Preface: At present , the ecological progress of Ethereum Layer2 (Arbitrum, Optimism, etc.) and other isomorphic chains of EVM series (BSC, Polygon, etc.) is in full swing, and even a lot of other heterogeneous public chains are working on EVM compatible solutions and accounts compatible with Ethereum System (NEAR’s Aurora, Solana’s Neon, Polkadot’s Moonbeam, etc.).
Figure 1: EVM chain vs non-EVM chain (Polkadot)
Source: Produced by Ray @IOSG Ventures, the original picture is Getty Images (2012 Spain vs Italy)
Figure 2: The number of agreements and TVL data of each chain (2021.10.16)
Value analysis: the final outcome is uncertain, Polkadot still has the potential to become a Layer0 Meta Protocol
Polkadot seeks to be a multi-chain platform that combines interoperability and allows scalability. Existing blockchains are usually islands. For example, without a bridge, it is impossible to transfer information from Bitcoin ‘s blockchain to Ethereum’s blockchain.
Polkadot, as a “meta-protocol”, aims to connect all blockchains so that they can process information in parallel. In other words, Polkadot’s goal is to become a protocol protocol-a Layer 0 solution that connects all Layer 1 blockchains (such as Bitcoin and Ethereum) and their applications (such as ERC-20 tokens). This idea can also be called a “consensus executor”.
1. Parachain + Layer0 relay chain subverts the traditional smart contract + Layer1 chain system
Polkadot has innovated Ethereum’s smart contract + Layer1 system. We can regard Polkadot’s relay chain as Ethereum, and the parachain is similar to various business protocols/smart contracts/development tools running on the relay chain.
The most direct benefit of this is that the business agreement/Dapps can choose to run independently on a blockchain (parachain) with independent computing resources. With the support of more powerful network resources, the business agreement can be more complex and relatively cheaper. At the same time, while each parachain enjoys independent resources, it can also communicate with each other through cross-chain communication protocols.
Figure 3: Polkadot’s parachain + Layer0 relay chain system
来源：《Polkadot Prime》By Mira Christanto & Wilson Withiam
Figure 4: Polkadot technology stack architecture
Source: IOSG Ventures
2. Foresight in the cross-chain of heterogeneous information-reshaping the standard format of information transmission in cross-consensus systems
Based on the revolutionary parachain + Layer0 relay chain architecture innovation of 1.1, Polkadot’s technical team has also spent a lot of energy developing information transfer solutions between heterogeneous chains. For this reason, they have done two things: standardized information transfer Protocol XCMP + standardized message structure XCM.
Figure 5: Heterogeneous chain information transmission technology stack
Source: Polkadot wiki
3. Infrastructure-level business model innovation-Parachain auction economy
First of all, although the parachain auction is indeed a battlefield of fierce competition for capital, we must realize that the project party can indeed spend a lower cost to own a blockchain with independent computing resources to fully support the development and implementation of their own business logic.
Unlike other Layer 1, parachain developers on Polkadot do not need to worry about the security, economic costs and other issues that need to be worried about creating a chain in the past
In terms of interoperability, parachains will be able to communicate with each other and transmit information by using relay chains as information routers.
Secondly, with regard to the parachain auction business model, it is worth mentioning Crowdloan.
Ordinary users ( DOT holders): Provide DOT liquidity and have the opportunity to obtain native tokens from high-quality project parties.
Ecological project party (bidding parachain): able to obtain the first-mover advantage of project startup
Polkadot infrastructure: Obtain a large number of DOT pledges to improve protocol security
DOT pledge liquidity problem: Many people are concerned that DOT participates in crowdloan for a very long time, but there are already ecological projects that have proposed solutions. For example, Acala recently launched a product that releases parachain slots to bid for DOT liquidity-lcDOT .
In a recent interview with Chico Crypto, Gavin Wood stated that the parachain is technically ready. Proposal No. 118 has been submitted to the Polkadot Board of Directors. If nothing else, the Parachain will officially start the auction on November 11.
Although the Polkadot parachain auction has not yet started, IOSG has extensive experience as an active participant in the Kusama parachain auction. In the two rounds of Kusama auctions with a total of 11 slots, our portfolio performed well. Seven portfolio projects have already received Kusama parachain slots (Phala, Acala, Moonbeam, Astar, Crust, Centrifuge, Interlay).
Figure 6: Results of the first round of Kusama Parachain auctions
Recently there are a lot of people may say the market in recent years Against Chain Maximalism about to usher in the final movement ( Ethernet Square Department a dominant). It seems that Ethereum is now the real cross-chain universe center in Web3 that Polkadot conceived a few years ago.
However, we believe that Polkadot still has the ability to break hands with the Ethereum-based blockchains in both short-term and long-term perspectives. The reasons are as follows:
- As a witness of Kusama’s parachain auction, we can foresee that the amount of funds and participation in the Polkadot parachain auction will be larger. The reason is that compared with other chains’ ways of attracting capital, the parachain auction is a unique business in the market. The economic model is more sustainable, and the return on investment for retail investors is stronger.
It is expected that the inflow of large amounts of capital can stimulate more eco-entrepreneurs to join.
- The strong ease of use of the developers of the Substrate chain (relatively easier to write a customized blockchain), and the higher tolerance of Polkadot’s vision for heterogeneous blockchains, naturally gather a large number of loyal developer resources ( In the case that the parachain auction has not been opened, there are currently nearly 500 ecological projects, and the average annual growth rate within two years has reached 60%)
In the past three years, Polkadot has actually been doing the most difficult but very valuable thing-heterogeneous blockchain interoperability. It is impossible for any industry standard in the field of technological innovation to be formed in the short term, and the blockchain industry is still in its early stages. Although Ethereum is the current so-called industry standard in terms of the blockchain structure and personal account system, in the long run We believe that the blockchain world is still heterogeneous, so heterogeneous blockchain communication (asset circulation, information interaction) has long-term value.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/can-heterogeneous-chains-still-break-through/
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