Since April of 2018, the market capitalization of the EOS and the Cardano platforms have dropped considerably from $4.6 billion and $4 billion to approximately $2.8 billion and $1 billion, respectively – according to CryptoCompare data.
Although the sharp decline in the prices of both EOS and Cardano’s ADA tokens may largely be attributed to the overall drop in the market cap of all cryptoassets, both projects have not met the expectations of many.
Both EOS and ADA are open-source, and aim to provide a decentralized and scalable network – in order to deploy decentralized applications (DApps) and support smart contract functionality. Cardano was launched by IOHK – which was founded by Charles Hoskinson, who was previously involved with the development of Ethereum.
Second/Third Generation Blockchains
Meanwhile, the EOS platform was launched by a company called Block.one – which develops proprietary software for businesses. Block.one’s chief technology officer is Dan Larimer, one of the most prominent members of the crypto community. Before helping to launch EOS, Larimer played a key role in designing and deploying BitShares, a decentralized cryptoasset exchange.
Larimer also assisted in creating and launching Steemit, a blockchain-based blogging and social media network (although it’s still in its beta stages). At present, both Larimer and Hoskinson are focused on solving similar problems – which is blockchain scalability.
First-generation blockchains such as Ethereum are currently handling only 15 transactions per second and its developers are struggling to scale its network. In order to really be useful and able to provide a platform for the development of enterprise-level applications, a distributed ledger technology (DLT)-based platform must be scalable.
PoS Vs DPoS
While scalability is something both EOS and Cardano aim to achieve, their respective blockchains use different types of consensus algorithms. Cardano uses a proof-of-stake (PoS) type consensus algorithm called Ouroboros – which its creators claim is “mathematically proven to be very secure.”
EOS uses a (type of) delegated-proof-of-stake (DPoS) consensus algorithm. One of the primary differences between DPoS and Ourboros is that the former has a predetermined number of miners (called delegates). In the case of EOS, there are 21 delegates that have been appointed – in order to secure its network.
Delegates are selected through a voting process, however, only EOS token holders may vote for delegates. Moreover, DPoS is a permissionless consensus algorithm – as anyone can become a delegate (block producer), provided that they meet the basic requirements.
Comparing ADA And EOS Tokens
Another difference between EOS and Cardano is they use fundamentally different types of native tokens for transaction fees on their networks. The fees for sending and receiving ADA tokens are calculated by using a simple formula:
a + b x (transaction size)
Here, a is constant = 0.155381 ADA,
and b is also a constant = 0.000043946 ADA,
and transaction size is measured in bytes.
The minimum transaction fee a user may pay is fixed at 0.155381 ADA and the TX fee increases by a small fraction (of an ADA token) – as the number of bytes to be processed in a transaction increases.
EOS uses a different fee mechanism than Cardano. On EOS, transactions are free of charge and one of the few requirements of using EOS tokens is to create an account on the platform and deposit tokens into it.
Focusing On “Interoperability” And “Sustainability”
Other than addressing the scalability issues associated with the blockchains of today, Cardano’s architects are focused on creating decentralized software systems that are “interoperable” and “sustainable.” Currently, there are over 2000 different crypto coins/tokens and Cardano’s development team believes that these tokens will need to have a platform(s) on which they can “interoperate.”
In order for blockchains to have longevity and sustainability, there needs to be a supporting and viable funding model. This is one of the main areas of focus for those who are working on the ongoing development of Cardano.
Some key areas that EOS’ development team is working on are “flexibility”, “usability”, and “governance.” When the Ethereum network was hit with a DAO attack, its entire network came to abrupt halt. According to EOS’ architects, Ethereum’s vulnerability to the attack showed that its blockchain was “inflexible” – as it resulted in a hard fork (and the Ethereum network would not be able to handle an attack of this magnitude in the future, without suffering from serious consequences).
EOS Not Susceptible To DAO Attacks?
Developers of EOS claim that its network will not be susceptible to these types of attacks as it uses the DPoS consensus protocol. If a DApp on EOS’ network becomes vulnerable, or could potentially damage other applications on its blockchain, then the elected block producers have the ability to freeze the affected DApp until it normalizes.
As mentioned, another key focus area for EOS is usability – which its developers aim to achieve by creating a toolkit for interface development, designing “self-describing interfaces”, “self-describing database scheme”, and a “declarative permission scheme.”
As defined by EOS, “governance is the process by which people reach consensus on the subjective matters that cannot be captured entirely by the software algorithms. This will help in the dispute of control and [its] resolution.”
Additionally, every EOS account is required to sign its constitution and their signed contract will only remain valid if the actually use the EOS platform.
As CryptoGlobe reported in late October, EOS’ block producers had been accused of “colluding”, “receiving payoffs”, and engaging in “mutual voting.” Block.one, the company that launched EOS, acknowledged this problem, and Ethereum co-founder Vitalik Buterin claimed that he had predicted something like this would happen. He also said that it happened sooner than he had expected.
Also as CryptoGlobe covered in mid-October, Charles Hoskinson had said that Cardano’s project management team (the Cardano Foundation) had not been executing “on many of Its core responsibilities and duties.” In general, the ongoing development of the Cardano project appears to have slowed down considerably – and it has yet to deliver on its promises.