EVM network effects: why the EVM may be more important than Ethereum itself?

Potential challenges for L2 EVM composability

Some Layer 2 networks are currently trying to convey the idea that they may soon break equivalence with EVM at some point to try something that only makes sense on L2 or will take a long time to integrate with Ethereum L1 function. In a sense, we may be entering a world where the L2 EVM is implemented slightly differently and becomes a testing ground for new EVM features. This may break the deployability of 1-1 code at some point in the future.

That being said, as long as the state between layers remains composable, L2 is unlikely to subvert the EVM equivalence, typically keeping execution properties to a minimum when bridging data between chains. And as long as an adapter can be written on the other end, and the state format is reasonable between the two chains, small differences in execution probably won’t be a hindrance.

Non-EVM chain

What does this mean for competing chains and ecosystems? They will require a large budget and will have to find a way to serve the EVM audience. The ecosystem model can work if non-EVM projects can grow quickly and efficiently. Solana is one of the competitive challengers, but despite spending a lot of money to catch up, applications are still slightly lacking.

Of course, there are many things that the EVM can’t do, and there will be applications that will only be used long-term outside of the EVM and that will bring value to other VMs as well. It is worth noting that some unique projects have started to choose a different solution than EVM, for example, Stepn is on Solana. This may be evidence that EVM is not a winner-take-all, and there will be many applications out there. It’s worth mentioning that the same is true for JS, but the number of applications that cannot be built with JS in the browser is declining every year.

Cross-chain and Parachain

The composability-first approach of Cosmos, Polkadot, and other blockchains has won over capable builders and users. Although many years behind the EVM ecosystem, the Cosmos SDK enjoys very similar network effects, but most composability is asynchronous, meaning it occurs in multiple steps with various validations. As of now, Cosmos does not have the same address for cross-chain accounts, although this will change soon. CosmWasm is very new and the ecosystem lacks important mechanisms such as a robust oracle solution for DeFi. For example, JunoSwap (AMM on the Juno Chain) launched several months late, and the code is messy and incomplete.

Solutions like Celestia appear to account for these network effects, allowing Ethereum and other EVM chains to act as a settlement layer. This preserves the composability of EVM, but with more optionality and scalable security. This approach may be the subject of discussion around the L1 blockchain for years to come.

in conclusion

Developers and L1 competitors should seriously consider the huge advantages of building on EVM today. In most cases, I expect existing EVM chains or L2s to be sufficient for most needs, although they may require specific features that EVM does not build on. EVM is years ahead of its competing ecosystem, which will continue to increase adoption and network effects. However, ETH proponents need to prepare ahead of time for the possibility that other blockchains based on the EVM may not necessarily trigger demand for ETH, but capture the majority of Ethereum’s market share.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/evm-network-effects-why-the-evm-may-be-more-important-than-ethereum-itself/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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