The most important thing to understand about the Flow chain is to understand that it was designed to meet mainstream consumer needs – fast, low cost – without sacrificing security – in the long run, without sacrificing decentralization. To this end, Flow’s architects designed a multi-node architecture that separates consensus from computation.
Despite the huge transaction volume, Top Shot encountered no failures during its operation on the Flow chain. According to CryptoSlam, the number of NFT transactions processed by the Flow chain (17 million) is more than twice that of other blockchains, most of which are from Top Shot.
But Flow is designed to handle multiples of this transaction volume from different dApps – not just NFTs, but DAOs and DeFi; not just Dapper’s own development, but also by a large number of independent developers. To attract them, Flow needs to attract a large number of consumers and provide a better development experience, starting with its programming language Cadence.
All choices made by the Flow team added complexity at the outset in exchange for a better experience in the future. That’s also why Flow feels more centralized at first, but that’s not the end state.
Therefore, this chapter will dig deeper into the three main content of Flow introductory reading:
- Flow chain: multi-node architecture
- Cadence: a developer-first experience
- Consumers: A Consumer-Friendly Primer
OK, here we go.
Flow chain: multi-node architecture
Flow is a chain developed for toys, but not a toy itself. I was touched when I heard this conversation between Dete and Solana founder Anatoly Yakovenko.
Hear the joy of geeks! Both participants in this conversation have been trying to solve the same challenges and have each come up with more advanced solutions than almost anyone else in the world.
But Solana’s go-to-market strategy involves partnering with SBF and developing for hardcore traders, while Flow’s strategy involves cats, slam dunks, and credit cards, which masks a lot of the technical magic that happens at the protocol layer.We are back to the impossible triangle of blockchain.
Each new layer of public chain essentially tries to solve the impossible triangle with new and better methods, either by eliminating the need for trade-offs, or by strengthening the advantages in one corner: scalability, decentralization, and security sex.
In the article where Ethereum founder Vitalik first proposed the Impossible Triangle, he wrote that the Impossible Triangle represents the three properties that blockchains want to have (scalability, security, and decentralization), if one insists on ‘simplicity’ ‘Technology, you can only possibly have two of them.
The title of this article is why sharding is good, and the title does not at all implicitly imply that he believes that the non-trivial technique for solving impossible triangles is just that: sharding.
Like the Solana team, the Flow team believes that there are several problems with sharding, the most important of which is that sharding breaks ACID principles and therefore composability.
Sharding essentially transfers complexity to the developers and users of the application:
In a sharded blockchain, a simple user action (using a stablecoin, such as TUSD, to buy a hat for CryptoKitties) requires twelve transactions and seven blocks. In a non-sharded, ACID-complete environment like Flow, the same behavior, or even more complex behavior, only requires an atomic transaction in a block.
As the first NFT dAPP development team that requires composability, the Flow team is uniquely positioned to understand the challenges facing Ethereum from the perspective of an application developer. In addition, in addition to writing the first NFT standard and causing the Ethereum network to crash with CryptoKitties, they also developed the first consumer-grade smart contract wallet on Ethereum, which contains a lot of them that they will deploy directly on the Flow chain. Many features of the Dapper wallet.
After becoming Dapper Labs, the team hopes to cooperate with top IPs, such as NBA and NFL, to build NFT projects and blockchain games, but they know two things:
- If they bring in the huge audience demand for IP, Ethereum will collapse again, neither themselves nor others can use it;
- To attract more developers and creators to NFTs and the open world, they need to find a blockchain that is faster, cheaper, and easier to develop consumer-grade applications.
They didn’t initially plan to develop their own chain; but out of a sea of options, they couldn’t find one they wanted. So they finally decided to develop it themselves, and the Flow chain was born.
The core insight of the Flow team is that computation and consensus can be decoupled.
In simple terms, blockchain tasks are divided into two types: non-deterministic and deterministic.
Consensus, that is, reaching an agreement on the order of transactions, is a non-deterministic task and is subjective.
Calculation, that is, working out the outcome of a transaction, is a deterministic task and an objective one.
Calculation consumes more computing resources, but faces less security risk; it is easy to prove whether the calculation result of 2+2 is lying. Consensus does not consume much computing resources, but it faces greater security risks. The architects of the Flow chain realized that a more efficient architecture could be achieved by separating the two:
- Compute: run compute nodes with fewer but more expensive computers;
- Consensus: Consensus nodes run by more but cheaper computers;
Existing blockchains do not differentiate tasks assigned to nodes, so both throughput and security are limited. Flow wants to have it both ways.
As a consensus node, Dixon explained that you only need to know that the state change is valid, and you don’t need to calculate it. Similar to the concept of zk rollups.
In a technical white paper titled “Flow Chain: Separating Consensus and Computation” published in September 2019, Drs Dete, Lafrance and Alexander Hentschel explained the logic of the new architecture.
The purpose of this paper is to formalize the separation of consensus and computation and demonstrate that this approach increases throughput without sacrificing security. Unlike most existing proposals, we achieve scalability by separating concerns, in other words, our solution lies in more efficient use of network resources rather than sharding.
In February 2020, the Flow team released the second “Technical White Paper”, which explained the multi-node architecture in more detail. This time the white paper includes four types of nodes:
- Consensus nodes determine the order of transactions on the blockchain;
- The verification node is responsible for ensuring that the execution node does not do evil;
- The execution node is responsible for executing the computation of each transaction;
- Collection nodes acknowledge the existence of transactions and provide dApps with better network connectivity and data availability.
