EtherZero (ETZ) is a little known fork of the Ethereum Network that has had quite a sizable rally recently. This has driven ETZ up the further on up the CMC rankings.

Forked from the main chain in January of 2018, EtherZero was initially viewed with much skepticism. However, since then there has been quite a bit of development on the protocol. Moreover, ETZ has been listed on a number of exchanges and community interest has been growing.

So, does EtherZero actually have a shot?

In this EtherZero review, I will give you everything that you need to know about the project. I will also analyse the use cases and adoption potential of ETZ tokens.

What is EtherZero?

As mentioned, EtherZero was created as a fork of Ethereum with the stated aim of becoming the next generation smart contract platform to give dApp developers and users a better service.

According to the website, which provides very little actual details about the project, the project was initiated by a group of professional and technical geeks looking to provide a better platform for dApp creation and smart contract deployment.

What is EtherZero
EtherZero Fork Date and dApp Ecosystem. Images via EtherZero Blog

EtherZero is presenting itself as different from Ethereum in a number of ways. The team is reducing block time to 1-2 seconds, has eliminated transaction fees, and will support a feature called instant pay. The EtherZero platform also supports the use of masternodes and claims it can scale to more than 10,000 transactions per second versus Ethereum’s dozen or so transactions per second.

EtherZero distributed ETZ tokens on a 1:1 basis to holders of Ethereum at the time the blockchain snapshot was taken for the fork. However, the supply of ETZ is roughly double that of ETH. According to the official FAQ from the distribution, and as we reported previously:

The initial total supply is about 194 million ETZ. Each ETH holder receives 1 ETZ for each 1 ETH , total 97 million ETZ, and another 97 million ETZ is reserved for late development and foundation operation by the team.

I’ll get into more details about this distribution model later in the article.

EtherZero Technical Details

EtherZero was created as a smart contract development platform with unique and expanded features compared with its predecessor Ethereum. These unique features include zero transaction fees, the use of masternodes rather than proof-of-work mining, higher transaction processing capabilities and nearly real-time transaction processing.

All of this came about based on the knowledge of masternodes and PoW double-layer networks, as well as the distributed autonomous architecture of DASH and the Clique protocol being used by Ethereum’s Proof of Authority2 consensus mechanism.

EtherZero Key Features
Key Features of EtherZero

With constant evolution and improvement as one of the stated goals of the EtherZero project, the development team used its knowledge to create a new consensus mechanism they call Masternode Proof of Stake, or MPoS.

The team believes this consensus is a better way to serve the needs of dApp developers and users, as well as providing enhanced security for the blockchain and network.

Currently called EtherZero 2.0 it is a double-layer network structure using masternodes and a Proof of Stake two-layer consensus. This is an improvement over EtherZero 1.0 which used Masternodes and Proof of Work and was more susceptible to hacking and other network attacks.

It’s clear that MPoS makes block generation and verification more secure and reliable in the following ways:

  1. Masternode owners must lock 20,000 ETZ to become a primary node;
  2. Every 10 minutes 21 nodes are randomly selected to pack blocks;
  3. Each 10 minute round sees the 21 randomly selected nodes become a block-out committee, which prevents a block from being repeated within 10 seconds.

These block-out rights granted to the main nodes in an MPoS consensus system is average, and this helps remedy design flaws in standard PoS consensus. Most notable is the ability of MPoS to suppress the tendency towards centralization is other PoS variants.

EtherZero Network Architecture
The EtherZero Architecture. Image via EtherZero Whitepaper

When looking at the scalability and efficiency of the blockchain, the MPoS consensus mechanism introduces masternodes innovatively and the masternodes replace miners from the PoW mechanism. Masternodes can work collaboratively on verification of transactions, packaging blocks and broadcasting to the network.

EtherZero is superior to EOS because their masternode requirements don’t reach the level of a data center, instead, any general cloud-based service will be sufficient. These reduced masternode technical requirements mean that the network can become more decentralized since it is more accessible.

It also means the network remains more transparent, and improves scalability, security, block generation times, and the success of block generation when compared with other public blockchains.

The EtherZero Team

There is no mention of the EtherZero team on the website, but there is a section of the white paper that has been devoted to the Core EtherZero team and to the Supporting EtherZero team.

It appears the core team is primarily based in China, but supporting team members are scattered all across the globe, from Australia, Japan and Indonesia, to Russia, Germany, Cameroon and the U.S.

The founder and Team Lead for the EtherZero is known as BeFree, aka Gary Luo. He came up with the initial concept for EtherZero and assembled the team to make it a reality. He is a serial entrepreneur, and according to the whitepaper we assume he was a college dropout prior to making his fortune.

EtherZero Team Korea
Some of the EtherZero Team Members in South Korea. Image via Official Blog

The Technical Director of the project is simply called Rolong, and he is a senior full-stack developer with more than 10 years experience in server-side development. He also has in-depth knowledge of the Ethereum blockchain and is considered an expert in DDoS protection.

The core team is rounded out by Roger Luo, who is a senior Ethereum developer, and has over 10 years in financial technology development. There’s also Product Manager Frank, who seems possibly under-qualified with two years of experience as a financial industry consultant. Finally is Mia, the Overseas Marketing Specialist who is responsible for the promotion of the EtherZero network.

