Why did eos plummet (why did eos crash)?

Why did eos plummet? Editor’s note: This article is from Beehive Finance News (ID: fengchao-caijing), author: JXkin, authorized republished by Odaily.

With the sharp decline in the price of eos, many eos holders are dissatisfied with the trading activities on exchange platforms. According to Coinmarketcap data, three exchanges have already launched their own exchange tokens, including OKEX, Huobi, and Bittrex. However, these tokens are based on the Ethereum blockchain, so many users do not understand how the Ethereum blockchain works or how to participate in the ecosystem.

So why did this phenomenon occur? The reason is simple – due to the emergence of a large number of new applications on the Ethereum network, people’s interest in various applications has been increasing. However, in the past few months, due to the emergence of various new projects, the price of Ethereum has dropped significantly, and this trend has lasted a long time, making it difficult to avoid the occurrence of “black swan” events that have always existed. However, precisely because of this, “black swan events frequently occur” and “mining rewards decrease,” many investors believe that Bitcoin will become the core driving force of the next bull market. Therefore, when the price of Ethereum reaches a new high again, some users start to complain, saying, “This is not real.” But the current situation is not entirely different. From a technical standpoint, the current Ethereum network is still in the testnet stage and is developing a new protocol called “contract regenesis”. This new protocol will allow developers to achieve faster, cheaper, and better experiences, and also enable development teams to operate their products and services more efficiently. The release of the “contract regenesis” not only brings more confidence to the community but also attracts more people to invest, which further accelerates the progress of Ethereum 2.0 and promotes an important development period for Ethereum’s transition from Proof of Work to Proof of Stake.

In addition, there is another issue worth paying attention to:

First of all, it is clear that Ethereum 2.0 still faces many obstacles; without sufficient data support, it may not be able to smoothly pass the activation process after the mainnet goes online. Moreover, before the official launch, developers may not have enough time to solve these problems and may choose to continue to address them after the mainnet goes online. Secondly, the Ethereum Foundation has previously announced a plan to launch a series of shardings within the next two years. This plan is expected to be completed by the end of 2020. According to the whitepaper, this goal is expected to be achieved later this year; although there is currently no precise information about the specific implementation timeline, it is expected to peak around January 2021.

Lastly, let’s mention:

Why did eos crash?

Editor’s note: This article is from Caiyun Blockchain (ID: cybtc_com), authorized republished by Odaily.

Eos went online on June 18th and plummeted nearly 40% within a month, from a low of $0.014 to a high of $0.052.

According to the article released by EOS official, the EOS mainnet has entered the “test network” stage and developers are preparing for the future launch of the mainnet. However, due to technical issues, the decline in eos price is much greater than that of mainstream cryptocurrencies such as Bitcoin. With the recent rise of DeFi and the development of public chain ecology, “Ethereum 2.0” and “Smart Contract 3.0” are widely regarded as one of the hottest technologies in the second half of this year.

According to CoinMarketCap data, as of 3:30 pm on May 20th, eos was priced at $0.0002 per unit, ranking 7th in market capitalization. In the past 24 hours, its price has soared by 960%, currently reporting around $0.0466 per unit, with a trading volume of approximately $2.7 billion.

Why is the price of eos so low? This is because the eos project party previously stated that it would implement voting governance, allowing users to decide whether to support the project’s proposals. However, in reality, this proposal is just a statement – anyone can participate and contribute to the project through voting. This means that anyone can choose the work they support or sponsor through voting, such as staking to nodes or delegating to miners, and so on. If this can ensure that the entire system does not have security issues, it may even affect the interests of community members. So how should ordinary investors view this mechanism? First, it is important to understand that it is an incentive mechanism that encourages those who want rewards to join and become a part of better eos ecosystem builders. Secondly, it is decentralized, and this protocol itself is not controlled by any organization, so it cannot be used like many traditional financial institutions do with their power. Finally, we know that Ethereum is an open platform and the first smart contract platform that provides similar internet services.

But now its token economic model does not seem to be given enough attention because there are currently a large number of illiquid tokens in the market, which often cannot be combined with other applications, such as games, borrowing, and insurance services that use Eos standard codes. Therefore, it is not a completely decentralized product. In fact, it does not rely on any third party and does not have the support of any exchange. So when you see that some exchanges have issued tokens based on EOS, it will have an unnecessary impact.