According to the document, EOS depreciated by 23.4 percent against the US Dollar by the end of Q3 2018. It imposed less losses on its investors compared to other top cryptocurrencies, which include Bitcoin, Litecoin, Ethereum, and Ripple. Collectively, leading cryptocurrencies underwent an average decline of 74 percent, with Qtum being the most bearish cryptocurrency with a 93.2 percent fall.
Every major crypto coin is down in 2018 with an average decline of 74%… pic.twitter.com/m0z0b7CSm2
— Charlie Bilello (@charliebilello) October 5, 2018
Cryptocurrency markets work like any other traditional market: when money goes out, the market drops, and when money comes in, the market rises.
Digital assets within this space also react to the whims of supply and demand. The latest figures explain that investors were pouring money into the EOS project throughout the year, and the majority of them remained long in their positions, expecting higher profits despite the ongoing bearish market trend.
It could be – again – due to sentiments around the EOS token. The platform that governs EOS token is a part of a new Delegated Proof-of-Stake (DPoS) blockchain protocol. Speculators believe EOS protocol will surpass Ethereum concerning scalability and security. Right now, Ethereum processes close to 15 transactions per second (TPS) against the increased demand. EOS, at the same time, does over 1,000 TPS.
But yet, there is a catch. EOS is reportedly less decentralized than its peer blockchain projects. Compared to other public ledgers, EOS applied a more centralized approach to confirm the transactions. Instead of millions of nodes, the platform selects “21 Block Producers” through a community vote. The process works like a republic, which means network-control shifts from millions to just a few.
In general, the quality of blockchain has seemingly improved under EOS. The project looks attractive to those who can tolerate less decentralization should they receive scalability in return. It could explain why the project’s native cryptocurrency underperformed the least among other top coins and investors remained long in their positions.
The Future Ahead
EOS value has faced a significant drop since September, from highs near $6.80 to lows towards $4.98 in the present. The price is now recovering in line with the rest of the crypto market, displaying correlations that ideally should not be there. The project has a lot going on to keep injecting its market with strong fundamentals. EOS mainnet launch in July was a success. They are conducting more global hackathon events to attract the blockchain developer communities. And, new decentralized application projects are likely to choose them over Ethereum for their capability of offering horizontal scalability and removing downtimes.
The likelihood of a bullish tomorrow for EOS also has nods from Mike Novogratz. The former Goldman Sachs partner said in July institutional investors will flood the market because they would see the protocol’s ability to support commercial applications.
“Critics say it’s not decentralized enough and that’s a very fair debate, back and forth, that you can participate in. I believe that there will be markets for many different blockchains. We’ll see over the next three, perhaps four to five, years which blockchains that other projects want to build on and which one’s consumers value and place their trust in.” – he stated.
The cryptocurrency could also face challenges to sustain its upside when Ethereum switches to PoS and launch Plasma, a second-layer scaling solution like Bitcoin’s Lightning Network, to solve scalability issues. Moreover, like any young blockchain protocol, EOS will have to resolve its technical matters related to security, consensus, and integrity.