EOS’s Gloom: Real Users Account for 30% and 8 Million Yuan Lost to Hackers in Last Six Months
EOS, the world’s eighth largest coin by market cap, has been down by over 50 percent over the past week amid global bearish sentiments. The token’s sharp price drop correlates with an increasing number of phantom accounts and hacking incidents hitting the blockchain which is commonly touted as the “ Ethereum Killer”.
EOS was launched in June 2018 as a public blockchain for the development, hosting and execution of decentralized applications or DApps. It is an undeniable fact that EOS has been an attractive destination for blockchain startups that are planning to launch their DAapps and seen very high level of network activity despite the fall in the price of the digital currency.
Nearly 200 DApps went live on the EOS blockchain over the past 5 months with more than 500,000 users, and its daily trading volume once hit as high as 100 million yuan (about$14.51 million), according to China’s blockchain media platform Blockchain Truth. But gambling has had the most DApps among every available category.
As the hype of Ethereum-based gambling game FOMO3D dwindles, EOS DApps registered a trading volume of 7.05 million yuan on August 25, beating Ethereuam which saw a 2.55 million yuan worth of trading volume on the same day for the first time. In less than half a year after the mainnet went live, the daily activity on EOS is nearly 9 times that of Ethereum, and the its peak transaction volume is about 10 times of Ethereum’s.
The report indicated EOS blockchain has more than 500,000 users. However, data from security firm Peckshield shows among the 500,000 users, nearly 120,000 accounts are controlled by certain groups , and more than 200,000 accounts are pretty dormant by November 26. ThaT would mean active users only account for 37% of the total.
“DApps on EOS started to explode since the end of September, and the number grew rapidly in October. But with EOS DApp getting hotter , the group-controlled accounts started to emerge since October 4th.” PeckShield’s senior security expert Shi Huaguo told Blockchain Truth in a recent interview.
Although controllers behind these accounts are hard to identity, Shi thought they are possibly crypto bounty hunters and ‘click farms’. But these phantom accounts are not affecting the growth of DApp and the trading volume. Since October, daily active users(DAU) on EOS is far more than Ethereum’s.
Further, EOS is also troubled by series of hacking attacks. According to Peckshiled, EOS has saw 27 DApp security incidents by November 26th, resulting in the loss of 400,000 EOS which is equivalent of roughly 8 million yuan.
The security expert Guo Yonggang said most of the attacks are related to random number vulnerabilities, not to bugs of the blockchain . He believes multiple cyber attack teams actively discover and exploit vulnerabilities behind the scenes, similar attacks are likely to become more frequent, and their attack efficiency is gradually increasing.
EOS is trading at $1.68 at the press time, down 24 percent over the past 24 hours, according to Coinmarketcap. Its price shows no signs of recovery amid a greater crypto market sell-off.