The Game of Dethrones: Does Ethereum Stand a Chance Against Cardano and EOS?

Crypto can get pretty overwhelming these days. New blockchains and scaling solutions launch each year and coins are being listed to crypto exchanges at a rapid pace. Everything's so quick that what people are calling "the next big thing" today is suddenly a complete shitcoin tomorrow. So, how do you know if something is a scam or legit? "Do your own research" may be the response you expect, but if only it was so simple.

Truth is, there's no hard-and-fast rule or scientific methodology for determining which cryptos are good to buy. Many crypto investors long abandoned the traditional investment wisdom in pursuit of the prophetic "Ethereum killer." While the list of potential competitors to ETH is extensive, only one can take the throne. Two smart contract platforms that are taking on Ethereum are EOS.IO and Cardano. When it comes to deciding who will end up on top between EOS vs Cardano vs Ethereum, the two main questions are: What problem are EOS and Cardano trying to solve? And how are they better than Ethereum? 

The best way to measure up a crypto is by comparing it to the ones that came before it. Every new cryptocurrency is held up against the blue chips Bitcoin and Ethereum, the latter being the first to introduce the smart contract. Essentially, they lead and the rest follow, with Ethereum being a major trendsetter. One of the best examples of this is when the founders of Ethereum began embracing proof of stake (PoS), the vast majority of crypto projects followed suit. 

EOS.IO and Cardano are two proof of stake competitors to Ethereum, which is still working on its long-overdue upgrade to proof of stake. Cardano and EOS.IO beat Ethereum to the punch in this regard as they're already functional PoS blockchains. ETH is still the second-largest cryptocurrency by market cap, but ADA is catching up at seventh place while EOS is dead last out of the three.

If Bitcoin is the uncontested godhead of the crypto pantheon in the sky, Ethereum is the divinely appointed king ruling the Earth. Metaphors aside, how appropriate to begin with Ethereum since it's the platform that first expanded blockchain's applications beyond just digital cash. Ethereum is extremely influential to those who've been paying attention: It was the first platform to introduce smart contracts and its titular foundation is now the model for crypto nonprofits.

Ethereum is still the number one blockchain for smart contracts and decentralized applications (dApps) and hosts hundreds of decentralized finance (DeFi) protocols with thousands of tokenized assets, making it the largest DeFi ecosystem by far. However, Ethereum has also been criticized for its high transaction costs as a result of both ETH's high price and high transaction volume congesting the network.

Ethereum set the tone for the entire crypto space and its founders are still extremely influential. ETH was the brainchild of co-founder Vitalik Buterin, who's leading Ethereum's upcoming transition to a proof of stake protocol. Ethereum's other founders have also gone on to work on other major blockchains, like Gavin Wood, who founded Polkadot, and Charles Hoskinson, the founder of Cardano. While these other projects are definitely Ethereum inspired, they haven't experienced the same level of adoption or price action.

Hoskinson departed from the Ethereum project because he believed in accepting venture capital support, which would've required the Ethereum Foundation to become for-profit against Buterin's wishes. This resulted in Hoskinson leaving to found a competing smart-contract platform that has, frankly, struggled to keep up.

Despite being rooted in the same heritage as Ethereum, Cardano has set out on a slightly different mission. Firstly, Cardano does not have a whitepaper written by its founders but is rather the product of peer-reviewed research and scientific philosophy. Cardano's development took the academic route because its goal is to be the industry-leading enterprise blockchain that will spearhead mainstream crypto adoption.

Ambition is great, but in practice, Cardano is just trying to be a better Ethereum. Cardano's ongoing development is organized into a five-phase release timeline with scalability being the current focus. Now in the fourth phase of development, Cardano is working to improve throughput—meaning handle more simultaneous transactions and process them faster—by implementing an upgraded protocol called Hydra. 

If Hydra is successful, Cardano may no longer be the Kirkland-brand Ethereum. If they deliver on their promises, Hydra could make DeFi on Cardano exponentially faster than on Ethereum by enabling sidechains that can process over one million transactions per second (TPS). Although Cardano still plans to implement a governance structure in its final development phase, Hydra's success could deal a fatal blow to Ethereum if it is fully implemented before Ethereum's proof of stake upgrade.

EOS.IO is another smart contract platform that has been overshadowed by Ethereum. Their mission is similar to Cardano's in that they both aim to be scalable PoS blockchains for enterprise applications. Though EOS.IO claims to host thousands of commercial-scale dApps, its DeFi ecosystem is barren in reality. The popularity of ETH and ADA hasn't made it easy for EOS to stay relevant.

EOS.IO was founded by Dan Larimer and his blockchain software company Block.one in 2018. One of the biggest issues with Ethereum has been high fees and, while Cardano was able to significantly reduce the cost of sending a transaction, EOS.IO has implemented a new economic structure that is the first to completely eliminate transaction fees for its users. 

EOS.IO is able to do this by combining its delegated proof of stake system with its governance structure. This means that staking the EOS coin does not earn you interest, but rather translates to voting power. This voting power is used to select 21 validators known as "block producers" to secure the network. EOS.IO enables fee-free transactions because it's economically structured so that the cost of running the network is paid by developers rather than users. 

Developers must stake EOS proportional to how demanding their dApp is, with larger dApps being more expensive to host. This completely shifts the incentive structure by making developers the economic drivers of the ecosystem rather than users. Although eliminating fees is great for users, this has created a barrier for development on the platform and challenges for EOS adoption.

With all the hype leading up to Ethereum's PoS upgrade, there is a good chance that 2022 will be the make-it-or-break-it year for ETH to solidify its dominance. Ethereum is the king of smart contracts today and this is unlikely to change overnight, but it all depends on if Ethereum can rise to the challenge to compete with the scalability and low fees of other networks. 

Despite being an underdog, the promising Hydra upgrade has contributed to bolstering support for Cardano. Altcoins are preoccupied with each other as Cardano is fighting Solana for a spot in the top-ten coins, thus producing circumstances that are heavily in favor of ETH and all but guarantee it a comfortable spot right under Bitcoin on the crypto charts. Meanwhile, EOS is objectively out of its league since it hasn't broken even the top 50 coins by market capitalization. Conventional thinking would rule out EOS as a threat to Ethereum, but unprecedented doesn't mean impossible in the world of crypto.