In a recent post, I outlined the process I use to assess the viability of a project as an investment. This article provides an example of the practical implementation of that process with EOS as the crypto in focus. Please note, this is a subjective assessment and therefore reflects my own bias – DYOR!

Step One: Snapshot: CoinCheckup

Six-month chart:

Seven Day chart:

Price action this year has been highly impressive, higher highs and higher lows in a strong bear market. Very bullish from a long-term outlook.

Step Two: Problems Addressed – Speed / Scalability / Security / Adaptable Governance

Speed, currently 3996 max TPS, scaling very well to date though has recently plateaued at 4k. Very fast as compared to current market competitors. Source: EOS Network Monitor

Scalability: claimed near-unlimited scalability implemented within software. Unproven

Security / Stability: 21 Block Producers model with many other BP’s ready to step in. Compromise between the unrivaled security of PoW of BTC and the flexibility of the 21 validator system.

Governance: outlook positive / voter participation still small but growing. Reasonable expectation of greater voter engagement if incentives are offered to do so (pending). Some BP behavior may not align with EOS holders – could be a significant issue in time

Step Three: New? Many new or innovative ease of use elements such as human-readable addresses, no fee structure etc. Data Source

Minimum viable product – Mainnet up and running, for the most part stable, some bugs but effective response to them so far.

Step 4: Team Not entirely easy to assess.

Dan Larimer, great track record – BitShares and Steem – both incredibly successful in their own right. Currently ranked 31 and 34 respectively by CoinMarketCap.

Block producers augment EOS and bring a large number of developers to the project. Strong relative to most other projects but as of now far behind Ethereum (dated information) for the number of and arguably overall talent of developers.

Block.one private entity – recently lost a lot of senior management.

Step 5: Tokenomics – outlook excellent.

The EOS token well is integrated within the project, there are many possible avenues for appreciation. Voting incentivized staking if this eventuates will be very bullish for EOS value. Little likelihood of EOS token becoming decoupled from the success of the project itself. Frequent airdrops / airgrabs add value to simply holding EOS.

Step 6: Community – thriving and growing.

Block.one Twitter 191k / Telegram 76k / r/eos 54k plus many engaged BP communities and EOS affiliated projects. The EOS ecosystem is very active with new projects such as Trybe continuing to build EOS awareness and community.

Step 7: Current activity – very active.

Whole eco-system forming, the outcome is unknown but dApps are arriving and some such as EOSBet and EOSKnights are gaining some traction. Too early to make an informed judgement, but the potential is obvious. Block.one are releasing regular updates and many BP’s are releasing useful utilities for interacting with the blockchain such as EOSToolkit by GenerEOS and EOSAuthority’s Telegram bot. The release of Nano Ledger support is also a significant development and necessary for long-term investment.

Overall investment thesis: very strong over 3-5 year horizon. Dollar cost average in every month within $3 to $10 range. Current goal position building reassess in 12 months.

During a bull run EOS should outperform the majority of other crypto projects. Lastly, the project is exceptionally well funded with $4 billion raised during the ICO period. EOS can weather an extended bear market and still continue to expand, develop and innovate.

Reasons to be cautious (skeptical) – 4 key areas of concern

Virtually unlimited scaling – claim only at this point reassess in 12 months if no progress consider scaling down on investment.

Team: Dan is key, if he were to leave – project might stagnate Block.one management flight is a concern

Dapps still no killer app – reassess in 12 months

Governance and incentives need to be positively aligned, reassess in 6 months. If no or negative progress, scale down on investment.

And there you have it, DYOR in practice. In this case, EOS is found to be a strong buy.  Remember this is only my judgement and reflects my investment thesis which may not suit you.  As always questions, comments, and critique welcome.

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Responses

  1. Zeus69

    Great overview of EOS and the potential but I really hope the block chain is not going to be dependent only on one person, Dan Larimer, this is a potential problem dont you think, the whole knocked over by a bus scenario?
    Regards,
    Mark (Zeus69)

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  2. SugarFix

    The main reasons for me getting involved was that EOS or rather BlockOne had a 4bn warchest which means that it will survive any shakedown and consolidation. You also have to consider that if EOS is going to be a part of the future you should help shape it. I view a purely corporatist future to be a bit dystopian so it would be a good idea to gently suggest ways of preventing oligarchies forming. Knocking out discovery as the ONLY means to wealth/power seems to to me to be a priority too.