Assigning tasks to the four types of nodes was a key innovation of the Flow chain and remains so today, no other chain uses this architecture.
The figure below shows how four types of nodes cooperate to complete transaction confirmation in a pipelined manner, each node has a dedicated task and passes the task result to the next node.
My first question after reading these articles is what happens if a consensus node confirms a transaction, but it is eventually overturned by an executing or validating node? The Flow team also has a solution to this problem.
This diagram looks complicated, but it actually represents a series of checks and balances in the network, as long as one node is honest, no matter what kind of node it is, it can punish dishonest collecting or executing nodes and trigger Recovery of losses due to invalid data. The transactions in block A don’t settle until two blocks later, after all checks are done.
The figure below represents a visualization of this process:
Like in a car production plant, the entire assembly line can operate quickly and efficiently, but any node can pull the safety rope to prevent a particular transaction from going through.
Although the description of the blockchain is vague on the interface of Top Shot, its underlying architecture is always the Flow chain, and this architecture runs smoothly. In the early stages of the project, many of the nodes were run by Dapper, but over time, they became more decentralized, and now most of the security-related consensus nodes in the Flow network are run by third parties. This number will continue to increase in the future, and the Flow chain will become more and more decentralized. (You can click Flowscan to view the real-time information of the entire network nodes.)
The development principle of Flow is to maximize decentralization at scale, Dete explained, anyone with a home computer can participate in consensus or verification.
Currently, the Flow chain is secure and scalable. Over time, it will continue to be decentralized.
It seems that decentralization requires more than just decentralization of nodes; it also means permissionless deployment for third-party developers.
Therefore, in the process of developing the Flow chain, the team decided to create a new programming language, Cadence.
Cadence: Developer First Principle
As a businessman, Roham recalls that when we had only one year left on the account, my CTO told me that he wanted to develop a new programming language, and I was intimidated.
Developing an entirely new programming language not only required resources — something Dapper Labs lacked in the early days — but also meant making a huge trade-off: time.
Developers who want to develop on Flow need to learn a new language first, and existing blockchain developers need to rewrite their dApps on Flow.
The programming languages for both Bitcoin and Solana already exist: C++ and Rust. The Ethereum smart contract language is Solidity, which has also become the standard language for most Web3 applications. Many Layer 1 and Layer 2 chains are Ethereum compatible, i.e. their smart contracts are partially written in Solidity and thus can be connected to the Ethereum Virtual Machine (EVM).
Having a separate programming language and architecture means that the Flow chain is not compatible with Ethereum. It forces developers to make choices and learn. It’s a risky gamble: Even if the results are as expected, third-party ecosystems will take longer to develop. Cadence does not have rich open source resources, nor does it have a large number of audit institutions to audit smart contract code. Cadence is another reason why Flow had to be more centralized in the first place.
Nonetheless, Emilio Cueto, CTO of Cryptoys, told me that the learning curve for switching from Solidity to Cadence is very easy, and from a code perspective, the difference between the two is not that big, but from a developer experience perspective, there are differences between the two. Where the difference is, it’s often Cadence that wins.
Obie Fernandez, the founder and CEO of Let the Music Pay, developed the NFT platform RCRDSHP based on the Flow chain. He is also a fan of Cadence:
We’ve tried several blockchain programming languages, and Cadence is arguably the most developer-friendly of them all.We like its familiar syntax, and high productivity, especially when compared to Solidity.
This endorsement is very powerful. Before founding RCRDSHP, Fernandez was CTO at Andela and the author of The Rails Way, the Ruby on Rails development bible.
The magic of Cadence is that it is a programming language specifically designed for digital ownership.
Cadence is the first developer-friendly, resource-oriented smart contract programming language.
Unlike programmable money in other programming languages, Cadence actually turns money into a data type, which means it can operate on money just like regular numbers or strings. For example, unlike strings, Cadence doesn’t support direct copy-paste of currencies, which means it’s easier for developers to keep user assets safe.
The idea came at the right time. Facebook’s Libra team developed the resource-oriented programming language Move in a similar fashion.
The Flow Chain also provides a series of additional optimized experiences for dApp developers:
- The developer-friendly syntax is easy to read and, more importantly, easy to audit.
- Open source SDKs and standard libraries developed by the Flow team (such as FT and NFT standards, i.e. ERC-20 and ERC-721 on the Flow chain).
- A powerful static type system allows errors to be reported during compilation, rather than at runtime.
- Scalable smart contracts allow developers to release tagged beta versions to mainnet and find and fix bugs before completely relinquishing control of the contract.
- The Flow Client Library (FCL) simplifies the interaction between dApps and wallets without the need to write specialized code on both sides.
In addition, Flow’s minimal environmental impact—a transaction on Flow consumes less energy than a Google search—is a huge draw for developers, users and collaborators alike.
Cadence and other developer-friendly decisions made by Flow make users safer and have a flatter learning curve for new developers, which is a big advantage of Flow. But it also means making trade-offs: complexity and time.
In the beginning, Dapper only allowed teams that have been audited by themselves to deploy projects on the Flow chain.But now, as long as projects audited by well-known audit institutions can be developed on the Flow chain, and the audit fee is borne by Flow, there are already more than 50 teams that can deploy them freely. Expected to be fully open for permissionless deployment by this summer, Flow will be a key milestone worth watching.
