Why did Tron (TRX) and EOS (EOS) Leave Ethereum's (ETH) Protocol?
Jun 27, 2018
Since Ethereum was created on July 30th, 2015 there has been explosive growth in the cryptocurrency space. As some of you may know, Ethereum’s blockchain was created to facilitate the development of blockchain applications. Instead of having to build a new blockchain for each unique cryptocurrency protocol, Ethereum has enabled the development of numerous blockchain applications with its protocol. The Ethereum platform ERC20 enables cryptocurrency projects to create their own smart contracts for use on the blockchain via token creation. This platform utilizes solely Ethereum’s programming language, Solidity. The contracts are coded anonymously onto the blockchain and are permanent.
To summarize, Ethereum is an infrastructure for cryptocurrency projects to create their own tokens and smart contracts which fuels their growth. So why are cryptocurrencies like Tron and EOS leaving?
What is Tron and why did it Leave?
Tron is a peer-to-peer (P2P) blockchain protocol with the intention of creating a global platform for entertainment and content-sharing that would bypass the middlemen like Facebook and Apple. Tron’s protocol allows free publishing and storing of data for individuals on its platform, who would control their own information. These individual content publishers are paid directly using Tron’s tokens, Tronix (TRX). Tron’s protocol intends to create a truly decentralized internet, with the whole ecosystem based on decentralized applications (dApps).
June 25th marked Tron’s independence from Ethereum’s ERC20 smart contract platform. By leaving the ERC20 platform, Tron is now able to allow smart contract developers to use more than one programming language on its blockchain. Tron’s mainnet also claims to be able to handle more transactions-per-second than Ethereum’s. Additionally, Ethereum is not truly decentralized. The protocol is powered by the Ethereum Foundation.
Tron’s mission has been to provide a truly decentralized internet and, so, its migration was seemingly inevitable. Another very important reason Tron left Ethereum’s blockchain was because of the often-cited poor user interface and inefficiencies of ERC20. In a CoinDesk interview, Tron founder Justin Sun said that he wants to focus more on the user experience. Sun explained that “Ethereum is like IBM back in the day, making those big supercomputers. And I’m not saying that Ethereum does not have robust technology, but I’m saying that Ethereum is just like IBM. They only focus on tech, they don’t focus on the user experience.”
Tron is currently the tenth largest cryptocurrency by market capitalization - valued at ~USD$2.6bn. Its price has followed the general market since it has been transitioning onto its own platform. While its “Independence Day” was June 25th, Tron has not yet completed the full migration of tokens from Ethereum’s platform to its own. Although Tron’s mainnet did successfully launch, the token migration and the necessary vote to elect 27 block validators has not yet concluded. This will most likely happen within the next week.
The token migration process’ current update is the following: TRX held on exchanges will be transferred over to the Mainnet TRX. For TRX held in wallets, the pre-existing tokens would need to have been deposited in to an exchange by now. Holders of TRX that did not deposit their TRX to an exchange must visit Tron’s token-exchange counter to acquire Mainnet TRX.
EOS can be described as an operating system/platform for decentralized blockchain applications. It is functionally very similar to Ethereum in that it offers infrastructure to support other cryptocurrency protocols.
It is reported that EOS likely left the ERC20 platform because of the difficulty that their users were having interacting with Ethereum’s blockchain. Additionally, because EOS does not want users to pay for every transaction – EOS’ platform has zero transaction fees. EOS also distinguishes itself from Ethereum by stating that it can process more transactions per second.
The China Electronic Information Industry Development (CCID) Blockchain Research Institute, a research group looking to provide an independent blockchain rating system, has dubbed EOS as the #1 best blockchain network. Nonetheless, EOS has received a lot of criticism lately after hitting a high of USD$23. Two days before its mainnet launch in the beginning of June, a Chinese company, Infosec, announced that they had discovered several bugs in the EOS software, and as of June 26th, EOS is only trading at USD$7.73. EOS addressed this report by responding that they had fixed most of the vulnerabilities and had set up a bounty-system for anyone who finds and reports bugs. While this eased concerns, it didn’t completely erase them. Another issue individuals have with EOS is its method of governance and decentralization. EOS claims to be decentralized, yet its software development company Block.One holds 10% of the EOS tokens. Also, just ten addresses hold about half of all the tokens on its network. This might not become a problem – however, EOS’s Delegated Proof-of-Stake (DPoS) consensus system only consists of 21 block producers. This provides only them the right to validate new incoming blocks. The amount of voting power users have on the network is directly proportional to the number of tokens held.
Summary and Next Steps:
The cryptocurrency and blockchain space are still new and experiencing rapid change. Ethereum’s protocol has been revolutionary for the cryptocurrency space – leading to the development of many other protocols. However, the protocol has not been the perfect fit for some of its users which has led to launches of the new mainnets by Tron and EOS. It seems that the departure of cryptocurrencies, Tron and EOS, can be pinned down to the respective protocols wanting to have control of their own platform, increase transaction speed, and increase flexibility for their developers. The Tron and EOS protocols have picked up extra attention in the cryptocurrency media over the past month as the two protocols have had bumpy transitions onto their own mainnet. This can be expected when such complex transitions take place. These two notable transitions may begin setting a trend for protocols that launched using Ethereum’s infrastructure and could encourage future developments to launch their own blockchain at inception.