How does EOS and EOSIO work?

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When a user attempts to open a dApp, instead of searching a local device, the appropriate device searches the blockchain stored files on a network. It is EOS' desire to take full advantage of this burgeoning market. Ultimately the goal of EOS is to make the development process more attractive and simpler for various programmers to work within the EOS framework than other available blockchain projects.

Most blockchain projects employ a transactional model of operation. This entails the necessity of users to acquire a projects token and spend the token to gain access to that specific network. On the other hand, the EOS token and EOSIO blockchain (EOSIO is a blockchain protocol that is powered by its native utility token, EOS) employs a free access model.

In the EOS ecosystem, proportional access to the system is granted based on the number of EOS tokens owned. As such, users need only to buy tokens upfront to access this protocol, and have permanent proportional access for so long as they own the tokens, and the users tokens are not consumed by the system.

In this subsection of the Leo Finance EOS Coin Guide let's investigate just how EOS and EOSIO are able to employ this free access model in a sustainable fashion.


In essence, the EOS ecosystem utilizes two key elements:

  • the EOSIO software, which is analogous to a computer's operating system. The EOSIO operates as the manager of the EOS network and utilizes blockchain architecture to achieve both vertical and horizontal scaling of decentralized applications on the network.
  • the EOS token, which is the native utility token used in the network.

Any user holding tokens of an EOS integrated blockchain may participate in choosing block producers by virtue of a continuous approval voting apparatus. Anyone may participate in this block producer election procedure and will be granted the opportunity for block production in proportion to the votes they received relative to the other producers in the system.

So, how specifically does this work?

  • In each round of block production, 21 producers participate.
  • At the beginning of each and every round, 20 block producers are chosen automatically. The 21st producer is picked by reviewing the number of votes they received in proportion to the votes cast for other producers.
  • These producers are then shuffled using random numbers derived by their respective block times. The purpose behind this is to ensure a balanced connectivity is maintained with the other producers.
  • To maintain regular block production as well as the 3 second block times, producers are punished by being removed from consideration for participation for their failure to comply.

A blockchain relying on a Delegated Proof of Stake mechanism normally has 100% block producer participation. The time for a usual confirmation of a transaction with a 99.9% certainty is 1.5 seconds from network broadcast. A node is only required to wait until a 2/3rds majority of producers arrive at a consensus to have absolute certainty. Regardless of chain length, every block is required to gain 15/21 approval for inclusion in the chain.

The EOS software adds the feature of Transaction As Proof of Stake (TAPoS) to its system. This feature requires the inclusion of the hash of the recent block header in every transaction. TAPoS operates to prevent a transaction 'replay' on differing chains, and also alerts both the network and the user which fork the stake has been system assigned. (Parenthetically, this TAPoS system likewise provides protection from malicious acts of validators on other chains).

In this system, it is the block producers that create the necessary number of blocks. And for each new block they produce, they are rewarded with newly minted EOS tokens, making the system inflationary. This hike in supply is set so as to not exceed 5% and functions in a fashion that complements EOS network file storage.


The EOS system:

works on an ownership model whereby users own and are entitled to use resources proportional to their stake, rather than having to pay for every transaction. So, in essence, if you hold N tokens of EOS then you are entitled to N*k transactions.

[Turrillo, H. Building up the True Blockchain through the EOS Platform. (Accessed November 27, 2021).

The benefits of this model are readily apparent:

EOS’s ownership model provides DAPP developers with predictable hosting costs, requiring them only to maintain a certain percentage or level of stake, and makes it possible to create freemium applications. Furthermore, since EOS token holders will be able to rent / delegate their share of resources to other developers, the ownership model ties the value of EOS tokens to the supply and demand of bandwidth and storage....


We are all very aware of the huge transaction fees associated with the Ethereum blockchain. Developers face high costs for running and hosting applications on Ethereum. Therein lies the fundamental difference between EOS and Ethereum with respect to fees.

On the Ethereum blockchain, chain resources are in essence rented to each user for fees. However, in the EOS ecosystem, application developers are given ownership of the chain's computational power and resources. To clarify, if a developer has staked 1/10,000th of the total EOS stake, that developer would be the owner of 1/10,000th of EOS resources for so long as the individual stake is maintained.


From the above, it is clear that EOS is setting itself up to be a competitor with Ethereum. Time will be the determinative factor in deciding the ultimate fate of EOS and EOSIO.

Posted Using LeoFinance Beta


We love EOS!
Recently been spending quite a bit of time on Atomic Hub which is a marketplace built on WAX (which runs on EOS!).

Thanks for an informative post :)



Eos and Wax is one of my favorites projects.

Using them i don't like Ethereum even more.

But sure that i keep few eth on my wallet