Since Flow has not yet implemented permissionless deployment, many developers are discouraged from entering Flow. But Dete also explained the logic behind it: Because today’s network is too complex, we have to protect it.
He pointed out that early projects on Ethereum also had bugs, but since the usage was so small at the time, it didn’t matter. But with any current blockchain, the potential risk increases. Therefore, Flow intentionally chooses not to open in the short term to ensure that everything goes smoothly and opens at the right time.
When it comes to consumers, Flow makes the same trade-off.
Consumers: A Consumer-Friendly Primer
Starting from the protocol layer, Flow simplifies the process of developing products that protect users’ security and provide a convenient experience.
For example, Flow advertises human-readable security, which means wallet developers can tell consumers in plain language what permissions are approved when signing transactions.
When I log into Matrix World with the Blocto wallet, the approval page clearly shows what I authorize – you are signing to approve the transaction fee – free (subsidized by Blocto) – and lets me know that a script is currently running so I can check. The page is clear and easy to understand.
Human-readable security helps avoid hacks like the recent OpenSea hack, which exploited the fact that users approve transactions without really knowing what to authorize. Find out why. Human-readable security is therefore essential to attract mainstream users. Taking history as a mirror, mobile apps didn’t really take off until Apple guaranteed the security of downloads. In the world of Web3, this is even more important due to the existence of a lot of money.
Additionally, Flow allows users to apply for wallets without having to store or memorize 12 or 24 word mnemonics, which is equally important for mainstream users to get started. Compared with other wallets, the experience of Flow wallet is more like an ordinary consumer-level application, but at the same time, it allows users to upgrade to a more advanced experience.
Top Shot originally integrated a custodial wallet within a private interface, and Dete explained that our new products, such as NFT All Day and UFC Strike, use FCL, which is an open interface. Top Shot now also allows users to transfer assets to non-custodial wallets. But we believe that users do not need to apply for a non-custodial wallet every time to participate.
Instead, Flow wants to give users choices.
Some users always want to pay with a credit card and escrow the NFT or token to the wallet developer.
Other users want to log in, pay for, and deposit NFTs and tokens with non-custodial wallets, such as Blocto, the most popular third-party non-custodial wallet on Flow right now.
The Flow team also believes that some users want to start with custodial wallets and a more centralized experience, and gradually transition to non-custodial wallets. Some of them will want to cross-chain assets to other chains through cross-chain bridges or wormholes.
Flow hopes to meet the different needs of consumers at various stages and support the various scenarios mentioned above. In the final analysis, Flow is gradually decentralizing itself and its users in an incremental way.
A lot has been said, so I want to pause and give you a framework for thinking about Flow.
Among the classic treatises of Web3, one of my favorite books is Progressive Decentralization: A Handbook for Cryptographic Application Development by Jesse Walden. In the book, he proposes that a successful blockchain application requires three elements:
- Product suitable for the market
- Community Involvement
- community ownership
The following table provides a quick reference:
Of course this manual is more applicable to applications, such as decentralized applications (dapps) that have been transformed into DAOs. The blockchain should have a higher degree of decentralization.
While I’ve blurred the technical definitions a bit, and Flow is decentralized in every way from the table because it has issued a token and the network isn’t controlled by any one entity, Flow is on every level Both show progressive decentralization:
- The blockchain is gradually decentralizing. More and more ordinary people are running consensus nodes on low-resource hardware, and the number of consensus nodes controlled by Dapper Labs has dropped to less than one-third.
- Development is gradually decentralized. From the beginning, it was completely developed by Dapper, to open to developers who passed the Flow audit, and then only to be audited by an audit agency authorized by Flow, and finally to this summer, the license-free deployment was completely realized.
- The user experience is gradually decentralized. The user experience is better, and users can abandon custodial wallets and choose to use non-custodial wallets.
Flow’s decentralization is fluid and dynamic, not static or immutable.
The usage scenarios on Flow also reflect this dynamic process.
Dapper Labs built Flow to serve gaming, media, entertainment, and the open world. NFT is just the first instance, and the usage scenario requires more Lego bricks to combine.
As a result, the DeFi (decentralized finance) project Flowty was launched in early February. This is a P2P NFT lending marketplace, and 65 loans have been reached so far, with a total amount of more than $300,000. The largest deal to date involved a $50,000 loan for a LeBron James Cosmic Top Shot Moment card. Flowty is also gradually decentralizing: at first it only supported high-value Legendary NBA Top Shot assets, and later it began to gradually open up to more Flow collectibles. Other DeFi projects, including decentralized exchanges, will also gradually come online. These projects do not focus on attracting insiders, but on building financial architectures that serve NFTs, games, and the open world.
Entering web3 from DeFi may not be suitable for ordinary people, but the Flow ecosystem starts from NFT and gradually transfers to DeFi, allowing ordinary people to enjoy the benefits of the financial system on the chain. step by step.
The DAO is also about to go live, and this work will be handled by the Dapper Collectives business unit, starting with Brud DAO. In October 2021, Dapper acquired Brud, the operating company behind virtual influencer Lil Miquela. Not only did the acquisition bring the first DAO to Flow, it also gave Dapper a web3-native entrepreneur who built one of the most successful Ethereum projects.
Acquire Brud and decentralize it
Dapper’s entry into the DAO was due to the frequent setbacks of Brud’s founder’s progressive centralization efforts, which is not surprising given that progressive decentralization and complex communities have run through Dapper’s development.
