The Strategy Outline
On June 1, 2018, the crypto industry witnessed the conclusion of the largest token sale in its history. Block.one’s year-long EOS initial coin offering officially closed after raising a staggering $4.2 billion, making it the most well-funded blockchain project the space had ever seen. At the same time, Bitcoin traded at $7,541 and Ethereum sat at $580, both dramatically down from their December 2017 all-time highs — a harsh reminder that even record-breaking fundraising couldn’t shield the market from its cyclical nature.
For decentralized finance, the EOS ICO represented both an inspiration and a cautionary tale. The sheer scale of capital raised demonstrated that institutional and retail investors alike were hungry for alternatives to Ethereum’s high gas fees and limited throughput. Block.one promised zero-transaction-fee decentralized applications, high-speed processing, and a developer-friendly environment — exactly the kind of infrastructure DeFi would eventually need. Yet the centralized nature of EOS’s Delegated Proof-of-Stake consensus, with only 21 block producers, raised fundamental questions about whether truly decentralized financial applications could thrive on such an architecture.
The strategy for DeFi builders in June 2018 was clear: learn from EOS’s technical ambitions while avoiding its governance centralization. Ethereum remained the undisputed home of early DeFi primitives, with MakerDAO actively developing its DAI stablecoin system — a project that would become the cornerstone of decentralized lending and borrowing.
Smart Contract Architecture
EOSIO v1.0, released as open-source software on June 1, 2018, introduced a fundamentally different smart contract architecture from Ethereum’s. Built in C++ and compiled to WebAssembly, EOS smart contracts offered significantly higher throughput than Ethereum’s Solidity-based virtual machine. The platform’s DPoS consensus mechanism allowed for parallel execution of smart contracts, theoretically enabling thousands of transactions per second — a capability Ethereum wouldn’t achieve for years.
However, the architecture came with trade-offs that directly impacted DeFi viability. The 21-block-producer model meant that governance was concentrated among a small group of validators, creating potential single points of failure for financial applications requiring censorship resistance. Additionally, EOS’s resource allocation model — where users needed to stake tokens for CPU, network, and RAM — introduced complexity that made building user-friendly DeFi protocols more challenging than on Ethereum’s gas-based system.
Meanwhile, Ethereum’s simpler architecture continued to attract DeFi developers. MakerDAO’s smart contract system, built on Ethereum, used a collateralized debt position (CDP) model where users could lock ETH as collateral and generate DAI stablecoins. This straightforward mechanism — overcollateralization with transparent liquidation rules — became the template for hundreds of DeFi protocols that would follow.
Risk vs. Reward
The risk landscape for DeFi in mid-2018 was defined by extreme market volatility and regulatory uncertainty. Bitcoin had fallen roughly 70% from its near-$20,000 peak just six months earlier, and the total cryptocurrency market capitalization had collapsed from over $800 billion to approximately $300 billion. In this environment, any DeFi protocol handling collateral faced existential liquidation risks.
For projects considering EOS as a DeFi platform, the risks were even more pronounced. The token freeze that accompanied the ICO’s conclusion meant EOS ERC-20 tokens were no longer transferable on Ethereum, and the transition to the native EOS blockchain required users to register their tokens — a process that confused many holders and led to reports of lost funds. The reward, however, was enticing: a high-throughput blockchain with zero transaction fees could theoretically support DeFi applications that were impractical on Ethereum due to gas costs.
On Ethereum, the risk-reward calculus was different but equally challenging. MakerDAO’s CDP system required overcollateralization, meaning users had to deposit more ETH than the DAI they could generate. With ETH at $580 and highly volatile, maintaining adequate collateral ratios became a constant concern. The reward was a decentralized, censorship-resistant stablecoin — something the crypto ecosystem desperately needed as Tether controversies dominated headlines.
Step-by-Step Execution
For participants navigating the DeFi landscape in June 2018, the execution framework looked markedly different from today’s sophisticated yield farming strategies. The process began with understanding the nascent stablecoin market, where Tether (USDT) held a dominant $2.5 billion market capitalization but faced growing skepticism about its dollar reserves.
Step one was securing exposure to Ethereum-based DeFi primitives. MakerDAO was the primary on-ramp, offering users the ability to open CDPs, lock ETH as collateral, and generate DAI. The system maintained DAI’s dollar peg through a combination of overcollateralization, stability fees, and automated liquidation mechanisms — a design that would be stress-tested in the months ahead.
Step two involved monitoring the EOS mainnet launch process. The network required more than 15% of all EOS tokens to vote for block producers before the blockchain could go live, a governance mechanism that created significant uncertainty during the transition period. For DeFi-focused participants, this meant carefully evaluating whether EOS’s architecture would support lending, borrowing, and stablecoin protocols comparable to those being built on Ethereum.
