Whatever happened to EOS? After the biggest ICO in history, the former top 10 token now languishes around number 53. But the community has since taken back control and is determined to restore the smart contract platform to its former glory.
If you’re a newcomer to the crypto industry, you may not even be familiar with The Biggest ICO in History, which launched EOS.
EOS began in June 2018 with great fanfare, an active community and strong tech. Led by Dan Larimer, of Steemit and Bitshares fame, there was a palpable area of excitement with the introduction of new tech, including the delegated proof-of-stake (DPoS) system and EOS Worker Proposals to fund projects that grew the ecosystem.
Block.one, the company behind EOS, raised an astonishing massive $4.1 billion over 12 months.
And then… nothing much happened. The community waited and waited for the promises to be fulfilled.
“I was very disappointed when little or none of those ideas came to fruition,” Douglas Horn, CEO of Goodblock, tells Magazine. “To be honest, I would say Block.one did a deceitful ICO, whether that was planned from the beginning or not. That’s my personal assessment.”
The exact reasons EOS didn’t go anywhere are disputed, but development dried up, and the community often felt left out. Some say they volunteered to take on the development of new projects but weren’t supported — or even told to halt work by Block.one, as their efforts encroached on developments of its own. In other cases, micro-grants were given on the proviso that no other funding could be used. Typically, those micro-grants were not enough and those mini-projects also ran out of runway.
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There are some success stories, with WAX and Alien Worlds the exceptions that prove the rule, but otherwise, it was a moribund ecosystem. In the interim, Block.one came to an agreement with the SEC to pay a fine of $24 million in order to avert any suspicion that the token was a security (an agreement that has subsequently been overturned and which may cause significant new problems for Block.one).
Two white elephants
Despite the many promises, Block.one basically stopped developing the base tech, then termed EOSIO, and diverted its focus to two vanity projects: the $150 million Voice decentralized social media platform that has since transformed into an unimpressive NFT marketplace; and Bullish, an exchange that ostensibly used the ICO money to provide liquidity. Trade volumes are around $200,000 a day for its BTC/USDC pair.
(Block.one, former chief technology officer Larimer and CEO Brendan Blumer were contacted for comment.)
So in 2021, the community started fighting back with the formation of the EOS Network Foundation. Enter Yves La Rose, CEO of EOS Nation, an original block producer, into the fray. Block producers in EOS provide the tech to validate nodes, with the top 21 receiving a fee for maintaining the network.
La Rose is not without his critics, with some of those in the original Block.one brigade calling him a bully. On the other side, the newly energized EOS community sees him as a bit of a hero. And since history is written by the victors, it looks as though La Rose is going to emerge as the latter.
Who is Yves La Rose?
La Rose is a self-confessed nerd who started tinkering with his own computers when he was only six years old. Years later, he read the Bitcoin white paper and became a miner. But this didn’t last very long. He could see there was very little scope for lone miners, and he didn’t want to join a mining pool.
By 2016/2017, he could see a resurgence that offered more choices. ICOs were starting to become popular and CryptoKitties famously log-jammed the Ethereum blockchain. La Rose also became aware of Larimer and was seriously impressed with his crypto record and the new tech he was building for EOS.
“I chose EOS early on,” says La Rose. “And I made the leap into blockchain full time, forming EOS Nation back in January 2018 prior to the launch of the mainnet. And we waited.”
He was not the only block producer to find out that while ICO promises are easy, execution is hard.
‘None of those ideas came to fruition’
Horn, previously the architect of Telos, is now the CEO of Goodblock, which provides foundational Web3 tools. Like La Rose, he was attracted by the potential of the tech offered by EOS – by DPoS, the governance systems and the planned worker proposals. He, too, grew disillusioned and co-founded the Telos Blockchain in direct response to the absence of any perceptible activity by Block.one on the EOSIO code.
“In my personal opinion, I think the whole Block.one fiasco was an absolute fraud,” Horn says.
Of course, any lawyers reading this should take this as an exaggerated expression of opinion, rather than a criminal accusation, but it does show the depth of frustration that led him to draft the Telos white paper.
“Instead of waiting for them to fulfill their promises, I started to build – and I was also very outspoken in my views,” says Horn. He pushed for a roadmap from Block.one and when it was not forthcoming, he built his own for Telos.
Horn is renowned for his outspoken views but they are echoed across the community. However, some players prefer not to be named for fear of attracting blowback.
