e.g., the U.S. government, there are indications EOSIO could be good enough for most projects for censorship resistance, even with a large amount of the chain’s block producers based in Asia. It might even be highly censorship resistant.
IMMUTABILITY – A bigger problem for EOS is immutability, with smart contracts capable of changing on the fly and dapp tokens distributed to users that can be skyhooked back without the consent of the token holders (see what happened to the EDNA dapp on EOS). It is now becoming clear that one of the great use cases for blockchain will be Decentralized Finance, and the lack of immutability will hurt EOSIO.
STABILITY — EOSIO is right now not stable or predictable enough for large scale applications and we must admit that the promise of stability has yet to bear fruit.
SCALABILITY – In the early days the talk was of many thousands of transactions per second and ultimately millions and here too — in the real world — EOS is currently failing. I would even say EOS is not scalable in practice. Applications with a few hundred to a few thousand users might be ok, but no application with millions of users will be ok.
FEE-LESS TRANSACTIONS – At first all looked sweet until it dawned on everyone that EOS was not cheap even if transactions were fee-less. To do anything meaningful on EOS involves hundreds of staked EOS, whether staked for by a user or paid for by a dapp. That makes real world deployment to EOS crazy expensive and will limit the deployment of high throughput dapps such as games. Note the rise of WAX and UOS to handle games on EOSIO not EOS. Unless some form of LiquidDapps comes to the rescue or innovative sister-chaining or whatnot — the real promise of fee-less transactions is in trouble on EOS. When I hear people moving operations off-chain to save resources, like the DICE app is currently doing, than I wonder why blockchain? Anyway that was not the original idea for EOS.
EASE OF USE – Not. Obtaining EOS tokens, learning to use a wallet to stake resources on the network such as CPU and NET and dealing with RAM, understanding all of it, is more complicated than need be and a barrier to mass adoption. After almost two years — which is eons for a blockchain — these issues have yet to be addressed.
GOVERNANCE – Do we need to discuss the state of EOS governance? Do we agree it is a failure from the original dream? Whether it even works well enough is debatable and there seems to be no clear solution in sight, as EOS tokens parked in crypto exchanges are voted en masse by the exchanges themselves to position themselves and their allies as Block Producers. Many (most?) of these BPs invest little in the network. And while blocks continue to be produced and the BPs do not seem to have acted in any detrimental way towards the EOS blockchain itself, this is far from the ideal once envisioned of a Democratic blockchain. By the way, where is Block One? As of this writing they were to vote their 100 million tokens soon but that has not happened and it is not clear the full amount of their votes will ever be deployed.
DEVELOPMENT – Who is deploying to EOS these days? Several projects have exited to other chains and other projects shelved. Of course Voice is coming, that social media dapp developed by Blockone, which as the creator of EOS has a vested interest in seeing EOS flourish. But what other large outside projects are deploying to EOS? Even with Voice it is unclear what role the EOS mainnet will play. Where’s Blankos? What is EOSVC doing? What of Everipidia? What big groups or companies are building on EOS?
Particularly heartbreaking was the decision of the government of the Marshall Islands to deploy their project of creating the first sovereign blockchain currency in the world to Algorand, when it looked almost certain they would deploy — and indeed had been working a long time — with EOSIO. How did this happen and where was B1?
COMMUNITY: Mike Novogratz capitulated. Multicoin Capital capitulated. Even Rob Finch, the EOS permabull, capitulated. The excitement of the original EOS launch is gone. The community is fractured. Maybe depressed? The Telegram chatrooms mostly moribund. What is a project without its community? Where is B1 in all of this? What of the future?
MARKETING – B1 has done a terrible job marketing the EOSIO platform. They have been slow, flat-footed, and long ago decided to let their lawyers drive the bus, for whatever reasons, good or ill. Controversial pronouncements by senior B1 executives, such as Dan Larimer, on everything from shower coins to anti-Vaxx theories to a pivot which argued EOS being faster and more secure than SQL databases (!) to the manner in which B1 has thrown shade at EOSIO side chains such as Telos, cast doubt as to B1 capably marketing themselves to the world at large. “LikeTerryFox” was unfortunately on to something when he directly responded to a Brendan Blummer tweet on marketing saying, “Are you kidding? To write “EOS” on the asphalt is better marketing than in the first two years.”
The only time I remember — someone will correct me here please — of anyone at B1 even commenting on any EOS dapp was Dan’s December 18, 2018 Medium article in which he threw the DICE dapp team under the bus, admonishing them to write better code and to work smarter not harder in response to CPU issues.
I guess there may have also been some indirect comments by B1 regarding the EIDOS network attack in answer to the wave of complaints that arose back then by saying EOS was working as it was supposed to work.
But that’s it. No B1 public support or cheering for EOSIO dapps. Nor B1 cheering for EOSIO chains. Does anyone find this strange? I secretly suspect B1 doesn’t really know who or what is actually deploying to EOSIO, but I might be wrong.
Look at EOS VC — that supposedly powerful investment arm whose goal was to fuel development on EOS — their actions, or better said inactions, leave much to be desired, and B1’s balance sheet betrays much of where B1’s focus lies: B1 has far more holdings in Bitcoin than in EOS itself, and far more holdings in government securities than in Bitcoin. By all appearances, B1 has become primarily an investment holding company first, and an EOSIO development company second, and when seen that way its cautious actions make more sense. Unless of course you hold hope that there is a super duper secret three-dimensional chess game B1 is playing that will eventually be revealed to the wonder of all.
EOS has worked problems out in the past and might still work out its current issues.
But the situation sure looks different than what I thought it would be. I say this honestly and as an EOS fan.
