Seven years later, the largest financing project in history with a value of US$4.2 billion was declared a failure

EOS, which was at its peak at the beginning, changed its name to Vaulta and stopped being a public chain... Today, EOS changed its name to Vaulta.

The ancient public chain that raised funds vigorously for a whole year 7 years ago and was regarded as the earliest "Ethereum killer" finally gave up the dream of creating a million TPS and announced its shift to Web3 banking. The pride of $4.2 billion in financing, the excitement of 21 super nodes, and the utopian declaration of a million TPS - these fragments pieced together the most expensive idealistic experiment in the history of blockchain.

Seven years later, except for the old leeks, no one mentioned this "ancient public chain" that now ranks 97th in market value. In the days to come, EOS is no longer a high-performance public chain, but has changed its appearance and tried to turn to Web3 banking - it has given up its former dream and even its name.

We still use this article to record the craziest product of the ICO era, which burned so much money and left a sad story.

A Tower of Babel built with code and dollars

In 2017, the blockchain industry was in its craziest upswing. Bitcoin broke through $1,000 at the beginning of the year and soared to $20,000 at the end of the year. Ethereum's smart contracts completely changed the crypto world. ICO (initial coin offering) became the hottest financing method. Hundreds of projects flooded into the market, competing to build a "decentralized future."

And in this capital frenzy, EOS came out with the banner of "Blockchain 3.0" and held high the banner of "replacing Ethereum." Its white paper depicts an ideal country: millions of TPS (transactions per second), completely solving the scalability problems of Bitcoin and Ethereum; zero handling fees, ordinary users do not need to pay expensive gas fees, and on-chain transactions are as smooth as cloud applications; ultra-fast block generation, 21 super nodes are responsible for packaging transactions, and are no longer dragged down by miners' competition. ; Blockchain supercomputers make decentralized applications (DApp) a reality.

Founder BM (Dan Larimer) is the biggest signboard of EOS. To the technical faction, he is a genius - in the second year after the birth of Bitcoin, he suggested to Satoshi Nakamoto to change the consensus mechanism, believing that PoW (proof of work) was not efficient. Later, he founded BitShares and Steemit, and once became one of the most well-known engineers in the currency circle. But BM is not just a technical geek, he also has utopian idealism. He believes that blockchain can change everything, and EOS will be the ultimate solution to the structure of human society.

A genius CTO, coupled with a first-class marketing team, the ambition of this story is already on the table. On June 26, 2017, EOS started crowdfunding, which was planned to last for a year (in contrast, the financing cycle of most ICOs is only a few weeks to a few months).

Global investors flocked to it and raised $185 million in 24 hours. In the end, EOS successfully raised $4.2 billion, becoming the largest financing in the history of the currency circle, far exceeding all projects in the same period, including Ethereum's $18.5 million.

Top 10 ICO Projects in 2018

With $4.2 billion, EOS has become the super capital of the cryptocurrency circle.

In April 2018, the price of EOS rose from $5 to $23, a monthly increase of 360%, and its market value ranked among the top five in the world, second only to Bitcoin, Ethereum, Ripple and Bitcoin Cash. The media frantically hyped up the market, with headlines such as "EOS will become the first trillion-dollar cryptocurrency" and "BM is the next Satoshi Nakamoto". Ethereum developers also began to worry that the rise of EOS would lead to the decline of Ethereum.

This year, EOS has become the hottest star in the cryptocurrency circle before it was launched on the mainnet. Driven by the emotion of FOMO (fear of missing out), EOS is considered to be the "next generation of Ethereum", and some even predict that it will reach $1,000.

The super node election has become a global hot spot. "Godfather-level" figures such as Li Xiaolai and Lao Mao have entered the market in a high-profile manner. Exchanges, mining pools, Wenzhou capital and even traditional funds have flocked to the election - this election is called the "Wall Street IPO of blockchain". The nodes of China, the United States and South Korea have launched a "currency circle national war". The Korean community shouted "If you don't vote, you are not a Korean". Li Xiaolai's Coin Capital holds 4 node votes, and the Wenzhou gang entered the market with 8-digit EOS to sweep the market.

