The EOS is dusting itself off and getting back on its feet. But how did one of the most anticipated ICOs in history turn out to be such a disappointment?
Upon launch, some saw EOS as one of the most promising first-tier cryptocurrencies in history. EOS is a smart contract platform built using open source technology developed by Block.one, a company based in the Cayman Islands. This network was launched in 2018 to challenge Ethereum as the leading platform for smart contracts. For quite some time, it was one of the most popular projects in the L1 blockchain space.
Record-breaking Initial Coin Offering
The Initial Coin Offering (ICO) in 2018 set new records. Becoming the largest crowdfunding campaign in the cryptocurrency market to date. It raised $4.1 billion in its ICO, nearly a quarter of the entire ICO boom in 2017-18.
Things started out with great promise. During the ICO boom, blockchain projects have raised billions by selling digital tokens. The industry generally felt optimistic about its ability to disrupt traditional finance, enabling decentralized applications, democratizing fundraising, and offering high returns. ESO ICO was the most exciting industry. But the euphoria will not last.
After launch, Block.one did not reinvest in the chain. The record $4 billion raised also failed to deliver the benefits many expected. Instead, the company has funneled resources into other projects outside of EOS, including social network Voice and centralized exchange Bullish. (The bullish drew a lot of liquidity from the proceeds from the EOS ICO.)
Block.one claims that it can legally do whatever it likes with the ICO proceeds. However, critics say it fails to live up to its public promises. EOS also did not meet the technical criteria. Critics panned it for its centrality, judgment, and lack of any developmental activity.
Society fights back
In August 2021, after years of failure, Yves La Rose founded the EOS Network Foundation (ENF). An organization dedicated to forcing Block.one to reinvest in the network. La Rose asserts that the company exaggerated its capabilities and knowingly deceived investors.
According to a May 2019 Bloomberg report, Block.one shareholders received returns of up to 6,567% during buybacks. So generosity can be found in some places.
“We are victims,” La Rose told Wired. “Society is reclaiming the chain for itself.”
Led by the EOS Network Foundation, the community voted to freeze the founding team’s token-granting contract in 2021 and split the open source codebase in 2022.
After EOS smashed $4 billion with its ICO, things then went wrong for the first time on BeInCrypto.