The crypto/blockchain space as I write in May 2020 is far different than even 6 months ago, let alone 1-2 years ago when a white-paper and some tweets fueled dreams. And it is developing at a vertiginous rate.
The narrative of Bitcoin as a safe-haven, uncorrelated asset is alive and well, and if there is any validity to stock-to-flow models, or even simple economics of supply-demand where we assume steady or rising demand with a diminishing supply, bitcoin is poised to do well. This is not to mention the macro and geopolitical issues of massive quantitative easing, money printing and assorted stimulus packages that stand to devalue most world currencies over time.
The tools with how people interact with crypto – from lending to derivatives to synthetics to games — have never been greater and are increasing at a rapid pace. Real world tokenization of everything from stocks to bonds to expensive cars and even to a basketball player are taking place and this type of activity will only increase.
Institutions are no longer just around the corner but are actively participating in crypto.
There is a lot more than just hype or a limited audience. And the space is almost certainly going to get more active.
If you had asked many observers even 6-8 months ago of their opinion of Ethereum they would have said it is dead or had no future. I thought so too. Today it is stronger than ever, becoming a center of DeFi. Far from destroying ETH, the “ETH killers” are struggling or yet to deploy, while massive deployment is taking place on ETH.
ETH has about 1000 active developers – four times as many as BTC, and ten times as many as EOS (assumption: EOSIO is mostly worked on by B1 and they have about 100 developers working on EOSIO).
Santander has floated millions of dollars of bonds on ETH, the first regulated stock IPO (Overfuture) is taking place in Switzerland on ETH, fancy cars are being tokenized in a compliant way backed by the government of the Seychelles on ETH, Ernst & Young is deploying Nightfall on ETH, and dozens of other major companies and banks are building on ETH, and a tsunami of blockchain startups are all trying to build bridges between their projects and ETH. That includes B1, which has offered a $200,000 bounty to anyone who builds a bridge between EOSIO and ETH.
I don’t like ETH, but there is no arguing with reality and the incredible strides it is making.
Add to this a clear roadmap that includes eWASM, sharding, staking, a move to Proof of Stake and ETH 2.0 and the ETH killers don’t have much time to lose – maybe 1-2 years. After that, I think it might be lights out for many of them. I find this interesting given that so many people — including myself — thought ETH had no future.
This is not FUD but a realistic assessment of the current panorama in smart contract development. B1 let its lawyers drive its bus and here we are. The network and Lindy effects favor ETH and will soon be insurmountable for all ETH Killers, and I am surprised to be writing this. How can this be? Shame on B1, Cardano, Tezos, et al. Especially shame on B1, which hoarded its war chest, expertise, and good vibes in community building and shame on EOS VC that did little to encourage and fund projects on EOSIO given its large warchest.
Maximalist Of Nothing
I like fundamentals, such as they are in the crypto world. What jibes with humanity? How does blockchain fit? How does crypto make the world better? I am a maximalist of nothing and suspect many projects will find niches in the big bad world. These assumptions might be wrong. Maybe one or two chains rule them all, proving some maximalists right. It’s early.
I like BTC and its narrative of providing a force field around wealth – immutable, not confiscatable, non-sovereign, permisionless, transportable, fungible, divisible, programmable…with ultimate scarcity. These concepts should prove powerful in decades to come. Large network effect and brand recognition to boot.
I also think smart contracts will play key roles in a future society and I am on the hunt for good ones. BTC Maximalists will tell you Layer 2 smart contract solutions on BTC will eliminate everything else. I don’t think so.
Regarding smart contracts, I grudgingly look at ETH because the world appears to be building on it, especially DeFi applications.
I like the technology behind EOS and B1 probably won’t let it fail easily. But this is an assumption. B1 is sitting pretty with 140,000 BTC, U.S. Treasuries, and who knows what else. If EOSIO didn’t go anywhere B1 is still fine and dandy, having made its money. That sounds bad but it’s true. Regardless of the updates and work done on EOSIO, and independent of what everyone thinks of Brendan and Dan and the team. I don’t like the way B1 deals with EOS and the overall EOSIO community, but hey, that’s me, and I still bow to Dan, B1, and its resources. I hope EOS will right itself after having righted itself before. It is continually battle tested like few other smart contract platforms and improves where it matters – in the real world. And ultimately EOS is more than B1. Let’s see what happens.
Other smart contract platforms? Cardano, Lisk, Tron, NEM, Tezos, Algorand, Kadana, Cosmos, et al. But which ones are up and running? What are they doing? Who is building? Of these I like Tezos but not enough to hold a bag. Also Cosmos. But no bag there. Some well-intentioned friends continue to hound me to look at “peer reviewed” Cardano. One visit to the Cardano telegram chat is enough to run back quickly to EOS. Hoskinson kinda makes you run also, genius that he is.
Other blockchains? So many great use cases but the only other area I focus on due to limited mental bandwith is games. I particularly like the WAX and ENJ projects. I won’t bore you with why but simply to say the obvious, that besides DeFi, gaming is a beautiful use case for blockchain.
I might be all wrong as the future continues to be written.
For a general discussion on the potential of the totality of blockchains and how they fit in with global wealth I like Kyle Samani’s article “$100 Trillion”. https://multicoin.capital/2018/10/09/100-trillion/
Anyway, beyond Bitcoin, my first foray into blockchains was EOS. And this post began as something of a lover’s lament for that blockchain. Maybe EOS will come back with renewed attention from its creator, B1. But the hour is late. And wildly useful and exciting developments are taking place elsewhere.
Will smart contracts play an important role in a future society? I believe so. What platform or platforms will rule this arena? This remains to be seen.
Contact: carl AT carlkruse DOT com
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Former blog post: http://carlkruse.at/talking-internet-culture-with-pomp-and-lorenz-notes/
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