Cryptocurrency Market Declines to $241 Billion, EOS Go Through a Massive Drop

Over the past 24 hours, the valuation of the cryptocurrency market has declined from $260 billion to $241 billion, dropping by more than $19 billion, as leading cryptocurrencies including bitcoin, Ethereum, Ripple, Bitcoin Cash, and EOS saw drops in large margins.

For the third consecutive day, EOS, the delegated proof-of-stake (PoS) network based on the Ethereum blockchain protocol, has gone through the largest loss amongst other cryptocurrencies. EOS recorded a loss of 13 percent, while BTC, ETH, XRP, and BCH dropped 3.5%, 4.6%, 5.8% and 8.5% respectively on June 24.

The reason behind the drop in price is as a result of various factors but in summary, the main reasons for the drop can be categorized into two factors:

#1. Abnormally large rally prior to and after the mainnet launch

#2. The recent controversy around EOS constitution and centralization.

It was previously reported that Cornell professor Emin Gun Sirer and smart contracts founder Nick Szabo condemned EOS for its bugs and characteristics that indicate toward network centralization.

Szabo specifically emphasized the ability of EOS to stop their user accounts, repossess funds and auction accounts if user accounts are inactive for a long period of time. Szabo noted:

“In EOS a few complete strangers can freeze what users thought was their money. Under the EOS protocol, you must trust a ‘constitutional’ organization comprised of people you will likely never get to know. The EOS ‘constitution’ is socially unscalable and a security hole.”

EOS disagreement increased when EOS deferred 27 accounts with no justification. In a document called “Emergency Measure of Protection Order (ECAF),” with abnormal authoritarian wording, EOS team noted, “it is hereby ordered that the EOS Block Producers refuse to process transactions for the following accounts and keys indefinitely,” given that the 27 accounts did not process transactions for long periods.

Before the launch of the EOS mainnet in early June, the price of EOS rose from $6 to $23.1, by over 285 percent. The surprisingly large increase in the value of EOS initiated further drop of EOS, and eventually led the cryptocurrency to record a greater loss compared to other leading cryptocurrencies.