EOS Network Enjoys Resurgence as Viable Alternative to Ethereum, with Advantages Such as Faster Transaction Processing, More Scalability, and Lower Transaction Costs

With the launch of the EOS EVM in April 2023, the doors to the performance, reliability, and low fees of the EOS network have been opened for hundreds of EVM dApps

Liquidity is a crucial concept in the world of crypto and decentralized finance, indicating the ease with which a given asset can be bought or sold in large quantities without significantly impacting its price. It’s one of the key metrics that define crypto investors' ability to enter into and exit positions on different assets. 

To understand liquidity better, let’s compare it to the availability of a certain product in a physical market. Imagine you’ve gone shopping at a farmer’s market and you’re hoping to buy some eggs. Most likely, there will be dozens of different stalls all selling various types of eggs. You’ll easily be able to find the exact type and size you want, and there won’t be much of a queue so you can quickly complete your purchase. Such a situation is possible due to high liquidity, which means a stable supply and demand.

However, in situations where there is less supply and too much demand, it won’t be so easy to buy the eggs you want. At a smaller market with just a handful of vendors, it will take longer to find your eggs, and you might have to pay a higher price. If there’s only one vendor selling the eggs you need, you may have to wait a while before you can buy them, and there’s a chance you won’t be able to buy them at all if the supply dries up and the farmer doesn’t have any left to sell. That’s what we mean by low liquidity. 

For crypto traders, deep liquidity is vital. It means there are lots of buyers and sellers, which makes it possible to quickly trade crypto assets without paying a higher price than expected. The more liquidity a market has, the easier it is to buy and sell assets at a fair price, just as it would be to buy eggs at a busy farmer’s market. 

Which Networks Have Good Liquidity?

Liquidity can be problematic on some decentralized crypto exchanges, where users are incentivized to deposit digital assets in a “liquidity pool” for others to trade against. It can be challenging for protocols on smaller blockchain networks to attract sufficient liquidity, making it difficult for them to fulfill larger orders. In such cases, you might end up paying a much higher price than the publicized exchange rate to acquire the asset you need. 

Fortunately, on major blockchain networks like Ethereum, Solana and Binance Smart Chain, liquidity is less of a problem. As some of the most established networks in the crypto industry, they have millions of users globally and many of them are only too happy to provide the liquidity required by the various DEX platforms and DeFi protocols that live on them. 

That’s why trading crypto on a platform such as Uniswap on Ethereum rarely presents any problems. The incentivization mechanisms of DEXs and protocols on Ethereum generally work very well, using algorithms to adjust the rewards accordingly if one of the two assets in a liquidity pool becomes insufficient. By increasing the rewards to liquidity providers, liquidity pools can quickly regain equilibrium, ensuring that users can continue to trade freely. 

Liquidity on Ethereum is further enhanced by protocols such as Dolomite, which offers DEX-based margin trading for over 1,000 crypto assets. Because it’s live on multiple Ethereum L2s, including Arbitrum, Mantle, Polygon zkEVM and X Layer, the Dolomite protocol taps into them all with its virtual liquidity system, enabling high throughput and capital-efficient trading for users. 

The vast liquidity on Ethereum, BSC and Solana stems from their enormous market capitalization. In the Ethereum ecosystem, the ETH token alone has a market cap of over $327 billion, and many other tokens also boast billion dollar-plus market caps, such as SHIB, DAI, RENDER and ARB. 

Not every blockchain has the same advantage. Still, there are various things smaller blockchains can do to ensure they always have sufficient liquidity to keep their DeFi engines ticking over. 

Smaller Networks Can Fight Back

A good case in point is the EOS network, which has enjoyed a strong resurgence over the last couple of years and is fast becoming considered as a viable alternative to Ethereum, with advantages such as faster transaction processing, more scalability and lower transaction costs being some of its key advantages.

With the launch of the EOS EVM in April 2023, the doors to the performance, reliability and low fees of the EOS network have been opened for hundreds of EVM dApps, and dozens of developers have jumped in. For instance, numerous top crypto wallets, such as MetaMask, Ledger and Coinhub, have announced support for EOS. DeFi has eagerly embraced EOS too, with dApps like Noah Swap, Neutroswap, Frogge.finance and Ave.ai looking to take advantage of EOS’s Yield initiative, which aims to incentivize dApps that increase the total value locked on EOS and generate yield for its users. 

As a natural consequence, this influx of new dApps and wallets on EOS is bringing vast amounts of

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