What is the smart contracting platform of the future? This is the billion dollar question that engaged investors, developers and enthusiasts ask themselves everyday. The competitive landscape for smart contracting platforms is constantly evolving with new protocols being launched using different consensus mechanisms, programming languages, resource models and so on.
The scope of this article will focus specifically on EOS and TRON, two third generation blockchains that initialised their main-nets in June. Our aim is to identify what separates these two protocols from a high level fundamental and technical perspective.
Block.one’s superior capitalisation allows them to aggressively improve EOSIO in multiple different verticals simultaneously without thought to the value of the token. This has enabled them to consistently push out bi-weekly updates to the EOSIO software. On the other hand, Tron will likely have to use their reserve of tokens to continue funding developments once the capital raised has diminished.
Delegated Proof of Stake networks become more decentralised as the dispersion of tokens amongst distinct token holders increases. Given the Tron foundation currently holds close to 35% of the total supply of TRON tokens they have considerable control over the network, leading to a higher degree of centralisation when compared to EOS. The Tron foundation’s tokens will unlock on 01.01.2020 and Block.one’s tokens vest linearly every second for 10 years. Once the Tron foundation’s tokens unlock the community will be watching vigilantly to ascertain how these tokens are being used to impact the network.
EOS has opted for pipelined byzantine fault tolerance which increases the time to finality but reduces the overhead of confirming transactions allowing for faster block times. Tron has opted for higher overheads which increases the length of the block interval but reduces time to finality. It is our view that decentralized applications will prefer shorter block times as they produce more responsive applications. The difference in finality time will have a trivial real world impact.
EOS utilizes the web assembly virtual machine. Smart contracts in web assembly can be created in many different languages and compiled down to WASM byte code. EOS initially supports C++ but official support for other languages is planned into the roadmap. On the other hand, Tron uses a fork of the Ethereum Virtual Machine which means it uses solidity as its programming language. This allows Ethereum dApps to easily port over to Tron and benefit from their faster architecture. However, solidity has a much smaller developer base than that of C++ which reduces the opportunity set of developers who can build decentralised applications on Tron. It also inherits legacy problems from Ethereum such as having to run the entire smart contract to execute one specific function within it.
Resource allocation is key in determining the level of friction required to build and interact with a decentralised application. This is an area where EOS has room for improvement as the on-ramps for a new user are not yet seamless. Initiatives are currently being worked on to solve these issues including the ability for smart contracts/dApps to pay for its users transactions on a per call basis. Both platforms utilise a staking model for allocating resources with Tron offering approximately 25 free transactions per day and EOS offering 10x the staked resources when not in congestion mode.
Only the block producers on the Tron network are able to propose and vote for changes to the network’s attributes. In comparison, EOS allows any token holder to propose and vote for changes to the network. These changes must then be implemented by 15/21 block producers. Furthermore, EOS allows token holders to delegate power to a proxy to vote on their behalf enabling a true liquid approval voting system.
Real World Performance
The figures below were calculated after 6 months of the Tron and EOS main-net’s going live . It clearly shows the dominance of the EOS main-net over this time period.
The increasing popularity of open source software enables great advancements in technology to be shared across platforms. This reduces the defensibility of a blockchain protocol’s technological edge as it can be borrowed and implemented by its competitors. Tron is a great example of this taking inspiration from both Ethereum in the form of the EVM and Steem/Bitshares in the form of the DPOS (Delegated Proof Of Stake) consensus mechanism.
Creating strong network effects is the most important factor when considering which smart contracting platforms will be successful in the future. Having a first mover advantage has proven to generate large and defensible network effects throughout history. Microsoft pioneered the desktop operating system MSDOS in 1981 and thirty-eight years later they still retain 75.47% share of that market. EOSIO and TRON both benefit from having a first mover advantage in the next generation of blockchain technology and this offers them the opportunity to generate significant value and network effects.
In the long run what will separate these two protocols is the ability for developers to create frictionless decentralised applications that appeal to the mass consumer and not just the informed blockchain community.