The EOS network is currently operating with the sole purpose of distributing a new digital coin, EIDOS. The coin, widely traded on exchanges already, offers a chance for generating almost guaranteed income from its sale.
EOS Network Runs on Borrowed Resources
The EOS network ground to a halt from November 1 to November 8. Now, activity has recovered, but research by crypto exchange Coinbase reveals that the bulk of activity is based on lending resources. Most transactions are still supporting the EIDOS simulated mining and airdrop, while only large accounts with a lot of EOS at stake are capable of buying CPU resources to run their distributed apps.
“Currently, we’re observing around 95% of all EOS transfer actions are related to the EIDOS contract. Because each transfer counts towards the amount of CPU used in a block, this spike in transfer actions caused the EOS network to enter congestion mode,” stated the Coinbase team.
Essentially, the EOS network is being used as a free money printer. Prior to October 31, several actors bought up network resources – CPU, RAM, and NET. The CPU usage price spiked by 10,000% right after the EIDOS airdrop started. The spike itself may have happened because of speculation on network resources.
Thus, large-scale resource owners could pay to acquire EIDOS, then sell it on an exchange for USDT. EIDOS’s market price is showing extreme volatility, dropping from around $0.056 right after the start of the scheme, to $0.021, due to the constant selling pressure. The EOS token price has remained relatively unchanged at around $3.55.
EIDOS has also grown its presence on exchanges, reaching a listing on Bithumb Global. The EIDOS mania has been spreading through WeChat, as EOS services started offering EIDOS to their clients.
Enumivo Project Defended Airdrop as ‘Price Discovery’ Mechanism
The Enumivo project, the predecessor to EIDOS, came out with a rather dramatic rationale for the airdrop. The organizers even encouraged dumping the asset, to cause the price to drop to a level that balances the airdrop.
The EIDOS airdrop is designed to be fair and long to get more participants and at the same time help with price discovery.
To the toxic EOS telegram groups, if you really hate us, it's time to put your money where your mouth is, you'll be incentivised to destroy us….
— Enumivo (@enumivo) November 10, 2019
The airdrop organizers even present the airdrop as a use case for EOS and encourage the users to send coins to the smart contract and receive EIDOS in return, as well as their EOS back.
For the airdrop, the early adopters and those with resources gained access to more EIDOS, thus making the project look like a Ponzi scheme, where an exchange token is being sold to create demand for mining.
Many people believe EIDOS mining is ponzi – as no real utility of EIDOS token is defined. And neither have your team given any explanation of project beyond the airdrop. It sure is a ponzi by definition as it is simply using exchange token selling to create demand for mining.
— Investing With a Difference (@crypto_iwad) November 10, 2019
The opinions on the airdrop are split, with EOS proponents heavily critical of the prospect of only using EOS for a ‘get rich quick’ scheme. Others have grabbed the opportunity to turn the network into a direct source of income. The EIDOS mining process has been automated, thus making it easier to spread the scheme to more users.
What do you think about the EIDOS airdrop? Share your thoughts in the comments section below!
Images via Shutterstock, Twitter: @enumivo, @crypto_iwad
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