In 2016, Trevor McFedries founded Brud with the aim of creating a new model of digital storytelling based on community-owned media and co-building the world. This is exactly what Flow expects. Brud’s flagship virtual idol, Lil Miquela, has more than 10 million followers on social media, and interactions with fans help to flesh out the character’s profile.
When Trevor chatted with me, Dapper bought Brud because he was trying to turn Brud into a DAO, but the board disagreed. For several years, he has been advocating to the board that the company should turn to the community, but they are skeptical about cryptocurrencies and have little interest. One of the board members told him that the last time they invested in the token was declared invalid by the SEC (US Securities and Exchange Commission), so they did not want to repeat the same mistake.
But Brud’s purpose is to build characters, stories, and worlds around community, and Trevor believes that community ownership is the only model that works for a company’s business, so he never gave up on his ideas. Realizing the futility of persuasion, Trevor decided to let the facts speak. One of the purposes of launching FWB was to make the board realize the enormous value of DAOs.
FWB stands for Friends With Benefits, a cultural-focused DAO launched by Trevor in September 2020. It turned out he was right. A year later, in September 2021, FWB received a $10 million investment from a16z. While the Dapper team popularized NFTs, Trevor and FWB popularized non-DeFi DAOs.
The success of FWB and the growing DAO craze finally convinced the board that decentralization was the right choice. But many people on the board were limited by fund document restrictions and couldn’t hold tokens, so they asked Trevor to find cryptocurrency investors and buy their stakes in the company. After preparing the relevant documents, Trevor began contacting investors, including Roham. Both Dapper and Roham were active in the web3 investing space, but after Trevor and Dapper got in touch, he changed his mind:
No one is better at building next-gen experiences than you, and we both believe in a multi-chain future. Why not choose us? You create tools for the Brud community, but on Flow, you create tools for everyone.
The deal didn’t happen right away because Trevor needed to make sure that Brud and Dapper were a cultural fit. After several rounds of contact between the two teams, Trevor found that the two companies were a good fit for each other.We are an artsy emo, a bunch of super friendly smart Canadians.
In October 2021, Dapper Labs officially acquired Brud and announced the establishment of Dapper Collectives, with Trevor serving as the CEO of the department. Dapper Collectives is dedicated to paving the way for the decentralization of social media on Flow and the democratization of online communities of common interest, ensuring that the creator community captures value.
Fred Wilson of USV describes the initial work that Dapper Collectives is about to do in his blog post:
- Starting with Lil Miquela and her 10 million fans, Dapper Labs’ products are given two major features, community ownership and co-construction;
- Create and publish open source tools to allow other mainstream communities to enter the Flow blockchain for decentralized ownership and decentralized governance;
- Help the most visionary web2 companies to achieve decentralization of operations, carry out CEO and board level interactions, and provide assistance in token economics and technology implementation.
Roham said that DAOs are the most interesting area after NFTs in the process of relying on mainstream adoption to achieve the goal of having a cryptocurrency wallet in every pocket.
For Trevor, it was also an opportunity to rethink the DAO and online communities:
- What voting mechanism should be created for decision making?
- How to make everyone a creator?
- What would a friendlier front-end for multi-signature wallets look like?
- How can multiple groups use time and origin information to tell stories together on the chain?
- Characteristics, not commonalities, should drive the Metaverse, shouldn’t it?
On the last question, Trevor explained: People don’t move to New York because of the architecture, although the architecture in New York is beautiful. They are attracted to the people of New York: they are here to fall in love, work for money, and enjoy life.
Although crypto and NFT are terms coined by the Dapper team, Top Shot did not. Like Top Shot, Dapper Collectives have the opportunity to create a new set of terms for online communities (shared by community members). For example, they did not use the name Dapper DAO.
Trevor admits that the word ‘governance’ makes me lose my enthusiasm for participation. If you were a 13-year-old, would you want to be involved in ‘governance’? I have no idea
As with creating a new blockchain or a new programming language, rethinking how early adopters understand DAOs can lead to slower adoption and time-to-market in exchange for better long-term solutions.
Move forward slowly and strive for victory with stability.
When I asked when Brud was going to be decentralized, Trevor replied that by convention, Brud will become the first DAO of Dapper Collectives after decentralization, and then open to partners and third-party groups. This statement also reflects the style of the Flow team.
The reason why the Flow team is doing things this way is that nowadays everyone is saying we started early, but the Flow team thinks they are the first to start.
Young users and true network effects
To understand why Flow chose its current strategy, we can look at what Dete said about network effects:
Before the iPhone, everyone thought Palm or Blackberry had network effects. You only get real network effects when you do it at scale.
He pointed out that while everyone is obsessed with Ethereum’s network effects, most of the money spent in the web3 space is on Ethereum, but there is no loyalty to money. Liquidity is at your fingertips. Users and developers are sticky.
The goal of the Flow team is to be the first blockchain with a billion users. This amount is enough to create a network effect among mainstream consumers of a certain user group. To achieve this, a focus on differentiation and a clear focus is needed.
Dete believes that Flow will not be the next giant DEX (decentralized exchange) chain. Likewise, he believes that Ethereum should not have a billion users, because that is not what Ethereum was created for. As mentioned earlier, the Flow team has its own concerns regarding the impact of sharding on the cooperation and composability required to build a truly networked world.
