You Cannot Fake EOS Transactions & EOS Doesn’t Care About Their Intent, Origin, or Destination.
A response to AnChain.ai’s report and the subsequent media coverage regarding the evaluation of the transaction activity of the top 10 gambling dApps on EOS.
Earlier this month, AnChain.ai announced that their proprietary platform analyzed the top 10 gambling dApps on EOS (they do not specify by which metric by which they determined their rank) and concluded that 51% of the total unique accounts and 75% of transactions associated with the underlying smart contracts on these dApps are the result of automated behavior a.k.a. bots.
As a result of this article, some media outlets wrote “New Report Finds Dapps Useless — Eos Users Are Mostly Bots”, in an attempt to delegitimize EOS itself.
Nevertheless, nothing in Anchain.ai’s report can be used to infer that EOS is any less fast, secure, decentralized, flexible, scalable or agile than it actually is.
dApps are Useless?
To start, we will forgive the sweeping dismissal the person responsible for this particular headline calling dApps useless in general. This doesn’t just attack EOS but also dismisses Ethereum, Tron, NEO and every platform that supports smart contracts as well. It ignores the exploitation of content creators across existing social platforms, the insecure way personally identifying information is stored, and the centralized consensus that rules much of the internet. But even so, EOS has only been live for one year. The UX/DX tooling and development infrastructure has only just started to take hold. Is it not prudent to allow more time for such a foundational technology to find its footing given its nascent stage, if not for EOS but for the dApp concept in general? Bitcoin has been around for over a decade, has it “won” yet? These things take time and organizations across the world are experimenting with decentralized applications more and more each day on EOS and other platforms. Despite this, we see a rich and diverse dApp ecosystem emerging on EOS, again after only a year.
What this report and the supporting media demonstrates is that, based on their claims, neither AnChain.ai nor these media outlets understand the difference between the application layer and the protocol layer (i.e. specific product vs. agnostic product platform).
We are not interested in debating whether or not these transactions are driven by bots or humans. Nor do we wish to debate the intent behind the transactions at all because, frankly, EOS does not care about intent when processing transactions. Transaction intent of a subset of dApps is not important when evaluating the fitness of the EOS blockchain.
Addressing The Report
From reading the report we can infer that its purpose is to establish the importance of “authentic” activity when measuring the value of a public blockchain platform or any applications built on top of it.
We are in the early stages of the blockchain technology industry. A lot of new blockchain protocols and businesses are being created within this space, and more often than not, user activity, transaction volume, daily volume, and various other growth metrics are often used as proxies for how successful a DApp, protocol, or business is performing.
They are half right.
Within the report, they correctly point out that inflating dApp activity may be intended to inflate the value of the underlying dApp token. If one is evaluating a specific dApp token for whatever purposes, this is problematic and likely deceitful.
Most DApps are backed by tokenomics, meaning they have a token crypto asset that is actively traded across various crypto exchanges. If there is no trading activity for this token and the exchange where it is listed has an illiquid order book, the token asset will likely face sell-side pressure and decrease in value.
Verifying that any business applications’ activity is authentic is foundational to understanding the value of any business overall. No one should refute this.
Transaction Intent Does Not Alter The Intrinsic Properties of a Blockchain
Here’s where the bias shows, an analogous situation to what is playing out now, but in the reverse with Bitcoin instead of EOS.
95% Bitcoin transaction volume is fake, but its value is real.
Does bot-driven exchange trading transfer of Bitcoin make it any less secure of a store of value? Does surmising the intent behind a transfer in any way affect the intrinsic properties of the token or the underlying protocol? Of course not.
When an Ethereum smart contract is hacked and funds are captured, is Ethereum defunct as a smart contract platform? Is the consensus mechanism at fault? Or is it developer error?
Does surmising the intent of transactions on EOS mean that it’s any less able to support applications that require a high transaction throughput? Does it mean that the cost of development is more or less? Is governance affected? A dApp smart contract “inflating” its transaction count does not affect the intrinsic properties of the EOS blockchain.
If EOS were unable to support these transaction activity levels under normal circumstances, then we would have an issue. But these transactions aren’t “fake”, one cannot “fake” a blockchain transaction. The reality is that the infrastructure that runs the EOS software is real and distributed across the globe with 21 block producers and hundreds to thousands of validating nodes. It is collectively processing these transactions irrespective of intent, source, content, or destination. These transactions have upfront capital costs. EOS does not award resource discounts for bot-driven traffic, nor does it prioritize organic traffic. EOS doesn’t care about intent, applications do.
Making Business Decisions
When a business is evaluating blockchains to deploy on they are probably evaluating their direct competition. But based on the numerous “Why We Chose EOS” articles we’ve read over the past few months (example 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, etc.) the overwhelming reasons behind their decisions to deploy on EOS were based on EOS’ ability to perform and realistically support their business.
To make their decisions, these businesses valued decentralization, throughput, capacity, token liquidity, governance, transaction model, security, cost of development, cost of resources core features, etc. These are the challenges answered by EOS at the protocol layer.
UX/UI, transaction intent, key management, etc., are challenges answered by the application layer. Generating “meaningful” transactions is the responsibility of the dApp, enabled by the EOS blockchain.
Could this volume level be “faked” on competing platforms even if attempted?
With 15,000 to 40,000 unconfirmed transactions at any given moment, we are guessing at least Ethereum could not at the current point in time.
We thought we would find a similar report for Ethereum activity published by AnChain, but we could not. We look forward to when AnChain publishes such a report with the same level of academic rigor as they did for 10 EOS dApps so that they can substantiate claims like the one they tweeted below, which touts “active addresses” as one the metrics contributing to Ethereum’s “victory” over EOS & TRON. Source
We look forward to watching the EOS dApp ecosystem mature and for amazing businesses to continue to disintermediate, disrupt, and reposition power and influence back into the hands of the everyday value creators. VOICE by Block.one will be a welcome entry in the space and will shed light on user authenticity metrics in general as the platform will require one’s identity to be to verified.
In the meantime, EOS will flourish. Many Block Producers, candidates, and developer groups around the world work around the clock to maintain the EOS blockchain and/or build open-source tools to aid the community in their development. Wallets and dApps can connect easier than ever before, updates are coming which will eliminate the EOS user’s need to manage their own resources on-chain, and some have developed ways to abstract away private key management altogether. Eventually, users will no longer know they are engaging with a blockchain-based dApp. This is where we are going together.
We are hopeful that nearly all blockchain platforms facing obstacles are able to surmount them because we are all still in a very small boat together. It will take a behemoth lift by the entire blockchain industry to move the world toward a more equitable decentralized one. In that world, many solutions will exist and EOS will be one of them. EOS New York will continue its work to provide world-class infrastructure, open-source software contributions, and actively participate in governance developments.
Lastly, here’s a list we compiled of EOS successes.
