As the cryptocurrency market bleeds out, the price of Bitcoin, Ethereum and many other top cryptocurrencies have fallen significantly against the USD. EOS, just like other altcoins also fell against the USD. However, even as the price fell, it was able to pass BCH and LTC in terms of market capitalization. Even if it is currently the 5th largest cryptocurrency per market capitalization, all isn’t well in the EOS network.
What Has Been Happening In The Market
This bear market is one of the worst the market has ever suffered. The rate at which prices fell against the USD within the last 40 days or so has left many wondering if this is the end for the cryptocurrency market. About $80 billion has been removed from the total market capitalization. The market capitalization is now struggling to stay above the $100 billion mark.
EOS Price Today – EOS / USD
Due to the pressure in the market, ETH fell from second to third place. While EOS got the fifth spot. After a while, EOS was able to take the fourth position from Stellar (XLM). At the time of writing, EOS was trading at $2.75. This shows that it was up by 11.67% against the USD and up by 1.67% against Bitcoin. The 24 hour trading volume is $1,435,043,362 and the market capitalization is $2,492,968,442. This is less than what was raised during the EOS initial coin offering. What does this mean for the network?
EOS Block Producers Under Fire
EOS runs of the Delegated Proof-of-Stake consensus algorithm. With this algorithm, block producers (different entities elected by EOS token holders) are responsible for producing blocks for the network. In return, they get EOS tokens. However, because of the fall in the price of EOS, the block producers are now working below their break-even price. This is according to a survey that was conducted on different block producers in different tiers. Part of the report was as follows:“The breakeven point for block producers in tier 1 is $4.04 per token. This is what makes the tier 1 the most resilient in the network. The breakeven point for tier two is $4.35. The breakeven point for tier 3 is $4.19. The breakeven point for tier 4 is. $4.38. While the breakeven point for tier 6 respondent is <$2.50, the tier 5 respondents didn’t specify.
The survey considered the average price the cryptocurrency would reach before block producers will declare bankruptcy. If EOS doesn’t recover soon, block producers will have to declare bankruptcy at any amount less than $2.50. Most of the EOS Block Producers have enough money to continue operations but those who do not have started closing down operations.
Apart from the issue of bankruptcy, there have been some centralization concerns in the network. Some members of the community are worried that only a few block producers will survive making the network more centralized.
The good news is that EOS has been trading in green all day following Bitcoin’s lead. The price is recording double digit gains. If the bulls are able to maintain the momentum, EOS may be able to recover above $3.00.