$4.2 billion in fundraising, star projects, dark horse public chains, thousands of attention, BM went to Hong Kong and was picked up by the project party at the airport gate in a luxury car. Everything looks so beautiful, but under the feast, everything is built on the Tower of Babel built of code and US dollars.

EOS is only at its peak at the beginning

Amid the frenzy, problems have quietly emerged:

EOS's voting system is suspected of being easily controlled by big players, and the degree of decentralization of super nodes is questioned; after the mainnet was launched, multiple technical problems occurred, and developers began to question the stability of EOS; the deep involvement of exchanges and capital giants made the supernode election no longer fair, and the community began to have different voices; after the mainnet was launched, BM began to frequently change the governance mechanism, causing chaos in the community.

But the market was still immersed in the carnival at that time, and all the doubts were covered by the slogan "EOS is about to change the world". In that golden age, everyone believed that EOS would become the future overlord, or even the final form of the blockchain industry. However, reality is often more cruel than dreams, and no one expected that this project, which was once highly expected, would fall from the altar in just a few years.

Technical disillusionment: from "millions of TPS" to "distributed database"

At that time, the biggest problem with blockchain was scalability, how to conduct more transactions in one second. The Bitcoin network can carry out 5 or 6 transactions per second, while Ethereum is better, with about 20 transactions per second. However, these are far from meeting the requirements of blockchain use.

In this case, EOS's million TPS makes everyone crazy. You know, at midnight on Tmall Double 11, the highest transaction volume per second was more than 100,000.

However, EOS main chain has been launched for 4 months, and the highest TPS is only 3996, which is far from the million advertised at the beginning.

EOS is far below expectations, but Ethereum is gradually improving its performance through Layer 2 expansion solutions, and competitors such as BNB chain and Solana are also rising rapidly, and EOS's "performance advantage" has been completely wiped out.

People found that the so-called "million TPS" was actually a carefully designed word magic - BM quietly added a premise to this number: it must rely on an infinitely scalable sidechain ecosystem. According to his idea, if a chain can process 4,000 transactions, 100 sidechains in parallel can achieve 400,000 TPS. But the reality is that until 2023, only three sidechains will be launched in the EOS ecosystem, and two of them have become "ghost chains" due to the withdrawal of developers. BM's response to this was to turn around and announce on Twitter that "anti-inflation algorithms are being studied", and at this time EOS's market value has fallen out of the top 20.

Difficult to use is the core problem of EOS.

At the beginning, EOS hit the user's pain point with free transfers. Users soon discovered that although EOS transfers do not require handling fees, tokens must be pledged to exchange for CPU resources. When the network is congested, transferring 10 EOS requires pledging CPU worth 5 EOS - this is essentially a disguised freeze of user funds. During a DApp traffic peak in 2020, 2,000 EOS could only be exchanged for 1.3 seconds of CPU time, and ordinary users needed to repeat the operation more than ten times to complete a transfer.

Moreover, BM also set a RAM supply cap, and as a result, the market hyped RAM, causing RAM prices to soar 100 times, and developers had to spend a high cost to purchase storage resources. In 2018, some speculators began to hoard RAM. In just a few months, the price of RAM soared from 0.01 EOS/KB to 0.9 EOS/KB, which seriously affected DApp development, and many new projects directly abandoned EOS.

Ultimately, this resource management model makes EOS's user experience worse than Ethereum: on Ethereum, users can directly pay gas fees to complete transactions; but on EOS, users must first learn the complex resource mortgage mechanism, and even spend a lot of money to buy CPU and RAM, which seriously hinders the development of the DApp ecosystem.

From today's perspective, it is actually difficult for us to understand that with such a poor user experience, EOS had an explosive period in late 2018 and early 2019: dapps mainly based on on-chain gambling were very popular on EOS.

Data from December 24, 2018 shows that in the past week, a comprehensive comparison of the DApp ecosystem of the three major public chains, ETH, EOS, and TRON, found that: Total number of users (people): EOS (75,346) > TRON (45,777) > ETH (33,495); Total number of transactions (tick): EOS (23,878,369) > TRON (13,803,322) > ETH (413,019); Total transaction amount (US dollars): EOS (345,489,773) > TRON (135,201,171) > ETH (44,272,856);

This shows that at that time, EOS was really expected by the community, and the ecological prosperity also surpassed ETH and TRON. Perhaps it is precisely because of this "Nan Ke dream" that today's old players in the currency circle always sigh when they recall EOS.

