EOS uses a delegated proof-of-stake system where 21 block producers are responsible for verifying transactions and producing blocks. Transactions are stored and verified in an in-memory database called Chainbase by the block producers. This architecture allows EOS to scale transactions through parallelization across the 21 block producers, but introduces vulnerabilities since the transaction data resides in memory and block producers must coordinate to prevent issues like cartel formation or mutable transactions. Therefore, EOS implements a client-server system with a 21-server cluster model rather than a traditional blockchain architecture.