After a multi-day rally, digital currency EOS was trading lower with the broader market on Wednesday as the return of bearish sentiment prevented further gains in prices. However, unlike the broader market, EOS is facing fresh controversy over the sudden explosion in RAM prices, which is making speculators richer at the expense of the broader ecosystem.
EOS Price Levels
The value of EOS fell more than 4% Wednesday to $8.74 a unit, according to CoinMarketCap. The digital currency spiked 28% between Friday and Tuesday as part of a wider market rally. EOS peaked at $9.26 early Tuesday.
At present values, EOS has a total market capitalization of $7.8 billion, placing it in the no. 5 position among active cryptocurrencies. EOS is by far the largest token in circulation with a total market cap that is more than three times bigger than either Tether or Tron.
More than $800 million worth of EOS exchanged hands on Wednesday. with major exchanges Huobi, OKEx and Bithumb generating the largest share of the turnover.
The broader cryptocurrency market was valued at $264.7 billion, having declined 3.6% over the past 24 hours.
EOS RAM Prices Surge
The launch of EOS’ mainnet was intended to make free transactions possible. In doing so, it created a cut-throat market for RAM – the resource decentralized applications (dApps) developers need to pay for each user account. The vital resource was subsequently hoarded by speculators, leading to a massive surge in costs.
RAM prices experienced a four-fold increase on Tuesday, reaching a high near 0.08 EOS per KB. In practical terms, this made the creation of a new EOS account cost roughly $30. This also meant new airdrops needed thousands of dollars to purchase the required RAM. As of Tuesday, the total RAM market was 7,432,410.64 EOS and the network’s total RAM capacity was 64 GB.
In theory, RAM hoarding could make new account creation prohibitively expensive, rendering the EOS network impossible to use. That’s the complete opposite outcome EOS creator Dan Larimer envisioned when he assembled the network protocol. As the EOS whitepaper showed, account creation was envisioned as a “nominal cost.” The whitepaper states:
“In a decentralized context, application developers will pay the nominal cost of account creation to sign up a new user. Traditional businesses already spend significant sums of money per customer they acquire in the form of advertising, free services, etc. The cost of funding a new blockchain account should be insignificant in comparison. Fortunately, there is no need to create accounts for users already signed up by another application.”
At the time of writing, the EOS RAM price was a little more than 0.49 EOS/KB, according to FeeXplorer.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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