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    1. CryptosDecrypted Post author

      Agree SugarFix, that 4 billion cannot be underestimated. As far as I know, no other crypto has such an abundance of funding. This alone sets EOS apart and foolish spending aside should allow it to compete for years to come. Corporations….if you get a chance check out Truth’s last post https://trybe.one/analysis-of-past-economic-system-and-the-possibilitties-of-alt-types-of-crypto-economies-dae/, you might find it interesting.

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  3. Workin2005

    Great fundamental analysis on my second favorite cryptocurrency! I’m extremely bullish on EOS. My only fears is Dan may be ahead of his time. Many seem to not grasp the need to participate. If that continues, it will lead to just another centralized “economy”…which is exactly the opposite of what EOS was created to be. Let’s hope people come around. I’m optimistic they will. Thanks for the great work @cryptosdecrypted. Will have to wait to vote on your post…but I will.

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    1. CryptosDecrypted Post author

      Thanks, @workin2005. Yes, I really like EOS myself and agree that an ongoing (but somewhat improving) lack of voter participation is an issue. I’m guessing you might agree that EOS could end up being quite successful while failing to meet its full potential too.

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  4. Conceptskip

    Great comprehensive tutorial. What i miss a bit is how you come to a conclusion (for yourself) from the several angles of analysis.
    For the weak points id suggest reviews much earlier, at least after 3 months, crypto world is moving fast!

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    1. CryptosDecrypted Post author

      Thanks, @conceptskip. I guess, the short summary after each ‘Step’ gives an indication of my perspective in each area. For example ‘Step 6: Community – thriving and growing’. Taken as a whole that leads to a positive assessment of EOS as a long-term investment. I had intended to do only one as an example of DYOR but perhaps I might do a few more from major projects such as Cardano and Neo (if folks are interested). I tend to focus on established cryptos, hence the lag. Cheers.

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      1. Conceptskip

        Okay, apparently this consideration was lost on me… thx for clarifying. I’d definitely like to see such a review on Cardano and Neo, always found it hard to assess, for me Cardano ended up like Pro: It’s a peer-reviewes chain / Con: it’s nothing but the peer-review… certainly theres more to it, than that!

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  5. Ilia

    Thank you for such a fundamental review of EOS! The project is still very young, even by the standards of the entire history of the crypto industry. Less than a year has passed since the start of ICO and only 4 months since the transition to its own blockchain. There are a lot of true facts and strong arguments in this article. I just want to add that we need to remember how many new projects followed EOS and how many projects moved to the new blockchain. All these projects are created by very smart people who look to the future and see prospects! This gives me confidence in a bullish scenario for EOS. Great work friend!

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  6. bleujay

    Thank you for posting this well written and comprehensive review @cryptosdecrypted. Have a couple of queries for you….if one’s EOS tokens are on an exchange and are being moved to a wallet soon…….Which wallet would you recommend? and ….Are there any wallets that would be better for airedrops over another? …another query ……Will any consider past airedrops or is now too late? For example Telos?

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    1. CryptosDecrypted Post author

      Thanks, Bluejay. I store my EOS keys on a Nano Ledger S. That’s the safest option. I also use Meet.One’s mobile wallet but I’ve only added the keys to an account with Staked tokens such as Karma. Lynx mobile wallet appears to be good. Peter S wrote a comprehensive overview of ALynx here https://trybe.one/eos-lynx-a-very-well-designed-wallet/
      Remember wallet are just interfaces with the blockchain and actually store the assets at all. If you are wary perhaps create another account and use that for a wallet. You can use https://eostracker.io to keep track of airdrops. There you will see all your airdrops. Telos is still pending. They took a snapshot at EOS Genesis.

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  7. Littleboy

    Sweet review. Also, you might consider talking a little about immutability. Dan appears to be against it. Immutability provides security but makes it impossible to update contracts. Mutability gives full control of the contract to the dev.

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