Why EOS is a Token (Why EOS Coin has Dropped So Much)

Why is EOS a token? Editor’s note: This article is from Chain Catcher (ID: iqklbs), author: Kyle, authorized repost from Odaily.

EOS is a token because it is a blockchain system. It can be used to issue, trade, and exchange digital currencies in the form of tokens. How does it work? Simply put, it operates by issuing a token for accounting and transferring value to other participants as rewards; or by holding tokens to gain certain profits. These tokens have a fixed quantity and usage, and they have unique purposes. For example, in the Bitcoin network, BTC was sold at a price of $1 and then transferred to a decentralized application for creating new block headers. This allows people to create and trade their own assets or NFTs on the Bitcoin blockchain network. Therefore, each EOS is different. But if someone says that EOS is a form of encryption, this definition is not valid because no one would hold Bitcoin responsible for this type of asset.

We all know that Bitcoin was born in 2008, and many people were paying attention to its development process. In early 2017, when I started to think about why Bitcoin needed to become the global reserve currency, Bitcoin had already emerged. That’s because Bitcoin itself has the function of storing value, and due to its economic attributes, Bitcoin has become the world’s first true legal tender currency. Now, as more and more investors realize the importance of the crypto world, Bitcoin will become even scarcer. Bitcoin not only needs to provide financial services, payment methods, and purchasing power for goods and services, but also has other functionalities, such as facilitating international trade settlement.

The current mainstream consensus algorithms, including PoW mechanism, DPoS mechanism, POS mechanism, etc., all support miners to mine more blocks, which makes it easier for more users to purchase large quantities of new tokens and various other things from the market, benefiting them. However, for those who want to make “small-scale” investments, it is a challenge, especially for investors who want to engage in long-term speculations.

In fact, “small-scale” investment is not real risk management but is based on an open environment. In this environment, you should only have your share, time weight, and voting power, and you cannot guarantee what you will get or how much you will earn.

This is a very important question: If you don’t believe anything can survive in the long run, how can you keep it and keep it existing? Maybe you can imagine a person who, even if they are intelligent, would stick to their position no matter what.

Why has EOS Coin Dropped So Much?

Editor’s note: This article is from Windmill Community (ID: FHBT18), author: Peipei, authorized repost from Odaily.

Hello everyone, I am Peipei. Recently, EOS Coin has experienced a significant drop. In June, due to many negative news in the market, many friends asked me why this thing dropped so much. I think it may be because many people don’t understand what it is really about, but still care about its value:

1. If the price of Bitcoin has been rising in the past year, it is a very scary thing for Ethereum. After all, ETH has already been mined by miners, but the demand from these miners for this coin is increasing, and they still hold a large amount of EOS and DFS. But the current situation is indeed like this. This is the saying we often hear that when the price of a token falls or experiences a sharp decline, investors will withdraw money from other altcoins, causing a liquidity crisis in the entire DeFi market. (Of course, some people are thinking about whether this can be used to cope with the impact of the market)

2. If someone thinks that EOS will collapse as easily as Bitcoin, then they may think that EOS still has some problems:

1) It itself does not have enough consensus support to go long or short, nor has it achieved the expected results. On the contrary, there is a certain proportion of support. For example, an important piece of information mentioned in an article I saw yesterday is about the decrease in locked EOS tokens. In fact, it means “issuing” according to a member of the EOS team, but in fact, his shareholding ratio is not high, so it creates a considerable space for change, such as the decrease in the number of eostoken holders and the reduction in total circulation.

2) After a 10-fold increase in EOS market capitalization within a month, there was another obvious small rebound. Currently, although the increase is not significant, it is still much stronger than the same period last year, indicating that the market still needs more chips at this time, and this momentum has not disappeared.

3. With the continuous rise of DeFi popularity, market participants are also seeking new investment opportunities. For example, the projects that went online with Dex at the beginning of this year, due to the DeFi boom, many project parties have started to deploy Dex, and some projects are even developing their own products. But they seem to be different, choosing to abandon a part of their assets in their own ecosystem.

In summary, most of the tokens currently on the market are based on Ethereum, and the most important ones are those that have been locked for a period of time or are ready to unlock new tokens, such as the liquidity pools of eosio-usdt in recent months and eosswap recently. These tokens basically have no trading demand.

4. If any currency suddenly experiences a similar phenomenon,