Step three was risk management in an extremely volatile market. With BTC at $7,541 and showing no signs of bottoming, DeFi users had to maintain conservative collateral ratios and avoid overleveraging. The bear market was unforgiving — positions that seemed well-collateralized at $580 ETH could quickly become undercollateralized if the downward trend continued.
Final Thoughts
The conclusion of EOS’s $4.2 billion ICO on June 1, 2018, was a watershed moment that crystallized the tension at the heart of decentralized finance. On one side stood a well-funded, technically ambitious platform with centralized governance. On the other stood Ethereum — underfunded by comparison, plagued by scalability issues, yet home to the most innovative DeFi primitives the industry had seen.
History would show that Ethereum’s approach won out. MakerDAO’s DAI stablecoin launched later in 2018 and became the bedrock of a DeFi ecosystem that would eventually grow to hold hundreds of billions in total value locked. EOS, despite its technical merits, struggled to attract DeFi developers and would eventually rebrand to Vaulta in a bid to remain relevant.
For the DeFi community in June 2018, the lesson was clear: decentralization and composability mattered more than raw throughput. The protocols built during this bear market — when BTC was at $7,541 and ETH at $580 — would form the foundation of a financial revolution that few outside the crypto community could yet appreciate.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, and readers should conduct their own research before making any investment decisions. Past performance is not indicative of future results.
4.2 billion for a chain that peaked at 21 block producers and a social media app. incredible roi
21 block producers controlling a $4.2B chain was always going to end badly. the centralization was the feature not the bug for block.one
heap_badger 21 BPs was always the pitch though. block.one sold centralization as efficiency and investors bought it because the throughput numbers looked good in demos
heap_badger 21 BPs was always the pitch though. block.one sold centralization as efficiency and investors bought it because the throughput numbers looked good in demos
heap_badger 21 BPs was always the fatal flaw. block.one raised 4.2 billion and built the most expensive ghost town in crypto history. voice lasted what, 8 months?
dpoS_skelectric 21 BPs was always the fatal flaw. block.one raised 4.2 billion and built the most expensive ghost town in crypto
dpos_refugee 21 BPs was always going to be capture bait. block.one raised 4.2 billion and the chain still has fewer active dApps than solana had in its first month. the capital efficiency was zero
the erc20 token sale ran for 350 days straight. longest ico in history and somehow people kept buying
350 days and people kept buying even as BTC crashed from 20k to 6k. the ICO FOMO was a different kind of crazy
block.one promised zero fees and high throughput. got a voice instead
^ lmao. the voice was the punchline nobody asked for
cosmos_pilled block.one launched voice, a social platform nobody asked for, burned through millions, and shut it down in under a year. legendary waste
350 day ICO during a bear market where btc went from 20k to 6k. block.one timed the raise perfectly and then did nothing with the money. worst capital deployment in crypto history
4.2b raised in 350 days for 21 block producers. voice shutdown was the final nail in the coffin
350 day ICO while btc crashed from 20k to 6k and people kept buying EOS. that is the most irrational thing I have ever seen in crypto and I was there for every ICO in 2017
Stefan W. 350 day ICO while BTC went 20k to 6k is insane. but thats exactly why it worked, people wanted anything that sounded like infrastructure during the bear
Stefan W. 350 day ICO while BTC went 20k to 6k is insane. but thats exactly why it worked, people wanted anything that sounded like infrastructure during the bear
block.one raised 4.2B and the best thing they shipped was Voice, a social app that died in 8 months. Dan Larimer left shortly after. the entire EOS saga is a masterclass in capital destruction
21 BPs voting each other back in every cycle was the real governance flaw. DPoS sounds great on paper until you watch cartel formation happen in real time
block.one sitting on 140k BTC from the ICO and BTC is at 68k now. they literally made more from holding than from building EOS
felix_dump_ 140k BTC just sitting there while they let EOS decay. criminal allocation. should be a case study in every business school
block.one sitting on 140K BTC from the ICO and BTC is at 77K now. they made more from holding BTC than building EOS
Kostya P. exactly. 140K BTC from the ICO just sitting in their treasury while EOS went nowhere. they made more from BTC appreciation than from actually building anything. wild
they raised 4.2B to build a chain that nobody uses and a social app that lasted 8 months. block.one is the greatest cap deploy failure in crypto history
350 day ICO during a bear market raising 4.2B. block.one timed the token sale perfectly and then did nothing with the money
voice was dead on arrival. they spent 4.2B and the best product was a twitter clone that lasted 6 months