To get to a billion users, Flow has two strategies, one for the present and one for the future.
Now, Flow is working with popular IP owners (and developers focusing on mainstream platforms), including the NBA, NFL, La Liga, to bring more people into Flow’s ecosystem and web3 space. “It’s not about stealing market share, it’s about building a product that a billion people want to use,” Dete said. After reaching a billion users, it is up to Flow to retain and gradually optimize their experience with web3 tools.
In my opinion, the multi-line layout in the future is Flow’s biggest differentiating advantage and secret weapon.
First, Flow created its own blockchain and programming language to attract web2 developers new to the web3 space who are still evaluating the merits of each ecosystem. The Flow team believes that it is difficult to get web3 developers to abandon the programming languages and ecosystems they already use, but web2 refugees are most likely to settle on Flow because they are learning a new programming language anyway, for a few Billions or billions of people building experiences is their forte.
Second, and most importantly, Flow is the only blockchain focused on young users.
One of my favorite strategies is to leverage the compounding power of younger users, which is not something that many businesses do.
This strategy focuses on delivering the best possible experience to the youngest cohorts in the target market, understanding and retaining them as they age, while continuing to focus on serving the newest cohort. The problem is that in the short term, they are not the group with the highest level of consumption or the most profitable group, but if you can keep them long-term, the future will belong to you.
That’s Stripe’s strength (its founder, Patrick Collison, developed the idea of a time horizon that helps create a competitive advantage), and the company focuses on startups rather than large corporations, and grows with them. This is also Snap’s strength. Over the years, there have been comments that Snap should simplify the product for older, more wallet-friendly groups, but Snap has managed to gain dominance in this segment by insisting on creating the best experience for younger users.
This is exactly what Dapper wants Flow to achieve. Cryptocurrencies are currently concentrated on Ethereum and on chains that are compatible with the Ethereum Virtual Machine (EVM), but it is still unclear who will be the next billion-user application.
After talking to Trevor this idea struck me. The Miquela he created for the teenage audience has attracted 10 million fans, which shows his understanding and intentions of this group. Whether it’s building a more accessible new vocabulary or building the Flow tool, it reflects his attitude:
What we’re doing is like safer Lego bricks. Ethereum is not that easy to mess up, if you screw it up accidentally, you have to face real financial consequences if you screw it up. If you want to unlock the future group of 1 billion people, you have to let 13-year-old children study cracking and e-commerce. They cannot be prevented from playing because they are afraid or have no money.
It’s young millennials and Gen Z that are dealing with DAOs these days. The younger Gen Z are still on the sidelines, they can’t play Ethereum, and the mere $20 pocket money is not enough for gas, so it feels like a blank space.
He wants to broaden the definition of a tech entrepreneur: from the traditional 22-year-old Stanford Computer Science (CS) graduate to the creator and the ardent fan.
We want to give 15-year-olds who fry their shoes the tools to dare to say: why don’t you try this instead? ‘Want to provide tools for YouTube masters to model themselves. To put it bluntly, we just want to provide the tools and design space that people can do with confidence.
I’m getting old, and I don’t want to admit it, but the facts are the facts: the next wave of mass-consumption hits can’t come from our generation, nor can it be built for our generation. What Flow, along with its ecosystem, is focused on is the next generation.
While Trevor and the Dapper Collectives team are immersed in building tools for younger users, third-party entrepreneurs are also creating products, experiences and worlds and integrating them on web3. The two most frequent third-party dapps built on Flow target very young users: Genies and Cryptoys.
They give a good flavor for the kinds of projects enabled by Flow. Let’s look at each quickly.
These two examples give a good explanation of the types of projects that Flow supports. Here is a brief introduction to each of them:
My friend’s nemesis said that Flow was a mediocre person in the blockchain, and then sent a message saying: I asked NFT people I know, and they said that they haven’t heard much about Flow in recent months, but there is a man called Genies’ projects are built on it, and Genies looks good.
Akash Nigam and Evan Rosenbaum founded Genies, a non-encrypted avatar company in 2016, with a mission to do digital identities for humans.
For its first five years, Genies focused on allowing users to create custom avatars and express their individuality by dressing them up with a wide variety of clothing and accessories, including a collection in collaboration with Gucci. Users can use their avatars in apps like Instagram, WhatsApp, iMessage and Giphy. Genies has also partnered with celebrities like Justin Bieber, Cardi B and Dapper Labs investor Shawn Mendes to create virtual avatars.
Last May, Genies announced the creation of an NFT marketplace on Flow as the popularity of NFTs climbed, and just raised $65 million in funding from Bond company legend Mary Meeker.
I asked Akash how he came up with Flow, and he said it started with a quote from Roham on Instagram:
The underlying logic of NFTs is digital scarcity, and although I’ve been discussing this topic before, I don’t know anything about NFTs. I talked about digital scarcity on Instagram Story a few years ago, and Roham saw it and came to me and said: You’re talking about NFTs. I also asked: what is that?
After talking to Roham, Akash realized that NFTs were exactly what he had been looking for. Authentication of digital assets used to be a vision of mine. I thought it would not be realized until 2025, but I didn’t expect it to happen in 2021.He looked around for the best building platform and chose Flow for several reasons:
- Flow focuses on young people rather than established web3 communities
- From web2 so it’s easiest to use as a base
- Allows users to author NFTs and evolve their avatars over time without complex destruction mechanisms
Perhaps most importantly, the two companies have similar missions. Akash said:
Dropping a $100 million NFT today is not a problem at all, but it doesn’t make any sense in moving the world forward.What really makes sense is to let children master these knowledge and operation principles, provide them with tools and gradually build their own decentralized avatar ecology. So our pricing is $3, $4, $5, $7, $10, not thousands.
