Cardano Vs EOS: Will They Have 'Real-World' Use Cases?

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 - which develops proprietary software for businesses.’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.


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.

Current Issues

As CryptoGlobe reported in late October, EOS’ block producers had been accused of “colluding”, “receiving payoffs”, and engaging in “mutual voting.”, 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.

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Trans-Fee Mining Crypto Exchange 'FCoin' Insolvent After Mistakenly Being Too Generous

One of the first cryptocurrency exchanges to adopt the controversial trans-fee mining (TFM) model, which has been called a “disguised ICO” has paused trading and withdrawals over a shortage of crypto worth up to $130 million.

According to a statement published by FCoin’s founder Zhang Jian, a former Huobi CTO, the exchange is now unable to process withdrawals as its reserves are down by between 7,000 to 13,000 bitcoin, worth over $130 million at press time, over an issue that’s “a little too complicated to be explained in a single sentence.”

Zhang’s statement details the cryptocurrency exchange wasn’t hacked, nor is it pulling an exit scam on its users. He detailed that an internal system error gave users more mining rewards than they should have received, noting the error wasn’t detected for a long period of time.

The transaction-fee mining model, which saw FCoin’s trading volume surpass $5 billion per 24 hours numerous times, sees the cryptocurrency exchange incentivize trading via its own token, FT. FCoin reimbursed users for transaction fees paid in BTC or ETH with FTs until 51% of the coin’s supply was distributed, and redistributed 80% of the BTC and ETH it collected to those holding FT tokens.

The controversial model drew criticism and saw Zhang defend it, claiming it was a misunderstood invention. At the time, he said:

If you look back at history, all new things were not recognized at the beginning. Many were believed to be fraud. Jack Ma was recognized as a fraud when he first promoted the internet in China.

Various cryptocurrency exchanges started adopting the TFM model shortly after, with research showing these platforms had unusually thin order books and low traffic taking into account the trading volumes they had.

According to Zhang, the errors in FCoin’s system gave away too many tokens in mining rewards from mid-2018 to mid-2019, when a complete back-end auditing system was implemented. As throughout 2019 the price of FT kept on dropping, Zhang and his team reportedly used their own funds to buy back tokens and drive up demand, a decision he claims was an error.

This, as it gave users a chance to sell their FT tokens and withdraw as much as possible from their accounts, while FCoin bought up tokens that kept on losing value. Zhang’s announcement came shortly after FCoin suspended its platform over a risk-control issue.

Zhang is now reportedly manually processing users’ withdrawal requests sent via email. The founder of the exchange claimed he will “switch tracks” to start again, and noted he hopes he can use the profits made from new ventures to “compensate everyone for their losses.”

Featured image via Unsplash.