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La Rose sees the problem coming from the fact that the ICO was just too damn big and Block.one promised too much.
“There were a lot of expectations in the EOS community and I don’t think Block.one had the skills to actually fill those shoes. Then we suffered one failed promise after the other. By the second anniversary, it was obvious they were not going to deliver anything on the code or for the community,” says La Rose.
“It was then that the ecosystem started hemorrhaging developers and community members. We tried to fill the gaps but without funding it was impossible. Other chains were popping up all the time and they secured funding and, more importantly, they set up foundations.”
Rhett Oudkerk Pool, another original block producer with EOS Amsterdam and subsequently Europechain and Zaisan, also sees the massive success of the ICO as part of its downfall.
“They claimed they were tied up in legal wrangles with the SEC, and that sort of made sense. They said they were tied up in investigations and, as a result could not do anything. But then, if someone in the community wanted to create a worker proposal system, Block.one said they were already working on it. They’d say don’t worry, we’ll do it. So the community would stop but Block.one never did anything and so they doubly killed initiative,” says Oudkerk Pool.
La Rose resigned from EOS Nation to form the EOS Network Foundation (ENF) in August 2021. From the get-go, La Rose knew that all layer ones need a funded Foundation which would work to nurture the ecosystem, foster new development and oversee continued governance. Without Block.one at the helm, the ecosystem needed direction and leadership.
EOS community steps up
Daniel Keyes took over as CEO of EOS Nation after La Rose left, and he’s also CEO of the community crowdfunding platform Pomelo, which was built after the velvet EOS revolution and helps fund projects on the network.
“We had the community but no funding. We had a lot of broken hearts, and the community just left because they had to survive,” he says, looking back.
“Yves left EOS Nation to try and save the network. It was a lofty goal at that stage and there were several failed attempts,” says Keyes.
Aaron Cox, CEO of Greymass, another EOS block producer, says, “There was development happening in isolation but one of the biggest problems was this behemoth in the corner that just stamped over everyone’s efforts. We needed to stick together.”
Decentralization takes on centralization
La Rose’s road to resignation took some time. He was originally drawn to the EOS white paper and, in particular, the worker proposal system it outlined but which never launched. La Rose says he tried a number of times to launch it and would get the backing of the community before Block.one essentially killed the proposals off.
“There were veiled threats from Block.one,” says La Rose.
The second EOS conference was held in Rio in September 2020 and was a very grassroots affair. Again, La Rose and the other block producers worked hard to create a worker proposal system (WPS) and gained the backing of some 40-plus signatories. This was also canceled by Block.one.
“At this stage, we knew we could not work with Block.one again,” says La Rose. “Everything that had been promised could just be words, but GitHub did not lie.”
Marshaling the community against Block.one was difficult because of the intrinsic nature of decentralization. Momentum would be gathered but then lost as people drifted away after unsuccessful attempts to wrestle back control.
In June 2021, La Rose stepped down from EOS Nation. He’d given the past 40-odd months to EOS and he didn’t want to bow out. He also knew EOS needed a foundation, and he could not be both a block producer and a stakeholder in a foundation.
He began planning and talking to the other block producers about what they wanted and what the newly formed ENF would look like.
“At the end of the day this part was easy. Everyone knew something had to happen. Making it happen was a lot harder.”
Oudkerk Pool remembers with happiness how La Rose persuaded 15 out of the 21 block producers to join together to stop the staking contract – basically diverting revenue from Block.one back to the community. This was a watershed moment as it stopped Block.one from receiving funding from the community – and it was only possible to change the contract with the agreement of 15 block producers.
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First you get the money, then you get the power
“The initial idea was that we could use this money to work on the software. And La Rose used that money to reward struggling block producers who had been working away with no funds. He asked for blue papers to outline what would happen next and we were given the role of writing the Core+ Blue Paper, an overview document to replace the white paper – but there were seven documents altogether that covered the wallets, the yield etc,” says Oudkerk Pool.
“Our own role was to do a commercial outreach and we took an EOS roadshow all over Europe and Dubai,” says Oudkerk Pool.
Other coalitions were forming, in particular over the software. Horn was instrumental here.
“I knew we needed a roadmap and a plan. I stepped up to the plate and soon we had four block producers looking at the code – the Antelope Coalition was formed to replace the now stagnant EOSIO platform. We were now in the driving seat,” says Horn. “We had our Jerry Maguire moment where we (Telos) said we were in – and Yves said yes.”