Genies users are also generally different from web3 users. Akash told me that girls aged 14-16 make up the majority of Genies users. They can get a lot out of NFTs, but you have to speak a language they understand to make them creators.
Genies has also slowly moved towards decentralization from the initial centralization. In January, the company announced a further extension of its mission: to empower people to create their own digital identity ecosystem. Effective immediately from ownership: Every creator (including artists and users) owns their Genie now, and will extend in the future to include tools and materials for creating virtual worlds and digital experiences, all proprietary and commercial All rights belong to the creator.
Genies has all the Flow needed to realize its vision: scalability, accessibility, composability, and decentralization to ensure that its creators are not arbitrarily de-platformed. If you want to create a world, you must be sure that the foundation stone under your feet will not disappear.
Genies NFT is scheduled to go live on Flow this summer.
Cryptoys is built for a younger audience.
The company’s original idea was to be a digital-first toy company, but then it has original IP, games, toys, and more, and it looks more like the NFT-native Nintendo.
In October, a16z led a seed round in OnChain Studios, the parent company of Cryptoy, with a total investment of $7.5 million. Dapper Labs participated in the investment.
Will Weinraub, co-founder and CEO of Cryptoys, told me that they initially started following Flow because they believed the NFT bull market was thanks to Top Shot and Dapper Labs. “Although Top Shot doesn’t mention NFTs, they lower the barrier to entry, and users just need to follow the trail and explore on their own.
Just as NBA Top Shot did for fans, Cryptoys hopes to provide a similar experience for kids and gamers. We want parents and grandparents to buy Cryptoys as Christmas gifts, and from that perspective, Flow is the perfect fit. “
More specifically, Cryptoys chose to build on Flow for several reasons.
First, the impact on the environment is key. Cryptoys wants to work with big brands, and Flow’s minimal environmental impact makes it attractive to those brands. Gamers are notorious for hating NFTs because they are concerned (often due to insufficient information) about their environmental impact.
Second, Emilio Cueto, co-founder and CTO of Cryptoys, explained that composability is necessary for Cryptoys. Every Cryptoy has a bunch of layers of properties that represent what that Cryptoy owns. “If you put a hat on a panda,” he emphasizes, “the panda has the hat. If you sell the panda, you can sell the hat together in the same transaction.” This isn’t just for clothes. Every Cryptoy will have built-in skills that can be changed, evolved or learned over time.
The composability design on Flow makes composability easier to achieve on Flow than on other chains. Since Cadence is a resource-oriented programming language, one resource can own another resource, making it very easy to combine different assets in code. On Ethereum, to achieve this, you need to destroy the original panda and hat, and then generate a panda with a hat, rather than simply put the hat on the panda’s head.
I asked Will and Emilio bluntly if they would be concerned about betting the company’s prospects on chains other than Ethereum and Solana, but they didn’t seem concerned. They say it’s only a matter of time before Flow explodes.
Flow is on the rise and it already has a huge number of users. The reason most people don’t see this yet is that projects on Flow are more interactive and naturally take longer to develop.
Repeating the same old tune again: the higher the upfront complexity, the better the experience over time and the richer the world it will shape.
Cryptoys hopes to make it possible for the youngest users to enter the web3 unconsciously and naturally. In fact, most Cryptoys users will probably never call it web3 (until some of them start writing articles comparing web4 to web3); they just look forward to it, and build it with ownership, composability and fun digital items.
Overall, this is what the Flow team hopes to achieve: build a more durable platform that delivers better, richer experiences to consumers at scale. They add complexity up front, then hand it over to time. Such an approach is obviously risky.
Risks and trade-offs
I want to make this clear, neither in this article nor in the history of Not Boring I think there is no perfect blockchain, no one blockchain can rule the others. As I’ve said many times, I’m a maximalist minimalist.
I hope it’s also clear to everyone what I see as the biggest risk to Flow right now. We’ve been discussing trade-offs throughout this post.
- Complexity means it takes longer to achieve maximum decentralization
- Developing for mainstream consumers or crypto-native users requires different things
After spending a few hours with the Flow team and the participants in the ecosystem, I believe they have a clear understanding of everything and are satisfied with the status quo when making trade-offs. Still, such a trade-off carries risks.
First, Flow has been quiet in an industry dominated by momentum and narrative. Many of the people I interviewed pointed out that at the beginning of last year, Solana and Flow seemed to be vying for the position of the second public chain, but now Solana has pulled the distance.
I don’t think a single developer on Flow would see Solana as a competitor. The two target different audiences and do very different things. But there is no doubt that Solana has attracted more attention from the community and more third-party developers. By. A big risk for Flow is that they can’t make it clear to people why they want to go the other way. They want to change the meaning of the cryptosphere, but that means adding another layer of complexity and education to an already daunting challenge.
Also, correct or not, what people see with Flow is that it is more centralized and permissioned than other blockchains.We’ve discussed in detail why Flow makes these trade-offs, but to win over more native crypto-industry developers, the team needs to change that label. It’s just a matter of riding the wave and sticking to the developer’s schedule. In Nike’s words: Victory settles everything.