Governance collapse: vote-buying, centralization and community division

Of course, when we talk about governance now, it seems that we can only laugh, but at that time, EOS governance was highly expected. BM was very confident that with his careful design, 21 nodes would make this network far superior to Ethereum.

He believed that there would be 2/3 good people on this network, and everyone would behave in a good way. Nodes that did evil would be voted out by users. This was a perfect utopia. Facts have proved that he was too naive.

Three months after the EOS mainnet was launched, it has become an unspoken rule for nodes to bribe each other. In order to get the block rewards of EOS, no one can stop the mutual voting between big users and nodes. This is not the most exaggerated. The nodes themselves doing evil is absurd.

The mechanism of EOS is that 21 super nodes take turns to produce blocks. At that time, a user's money was stolen by a hacker. The solution was that 21 nodes set the hacker's address to the blacklist, so that the hacker could not transfer money. This was a normal and simple operation, but one node was not set at that time. So the hacker transferred the money away during the time when this node produced a block. Just treat it as if nothing happened.

BM tried to constrain these behaviors through the EOS Constitution, but soon found that the Constitution had no binding force: since the super nodes themselves were the beneficiaries of vote-buying, they had no motivation to enforce the rules stipulated in the Constitution. The arbitration mechanism was completely in name only and had no actual binding force.

In 2019, BM completely abandoned constitutional governance and announced that the EOS community should evolve freely and no longer interfere with the election of super nodes. By 2020, EOS's super nodes had become a gaming field for exchanges, mining pools, and capital consortiums, and the votes of ordinary coin holders were meaningless. DPoS was supposed to be a model of decentralized governance, but it turned out to be the currency version of power politics.

In terms of governance, EOS also encountered a big problem: before the launch of the EOS mainnet, BM proposed an innovative "EOS Constitution", hoping to use code + rules to constrain behavior on the network, but in just a few months, the constitution underwent multiple revisions, and the community became increasingly dissatisfied. In June 2018, the original constitution of EOS allowed super nodes to arbitrate transactions, but due to abuse of power, BM decided to amend the constitution a few weeks later to prohibit nodes from intervening in transactions. In 2019, BM suddenly proposed to abolish the constitution and use "user contract governance" instead, and the community fell into chaos, not knowing how the governance rules of EOS would evolve. This ever-changing governance model has completely made developers and investors lose trust in EOS.

In this moment of crisis, BM and Block.one (EOS's parent company) gradually shifted their attention from the EOS main chain to the EOSIO software: BM believed that "the future of blockchain lies in enterprise-level applications", so he began to promote EOSIO, allowing companies to build their own private chains instead of focusing on the optimization of the EOS public chain. The core update of the EOS main chain has almost stagnated, and many key upgrades (such as cross-chain and storage expansion) have been delayed.

As a result, the developer ecosystem of EOS has shrunk sharply: the Ethereum community is highly active, and applications such as DeFi and NFT have exploded, while the number of DApp developers on EOS has gradually decreased. By 2022, EOS developers will lose nearly 100 people per month, and some EOS browsers and wallet projects will even be closed directly.

External strangulation: mining accidents, bear market and Block.one's silence

At the end of 2019, the price of EOS fell below $5, and the next year it fell to $1.8, a plunge of more than 90% from its historical high of $23. When super nodes face a survival crisis, developer loss, and market liquidity drying up, the EOS ecosystem needs the rescue of its parent company Block.one the most.

What we all know is that Block.one raised $4.2 billion in the early days, becoming the largest financing event in the history of encryption. In theory, this money can support the long-term development of EOS, support developers, promote technological innovation, and allow the ecosystem to continue to grow. When EOS ecosystem developers begged for funding, Block.one threw out a check for $50,000 - this money was not enough to pay Silicon Valley programmers for two months.

"Where did the $4.2 billion go?" the community asked.

On March 19, 2019, BM wrote an email to Block.one shareholders, revealing part of the answer: As of February 2019, Block.one held a total of $3 billion in assets (including cash and invested funds).

Of the $3 billion, about $2.2 billion was invested in U.S. government bonds, which were also referred to as "liquid fiat assets" in the email.