The EtherZero supporting team mentioned in the white paper are spread across the globe and are primarily considered Community Manager’s and Blockchain Enthusiasts. The two exceptions are Bryan Vukich from the USA and Evgeny Egorov from Russia.

EtherZero Community Members
Some EtherZero Community Members in Country

Both are listed as Operations Consultant, and both have more than 20 years experience in IT. Bryan is a senior network engineer with experience in server and network operations, network design and security, and risk mitigation. He also has over 6 years of cryptocurrency experience as a user, miner, trader, and node operator.

Evgeny has her own telecommunications company involved in creating fully automated complex system of traffic management, online Business Intelligence, tests and routing monitoring. She also has 3 years of cryptocurrency experience as a miner and trader.

The EtherZero Community

When it comes to the long term adoption of a cryptocurrency, one of the most effective ways to spur this is through a large and engaged community behind the project. Hence, I decided to take a deeper look into the EtherZero community.

This actually appears to be quite large. For example, they have an official English Telegram channel that has over 36,000 members. I decided to jump into this to get a sense of the level of activity from those inside it.

English Telegram Etherzero
Discussion inside English Telegram

As you can see there is quite an active discussion going on within the channel as the users share information and help each other out. It is also worth pointing out that there is a Chinese Language Telegram that has over 23k members as well. This had much less activity than the English version though,.

Taking a look at their other social media statistics, they have over 14k followers on Twitter. The team only posts on their Twitter once every 3-4 days which is a bit on the low side but not unusual. They also have a Facebook although this is not as significant as their Twitter.

The ETZ Token

Because EtherZero was created as a fork of Ethereum there was no ICO for ETZ. Instead, the ETZ tokens were issued at a 1:1 ratio to holders of Ethereum at the time the snapshot of the blockchain was taken to create the fork. There is one contentious feature that was added at this point.

The developers of EtherZero released nearly double the supply that Ethereum has, reserving 97 million ETZ tokens for themselves. That’s roughly 50% of all tokens that the EtherZero team put right in their own pockets.

At the time there was a general consensus that the EtherZero project was nothing more than a cash-grab and that the development team had no intention of producing any usable blockchain technology. We take a look at the exact amount of development that has taken place below.

ETZ Price Performance
ETZ Price Performance. Image via CoinMarketCap

At the all-time high of $0.542417 recorded January 5, 2018, the 97 million ETZ tokens would have been worth more than $52 million. Even at the all-time low of $0.069670, the stake would be worth $6,757,990. At the current price of $0.282046, the developers have over $27 million.

Buying and Storing ETZ

Those looking to purchase some ETZ tokens can do so on a handful of exchanges. The largest trading volume can be found at BitMax. Other options with acceptable trade volume include DigiFinex and Hotbit.

There is also large volumes of ETZ that is being traded on BitHump, the South Korean Exchange. This means that ETZ is likely to be impacted by a great deal of the volatile news flow that comes out of South Korea.

In general though, there appears to be reasonable levels of volume for ETZ across these exchanges. This means that it could be relatively easy to execute large block positions. Of course, this is to assume that the ETZ volumes on these exchanges is fully legitimate.

One thing they can show are wallets for holding ETZ tokens. There is a web-based wallet, mobile wallets for both Android and iOS operating systems, and extensions for Chrome and Firefox.

EtherZero Development & Roadmap

It can sometimes be hard to determine exactly how much work is being done on a project. However, one of the best ways to get a rough indication is to take a look at their public code commits.

As such, I decided to dive into the GitHub of EtherZero to examine the level of coding activity in their repositories. Below is the commit activity over the past year for their top three most active repos.

EtherZero GitHub
Commits to select repos in past 12 months

As you can see, there has been a fair amount of activity in these repos by the developers. This shows that they are still building on the protocol over a year after the fork. There are an additional 25 repos but these had much less activity.

Perhaps this level of activity makes sense in the context of the broader roadmap that the team has been working on. These include the release of their Masternode PoS system on Mainnet as well as the online wallet.

Something that they are currently working on is their Star Dapp application competition. They are also going to launch a long term developer reward program which they hope will spur more dApp building activity amoung the community.

Conclusion

I’m personally not convinced that this is a project that is actually creating anything. First, there’s the huge pile of tokens that were created for the development team, and then there’s the lack of dApps for this project that was meant to improve the smart contract and dApp platform for developers.

It’s almost a full year since they launched their mainnet, and you’d think there would be a number of dApps available, but I struggled to find mention of more than a handful. Compare that with Tron, which has nearly 500 dApps after two years in existence.

Of course, the disconnect could be nothing more than a breakdown in communication. Most of the communications in English seem poorly translated, and that could be a reason why there’s little understanding of the project outside mainland China.

On a positive note, the team does provide regular updates on their Medium blog and those seem to indicate progress being made on the project. Also positive is the price behavior of the ETZ token, which has risen nearly 300% in the past month.

There’s certainly a good deal of support behind the project to produce that kind of surge. At the very least the project bears watching in the coming months. If it can begin gathering partnerships and releasing more dApps that are adopted by the community it could see massive gains.

Featured Image via Fotolia

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Posted by Steve Walters

Steve has been writing for the financial markets for the past 7 years and during that time has developed a growing passion for cryptocurrencies.