Second, Flow needs to solve the funnel problem. After attracting users through a project, it needs to have more ways for people to continue to participate in the entire ecosystem, thereby creating a real network effect. Undoubtedly, this means that the Flow ecosystem needs to be continuously developed, but it also means that the different dApps in the ecosystem need to be opened up and united. This work is often done by tokens.
In the case of Flow, to simplify the onboarding process for new users, it opted to set prices in U.S. dollars and allow users to pay with a credit card. But I think it needs to find a way to increase the usage of FLOW token in the ecosystem. The value of the FLOW token comes from the use and pledge of developers, but it can also be used to connect this increasingly rich ecosystem of dApps. Pricing with FLOW means that consumers are less likely to sell crypto assets and leave with dollars in their hands, as they are currently doing.
There seems to be good news in this regard:
Finally, Flow also needs to catch up in terms of ecological construction. I sincerely believe that Flow’s architecture and its strategy of progressive decentralization (allowing developers to build complex interactive user experiences) have huge advantages, but the more centralized and permissioned start comes at a cost.
On other blockchains, anyone can go into development and deploy to the mainnet, whether the end result is good or bad.The good thing is that 18,146 active developers per month can come in, develop or upgrade the app without requiring a lot of work from a centralized team. This might be the case when Flow becomes fully permissionless this summer, but it needs to hit that milestone first and renew developer interest. Because while time is one of Flow’s great strengths, it’s certainly in a race against time.
Whatever the problem, with enough money and enough smart people, it will be solved in the long run. Other blockchains can take advantage of this to improve at the application and second layers. Flow is betting that these issues are best addressed at the blockchain layer, rather than leaving developers to find workarounds. But given enough time, developers will find clever workarounds. The Ethereum and Solana ecosystems can handle more scenarios every day, and better.
Flow needs to win over the next wave of developers from Web2, which requires changing the narrative to reflect reality and build momentum.
Nonetheless, when I spoke to Layne, Flow’s head of product, she disagreed with my definition of ecology, arguing that a vibrant blockchain ecosystem should allow people to spend quality time with friends and experience the Something you can’t experience anywhere else. Having developers develop is only a small part of it.
Even the coolest playground isn’t fun without tourists. No matter how well-designed a product is, it is useless without users. Flow believes that a consumer-friendly blockchain ecosystem is defined by unique experiences within it, which ideally should be additive.
The unique experience also drives Flow’s token economics.
Flow’s Token Economics
Having said all that, we haven’t discussed much about the value of the FLOW token, because until now, the token has not been an important part of the overall narrative. The price of the FLOW token has fallen 85% since the spring Top Shot high.
As of February 5, 22, the price trend of FLOW on CMC
But the Flow team doesn’t seem to be really worried about that. Layne explained that the currency that people really need must have an indispensable use case. Like many other things, the value of the FLOW token will depend on supply and demand.
Let’s start with the supply side of the analysis.
Flow is a proof-of-stake (PoS) blockchain. In other words, all nodes must pledge FLOW tokens to participate in the network and receive FLOW token rewards (if they do evil, their pledged FLOW will be confiscated). Due to the multi-node structure of the Flow chain, the relative benefits of the four types of nodes will change dynamically to ensure the balance of the number of nodes. According to the “Flow Token Economics White Paper”, the target ratio of each type of node is as follows:
Token Economics of FLOW
According to Flowscan data, 391 nodes in the entire network have pledged a total of 722 million FLOW tokens, and the number of consensus nodes with low hardware requirements is slightly higher than the target value, reaching 207, accounting for 52.9% of the total nodes.
Although there are currently only 207 consensus nodes, the architecture of the Flow system ensures that it can support tens of thousands of consensus nodes in the future. At this critical level, Flow can achieve a great degree of decentralization.
Validation nodes are responsible for maintaining network operation and security, and are rewarded with FLOW tokens issued by inflation. The initial issuance of FLOW is 1.25 billion. In the first four years, the total supply is expected to increase by 162 million, which is an inflation rate of 13%. These will be used to incentivize pledged verification nodes.
At the end of the day, Flow’s token economics are pretty straightforward on the supply side. It is a low inflation PoS chain.
The demand side is more interesting. The demand for FLOW tokens is in many ways directly linked to the products needed to create users based on Flow.
The first is transaction fees. Flow charges users or the dApps they use two fees:
- Transaction fees include the cost of submitting the transaction to the block and packing it
- If there are more complex calculations than updating the balance, there is also a calculation fee
While inflation increases the supply of tokens, transaction fees effectively reduce the supply. The fee charged by the network as part of the reward payout for each cycle. The higher the fee, the less FLOW that needs to be minted (that is, the lower the inflation rate of FLOW).
In addition, creating and storing assets also requires a FLOW balance in the account, thus forming a demand for FLOW.Accounts need to have a minimum account balance to pay for storage. The current storage fee is extremely low, only 0.04 FLOW (about $0.2272)/400KB, which is borne by the Flow vault. Storage fees also rise as users own and store more assets.It’s important to note that developers can pay for their users, and they often do. For example, the Matrix World I showed earlier.
On a technical level, this is the current FLOW token economics mechanism: more quality products – → more usage and storage → higher fees and higher balances → less (no) inflationary FLOW tokens multiple needs
The good news is that Dapper Wallet will soon begin to fully support FLOW tokens.
