In a wide-open subject of crypto contenders, the place does EOS (CCC:EOS-USD) stand? The native token of the EOS.IO blockchain, to this point it hasn’t change into as large as among the trending altcoins not named Ethereum (CCC:ETH-USD).
With whales like Mike Novogratz and Peter Thiel backing its developer, Block.one, it’s comprehensible why some traders have change into enthusiastic about this extra obscure crypto’s prospects. Its token worth surged final month, as information broke of Block.one launching its Bullish World crypto alternate later this 12 months.
But, this run-up in enthusiasm shortly pale. Coupled with the “crypto meltdown” final month, costs have fallen again from highs above $14, to round $5.10 in the present day. So, what’s it going to take to maneuver the needle as soon as once more? Probably, one thing higher than this oblique catalyst.
It has many benefits over the cash/tokens extra utilized in DeFi (decentralized finance), but it surely nonetheless must differentiate itself from the remainder of the pack. In any other case, it may find yourself getting misplaced within the crowd.
EOS Wants Extra Than Simply Billionaire Backing
Novogratz and Thiel aren’t the one acquainted names concerned with this crypto’s developer. As InvestorPlace’s Ian Bezek mentioned on June 2, hedge fund billionaires Louis Bacon and Alan Howard have invested in Block.one as properly.
It is a distinctive characteristic of the EOS narrative. To make certain, this isn’t the one blockchain venture the so-called sensible cash have taken a liking to. Different cryptos have Wall Road and Silicon Valley heavyweights backing behind them as properly. However, few have corresponding to concentrated involvement from the funding and tech areas as this token’s developer. But, this comparatively larger quantity of enterprise institution backing doesn’t by itself make the bull case right here.
Billionaire backing could present some social proof. However, it’s going to wish greater than this to considerably rise in worth over time. What does it want? Important mass. Given its options, it has a shot of gaining extra widespread utilization. In different phrases, it has the potential to change into an “Ethereum killer.”
The issue? Rival altcoins have lots of the similar benefits. That is what offers them a shot at taking a shot at DeFi chief Ethereum. These benefits? These embody higher scalability, quicker transaction occasions and decrease charges. Not solely that, the main DeFi blockchain’s upgrades are simply across the nook. Each elements could make it powerful for EOS to develop its person base.
It Might Fail To Develop into an ‘Ethereum Killer’
EOS could have a smaller market capitalization ($4.8 billion) than lots of the different names taking on Ethereum’s DeFi dominance. However, as I discussed above, this blockchain has its fair proportion of “Ethereum killer” bona fides.
To start with, this platform was constructed particularly for the internet hosting of commercial-scale dApps, or decentralized functions. One other is that EOS.IO gives quicker transaction speeds and doesn’t have transaction fees. Add in its higher scalability, and also you’re in all probability questioning why this platform hasn’t caught on, given its clear-cut benefits to the established DeFi platform.
It might have constructed a greater mousetrap. However, that doesn’t imply it’s set to change into the last word ETH killer. Different names vying for that moniker have lots of the similar benefits. Cardano (CCC:ADA-USD) is moving ahead with upgrades that might additional make it a greater model of Ethereum. Solana (CCC:SOL-USD) is coming near having transaction velocity on par with legacy payment systems, which may give it an edge.
But, what’s the most important problem to EOS changing into an Ethereum killer? The favored blockchain itself could handle to remain forward of the pack that’s gaining on it. The upcoming Ethereum 2.0 upgrades could also be sufficient to maintain these rivals at bay. With the competitors heating up, and little to distinguish itself from the remainder, this platform, and its native token, could have a troublesome time rising above their present also-ran standing.
Nonetheless Not a Stand-Out From the Crowd
The EOS.IO platform could have billionaire backing on its facet. Its blockchain could have many benefits over the present prime canine within the house, Ethereum, as properly. However, whereas it’s not missing by way of scalability, velocity and transaction charges, this fails to distinguish itself from the remainder of the group.
Add in that Ethereum’s 2.0 upgrades may assist it keep its lead, and it’s onerous to be assured that it’ll find yourself breaking out in worth within the near-future. If extra developments, like additional platform upgrades, or information such because the Bullish World alternate information that despatched it hovering briefly final month, play out, we might even see one other pop in costs.
Till we see extra progress with EOS, nonetheless, it could be finest to carry off on this token, and focus extra on the remainder of the pack.
On the date of publication, Thomas Niel held an extended place in Ethereum. He didn’t have (both immediately or not directly) any positions in every other securities talked about on this article. The opinions expressed on this article are these of the author, topic to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock evaluation for web-based publications since 2016.