Some of the investment funds can be found in public information: gaming company Forte, NFT platform Immutable, and resort hotels in Puerto Rico, U.S. In short, the companies invested have one thing in common: they have little to do with EOS.

Before Bullish became a core business, Block.one still had a trump card in hand, Voice, a social product deployed based on EOSIO smart contracts, which is also the only product with business relations with EOS. In order to build Voice, Block.one invested $150 million. In addition, the biggest expense was to buy a domain name with $30 million. The seller was MicroStrategy, the listed company with the most Bitcoin mentioned above.

But it seems to be a curse of fate. The first press conference of Voice lasted half an hour. The content was not as expected, and there were many disappointed voices, which caused the price of EOS to fall. More than half a year later, various failures and Bdangsug occurred on the day when the Voice iOS version was launched on the Apple Store. The Voice official website page showed "Error 1020" and said that the website was "using security services to protect itself from online attacks." EOS holders were completely disappointed, and Voice finally announced in September 2023 that it would be gradually closed.

Projects launched by Block.one

The thunder was loud but the rain was small, which seems to be the consistent style of Block.one's investment projects. After that, Block.one did not make any large investments and began to lie flat. Today, Block.one has 164,000 bitcoins in its account, which means that its net worth has increased fivefold from 3 billion in 2019 to 16 billion now, making it a master of liquidity management.

There is no actual support plan for DeFi, NFT, and DApp ecosystems. In contrast, the Ethereum Foundation and the Solana Foundation continue to subsidize developers and promote technological innovation, while Block.one does almost nothing.

An early investor in EOS angrily questioned on Reddit: "We invested in EOS because it promised to subvert the blockchain, not to let Block.one use the money to speculate on Bitcoin!"

Although Block.one is currently the company with the second largest number of Bitcoins after MicroStrategy, with a total of 160,000 BTC worth 16 billion US dollars. But EOS, which has not received any support from these huge funds raised, continues to go downhill.

The governance chaos of Block.one is even more shocking. Block.one is increasingly like a "family business" with CEO BB as the core, and BM is not in this family.

Sister as CMO: CEO Brendan Blumer's sister Abby parachuted into the position of chief marketing officer. Her only visible "political achievement" is to change the EOS brand color from technological blue to "softer Morandi gray".

Mother manages venture capital: Blumer's mother Nancy is in charge of the EOSVC venture capital fund. The social application Voice, which she led, has less than 10,000 users in one year of its launch, but cost $150 million.

BM's puppet show: Founder BM revealed on Twitter that he "has no decision-making power" and can only watch the team pour resources into the enterprise-level toolkit EOSIO-a project customized for giants such as Walmart, which has nothing to do with the EOS mainnet.

In 2021, the community launched a "fork uprising" in an attempt to cut off Block.one's control. EOS Foundation came forward as a community representative and started negotiations with Block.one. However, in a month, the two sides discussed various options but failed to reach an agreement. Finally, EOS Foundation, together with 17 nodes, revoked Block.one's power and kicked it out of EOS management. Without its parent company, EOS is becoming more and more like a DAO.

After EOS and Block.one separated, the EOS community sued for several years for the ownership of the funds raised at the beginning, but so far Block.one still has the ownership and right to use the funds.

What's even more ridiculous is that since 2024, BM's Twitter content has almost no longer involved blockchain, and the only technical discussion was sporadic mention of database optimization. In contrast, his focus has completely shifted to theological preaching, with the content highly concentrated on the interpretation of the Bible, the doomsday prophecy of geopolitical conflicts, and the criticism of mainstream Christianity...

BM's Twitter content

Looking back at this seven-year crypto epic, the collapse of EOS has long been full of warnings: no matter how high the TPS is, no matter how sophisticated the resource model is, if the user experience is so complicated that ordinary people are discouraged, everything is meaningless. The former "Ethereum killer" eventually died in the quagmire of its own economic model, chaotic governance, and stagnant technology.

7 years ago, EOS crowdfunding raised 4.2 billion US dollars, which was once considered the most brilliant financing miracle in the history of blockchain; 7 years later, its story has become the biggest "joke" in the currency circle.

In the end, EOS did not kill Ethereum, it killed itself first.