The EIDOS airdrop is clogging the EOS blockchain

On Nov. 1, 2019, Coinbase noticed a drop in performance in the EOS ($EOS) blockchain, one day after the EIDOS airdrop contract launched on the network. The EIDOS contract allows EOS holders with available network resources to earn free EIDOS tokens for each transaction submitted to the contract. As a result, network activity spiked as users rushed to acquire the new token and flip it on exchanges like MXC Exchange that listed an EIDOS/$USDT trading pair. The rise in activity caused EOS to enter “congestion mode,” which limits the number of transactions a user can submit “to their pro-rata share” of total staked EOS resources.

Source: EOS Titan

Why it matters:

• Coinbase reported 95% of all EOS actions since Oct. 31 were related to the EIDOS contract. Near free money is unsurprisingly popular. But this obscure project that provides no known value outside of exchanging it for fractions of a penny managed to cripple the network for most regular users. The EIDOS website says the airdrop will continue through 2020, meaning users can expect EOS to stay in this state until it is no longer profitable to collect EIDOS. The statistic also indicates the demand for other EOS-based applications and activities is remarkably low.
• This is the second notable instance of EOS experiencing congestion since the launch of EOS REX, the EOS-based resource exchange, in May 2019. Thefirst instance occurred when an attacker acquired enough resources to spam the network and steal 30,000 EOS from the decentralized gambling application EOSPlay. EOS REX allows users to lease computing resources at a far more enticing rate than gathering the materials required to stake EOS CPU directly.
• Despite what some may consider troubling circumstances, the EOS network is behaving as designed. Congestion mode is inherent and prevents users from processing transactions beyond their CPU stake in times of high network activity. Users could buy more EOS or move their holdings off of exchanges and stake it on the network. However, static CPU rental rates and EOS token exchange rates suggest most users purchased EOS to speculate on price.