Users will be able to hold, earn and spend FLOW. In addition to US dollars, people can also buy NBA Top Shot NFTs through FLOW tokens. At the very least, use FLOW to save ~5% on credit card fees. It is not difficult to imagine that Flow will provide special rewards and subsidies for users who pay with FLOW tokens, thereby incentivizing their use.
With top IPs such as NFL and La Liga establishing partnerships with Flow, Flow will bring more people to the ecosystem and motivate them to spend with FLOW tokens, which will create more demand for the limited FLOW supply.
As more crypto-native games and virtual worlds like Cyptoys, Genies bring a new, younger audience to Flow (and their parents’ money), this will create more demand for the limited FLOW supply.
As more and more people use FLOW tokens to earn, hold, pledge and trade, it will create more motivation for people to stay in the Flow ecosystem and help Flow attract more developers and new users Wait.
At this point, the most complicated part is introduced. Next, let’s talk about what milestones Flow has reached.
Milestones for Flow
For a long time, Flow made a series of unobvious bets.
- It has developed a blockchain designed to sustainably support a complex, evolving world over the long term.
- It designed a completely new multi-node architecture and developed its own programming language from scratch.
- It focuses on mainstream consumers and children, not crypto users.
- It redefines the concept of decentralization, including accessibility, not just initial node distribution.
From the results, while other public chain ecosystems have flourished in the past year, Flow has also experienced a brief explosion of its application product NBA Top Shot. But the unintended consequence of this differentiation is a reduction in its relevance to the market.
Because in the past few months, as other Crypto markets continued to decline, the trading activity on Flow started to pick up instead.
February was the best month ever for trading volumes. With the launch of new projects (such as NFL All Day, FanCraze, UFC Strike, etc.), the transaction volume exceeded the peak transaction volume in the spring of 2021 by nearly 50%, and the transaction volume exceeded 1 million on two dates:
Last week, Gaia, the NFT marketplace on the Flow ecosystem, reported $6.2 million in transaction volume, ranking fourth compared to other NFT marketplaces tracked by Dappradar.
Flow is also becoming more and more popular among various unicorn companies. Animoca and PlayCo have successively built games on Flow. The web3 native decacorn (startup project with a valuation of over 10 billion US dollars) companies Alchemy and Circle are also Develop support for Flow. Fancraze Cricket NFT, officially licensed and backed by a strong background, has attracted hundreds of millions of ardent fans of the ICC league that has taken India by storm.
Flow is continuing to attract more mainstream giant brands. In December 21, YouTube also airdropped Flow-based NFTs to top creators on the platform
…and at the Super Bowl, Ticketmaster airdropped commemorative tickets to all attendees via Flow:
TicketMaster’s NFL Super Bowl Ticket NFT
Youtube and the Super Bowl are relatively small-scale tests, but they represent an opportunity to enter a huge future market through practical use. Imagine if TicketMaster were to distribute tickets as NFTs via Flow, or if YouTube were to partner with Flow to let creators mint popular videos and sell them to fans, a move that would maximize the economic value of creators and subtly Get more people to join web3.
All of these partner-driven events are starting to attract dozens of community-built projects such as Matrix World, KLKTN, Flovatar, Chainmonsters, Emerald City, Mantle Finance, Zeedz, Legaci, The Football Club, and Ballerz, to name a few. These projects grow and develop independently without much involvement from the Flow team (although Zeedz was founded by a former Dapper Labs team member who left the underlying public chain and chose to build an ecosystem, which is also building an internal empire on Flow a good signal). It can be seen that the ecological network effect of Flow is beginning to appear.
Matrix World is building a cross-chain based on Ethereum and Flow public chains
Flow is at an inflection point right now, and maybe everything will happen naturally this summer:
- Dapper Collectives will release its first DAO tool and start supporting the ecosystem and community on Flow.
- Genies will go live on Flow and everything they build will be owned by the community. Maybe someday, its company will also be decentralized on Flow
- Dapper Wallet will be open to all third-party developers for integration.
- Dapper Wallet and all Dapper projects and possibly many projects developed by third-party developers will support FLOW.
- Flow will enable permissionless deployment, unleashing a wave of unlimited creativity.
Once the last two visions are completed, Flow’s goal of full decentralization will take a qualitative leap.
However, in the long run, in order for Flow to meet its architects’ own definition of decentralization, the most important thing will be to ensure that hundreds of millions or billions of people can build, hold, interaction, and lasting development.
What would the world look like if it succeeded?
It is unimaginable when millions of users and creators program currencies, combine digital assets and create open worlds and communities based on specific applications. But that’s the wild beauty of innovation and composability.
But, as the Flow team envisions, a world in which people owning their digital assets is as smooth and taken for granted as owning their physical assets. A world where people shape the platforms they use and benefit from collective success. In this world, people have the ability to not only create content or products, but also the economies that surround them.
If it takes several years of focused effort to build a richer decentralized future for billions of users, then that’s the tradeoff the Flow team is willing to make. We can see that there is still a long way to go to achieve such a decentralized future. But if anyone can do it, I firmly believe that the Flow team will be one of them, and they will continue to prove in the future how to bring the people of this world into the future of Web3.
Perhaps the biggest arbitrage in the crypto world is getting rid of distractions and sticking to yourself.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/a16z-consultants-deeply-analyze-the-strategic-blueprint-of-the-mainstream-blockchain-flow-ecology-below/
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