EOS, block producer UX, WAX and Telos joined forces to run the Antelope Coalition, a new group to build and maintain the EOS source code on GitHub. The team renamed EOSIO to Antelope at this stage, forking the code permanently. A number of key technologies were identified and work began on Inter Blockchain Communication (IBC) and implementation of the Ethereum Virtual Machine (EVM), which went live mid-April.
Wax and Upland fly the flag for EOS
Not everything on EOS had stalled and a couple of well-known projects successfully built their own ecosystems.
Lukas Sliwka, chief technology officer of WAX, spent the second half of 2018 building his blockchain team, hiring the right people and then running different POCs before essentially choosing EOSIO and launching the WAX blockchain in 2019. WAX, or WorldWide Asset eXchange, is a gaming and NFT platform.
According to Sliwka, WAX is one of the most successful blockchains in the sector and, during the bull run in 2020/2021, averaged between 25 and 28 million transactions per day.
Sliwka says the project deliberately distanced itself from EOS. “WAX is probably one of the best-kept secrets in the blockchain world as a result,” he says.
“We basically took on the maintenance and protocol development ourselves – that is, until the Antelope Coalition was formed,” he says.
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“We already had our own blockchain protocol team, so we could hit the ground running. For example, as good as the Antelope stack is, there were issues on scaling – which is a key learning point from WAX,” he says.
“We saw our own blockchain grow by 50,000 to 70,000 accounts a day and that takes some serious scaling resources. I put my hand up from the start on scaling – and also inter blockchain connection.”
Upland.me, a metaverse property game following along the lines of the board game Monopoly, was also sitting on the sidelines, building its community. It actually did receive some of the funding from Block.one, in the form of the Finlab EOS VC Fund, which amounted to $18 million and allowed them to build without having to wait.
Co-founder Dirk Leuth says the coalition was exciting but there were teething troubles.
EOS independence day
La Rose sees one benefit to the delays of actually kick-starting the blockchain – that it allowed the ENF to learn from the mistakes of other layer ones, which came later. It also allowed him to try and work with EOS founder Larimer which ultimately failed.
A spokesperson for ENF said although Larimer continued to be an active member of the community through March 2022, his last contribution was when he shipped EOSIO/Mandel 3.0 at the end of January 2022.
There is some chat that Larimer was pushed out, but the mainstream conversations seem to indicate that the founder was still following the Block.one line, which was inconsistent with the new ENF policies.
As La Rose says: “Fool me once that’s on you, fool me twice and that’s on me. We opted for EOS independence. With the Antelope Coalition, we rebranded the core code stack and we now maintain, grow and develop it. We hard-forked in September 2022 and that was the final nail in the coffin for Block.one.
“That’s what we call EOS independence.”
A key component in the new EOS ecosystem is that there are formal, well-oiled mechanisms on how to access funding – either through Pomelo or the direct grant framework from ENF, which can reach up to $200,000. The EVM was launched in mid-April with a focus on gaming. A sizable tranche of funding – a $20 million fund – is allocated to this sector out of a total of $65 million.
ENV (V stands for Ventures) is the new $100 million-plus funding vehicle also set up by La Rose. It is a for-equity venture which is owned and operated by the ENF DAO.
No one denies there were many mistakes along the way. For Horn, it was the delays, which means they’re only getting up to full speed now.
Keyes is in agreement. “We are in catchup mode now. But we’re in a good position now to attract Web3 builders out there.”
The future of EOS
Cox is also optimistic. “I think the presence of our independent consensus mechanisms is the best outcome for our family of blockchains. We have this vibrant ecosystem of chains that exist today and there will be new chains dreamt up next year. We have momentum now.”
Sliwka says he’s also excited about the possibilities. “What gets me excited is the fact that we, as a coalition, are going to solve these problems so we can all benefit. That is what Yves has done – he transformed the ecosystem into something that was originally promised.
When asked about what was the most important element in the EOS revival – tech, funding or community, the community gets the biggest vote from the interviewees. Although Cox reasonably points out that the ecosystem really needs all three to be a success.
Yves la Rose has really stepped up in a David versus Goliath battle. At times he has been hampered by the vision of a truly decentralized blockchain, at other times, that has been the strength. But he pays tribute to everyone else involved.
“I may be the guy on camera for the revival but without the hundreds of people working daily on this project, it would not have happened. It’s a humbling experience to be part of this movement,” he says.
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