EOS (EOS) Q2'24 Review

EOS (EOS) is a Layer-1 blockchain that operates on a Delegated Proof-of-Stake (DPoS) consensus mechanism, built with the open-source Antelope protocol

Key Insights

EOS (EOS) is a Layer-1 blockchain that operates on a Delegated Proof-of-Stake (DPoS) consensus mechanism, built with the open-source Antelope protocol formerly known as EOSIO. The EOS Network Foundation is a non-profit organization formed from a community-driven initiative to take over the project, ensuring the protocol's continuity and revitalizing the ecosystem. This grassroots effort has led to several key upgrades, including the introduction of inter-blockchain communication (IBC), an Ethereum Virtual Machine (EVM) solution, and the successfully completed Savannah hard fork bringing transaction speed down from 6 minutes to 1 second launched on the 25th of September. For an in-depth look at EOS, please refer to our Initiation of Coverage report (IOC).

Key Metrics

EOS’s price fell in line with the rest of the market, declining 48.18% from $1.10 to $0.57 QoQ. Despite a general price recovery across the broader crypto market in Q2'24, EOS experienced a downward trajectory. This is in contrast to majors like Bitcoin, which showed signs of recovery during the same period.

The overall crypto market did see a downward trend in market capitalization during this quarter, and this broader decline has been reflected in EOS’s market performance as well. EOS’s circulating market capitalization shrank by 25% QoQ, falling from $1.2 billion to $900 million. Despite the decrease in market cap, EOS improved its position in market cap rankings, climbing from 90th in Q1’24 to 79th in Q2’24. Nonetheless, the rise in ranking shows that while EOS struggled with its price and market cap, it fared better than many other similar assets in relative terms.

EOS Token Unlocks and Staking

Source: EOS Network

Updated EOS Tokenomics Model

In Q2’24, EOS implemented a transformative shift in its tokenomics reducing the maximum total token supply from 10 billion to 2.1 billion and implementing a halving schedule to reduce the rate of inflation over time. The EOS Network Foundation (ENF) proposed the new model, which was designed to provide long-term stability and predictability for users and investors. The most prominent aspect of this change is the capping of the maximum total EOS supply at 2.1 billion tokens, significantly reducing the maximum token supply and also introducing a halving mechanism to reduce future inflation over time.

Updated EOS Staking Mechanisms

The new EOS staking mechanism introduces several important updates aimed at improving both the user experience and the network's long-term security. One of the key features is the introduction of high-yield staking rewards, where users can earn compounded returns over time by staking their EOS tokens. This is supported by a dedicated pool of 250 million EOS, which will release 31.25 million EOS annually as rewards, ensuring consistent engagement from the EOS community.

In addition to these rewards, the unstaking period has been extended from 4 to 21 days, providing greater network stability and discouraging short-term speculative behavior. This extended lock-up period helps ensure that stakers remain committed to the network for longer durations, enhancing its overall security.

EOS has also streamlined the staking process by removing the need for users to vote for 21 block producers or designate a proxy. This change simplifies the staking experience, making it more accessible to a wider range of participants. Along with these improvements, block producers now receive additional incentives in the form of network-generated fees, tied to the growing demand for the network. These incentives are layered on top of their traditional block rewards, further encouraging their active contribution to the network’s security and scalability.

Overall, the revamped staking mechanism not only offers increased returns for participants but also strengthens the network by promoting long-term participation, simplifying engagement, and ensuring adequate incentives for block producers to support the EOS ecosystem.

To date, over 150M EOS has been staked, representing 7.14% of the total locked supply. Since the new staking program was launched, over 100M has been staked in 4 months, with potential staking programs launching on centralized exchanges in the future.

Network Analysis

In Q2'24, both the daily active addresses (DAAs) and daily transactions on the EOS network saw increases QoQ. Daily transactions rose from 1.2 million to 1.6 million, representing a 33.33% increase. Similarly, the number of daily active addresses grew from 29.0K to 30.6K, reflecting a 5.52% increase.

EOS saw growth in unique active addresses during Q2’24, reaching 309,421 addresses, representing a 10.01% increase QoQ. However, engagement levels, measured by the