New public chain war: the way to break the game comes from top to bottom

Summary

  1. The expansion of the new public chain is a top-down path: the path from the upper-level application to the underlying technology, and the prosperity of ecological applications boosts the explosion of public chain use cases.
  2. The change in the proportion of total market capitalization reflects the distinction between Bitcoin’s original narrative and countless new public chain narratives, and is also a vote of fundamental principles and new consensus by the new funds of groups and institutions.
  3. When the ecology has a scale, the expansion path to allow the ecology to be exported to the outside is the final proposition. User retention and developer friendliness are the blood of the continuous update of the ecology, and the endogenous protocol innovation and differentiation of the public chain will become the long-term development of the ecology. The kinetic energy.
  4. The enthusiasm of the new public chain is the evolution of the existing architecture of the blockchain rather than the denial of the original system, just as productivity innovation, transparency of production relations, and full freedom of competition are the driving force behind the development of the crypto world.

Lead

Let us imagine a city: spacious roads, complete facilities but empty. This is the picture of the embarrassing period of the early public chain development, either out of excessive attention to the game of the “impossible triangle”, or out of obsession with the arms race of TPS, instead of neglecting the help of the development of ecological applications, it is inevitable to build an infrastructure A perfect empty city with no one settled in.

John Carmack, the father of FPS and a technical genius, once said frankly: Technology is always for products, and then it will be considered whether it can be used for other purposes. Focus R&D on actual products, not technical architecture or ideas. Considering the popularity and long-term planning of the technology too early can rarely bring real value, but may hinder later development.

New public chain war: the way to break the game comes from top to bottom

The number of agreements on each public chain, data source: Footprint Analytics

The John Carmack’s thoughts into the block chain industry, we can still find: DeFi evolution paradigm to promote Ethernet Square, the value of contracts intelligent discovery and EIP-1559 combustion, GameFi active conduction prosperity on data BinanceSmartChain chain, CryptoKitties once fiery The paralysis of Ethereum also led the Dapper Labs team to build Flow tailored, and after the chain game leader Axie achieved a burst of money, it also issued the Ronin public chain based on its own ecology…

It is deduced that the expansion of the new public chain is a top-down path: from the upper-level application to the underlying technology, and the prosperity of ecological applications boosts the explosion of public chain use cases.

New public chain war: the way to break the game comes from top to bottom

As of November 19, each public chain TVL, data source: Footprint Analytics

This article will discuss the road to break the new public chain, which is divided into the following three sections:

  • Representatives of Ethereum’s Layer 2 expansion solution and compatible EVM public chain, taking Avalanche, Fantom, and Polygon as examples;
  • New representatives of multi-chain ecology, taking Solana and Terra as examples;
  • New public chains with distinctive functions, take Arweave, Mina, and Shimmer as examples.

Demonstrate the value potential of the new public chain through solutions and data demonstration. At the same time, it sorts out the development logic of the new public chain from the application to the bottom layer, and explains how to better use the ecology and technology to mutually empower each other.

EVM expansion history

Accounting for 65% of all public chain TVL in Ethernet Square head advantage with industry, the Ethernet Square ecosystem contains a complete intelligent infrastructure contracts, a large developer community and continue to advance the concept and application of innovation.

New public chain war: the way to break the game comes from top to bottom

As of November 19, the proportion of TVL in public chains, data source: Footprint Analytics

When the network is congested, the block size is limited, and the excess gas is carried forward, Layer 1 solves the trust problem and Layer 2 solves the performance problem. It seems to be the best solution for the current Ethereum ecosystem. On November 21st, Ethereum founder Vitalik also expressed his gratitude to the Arbitrum community for his contribution to the development of the core part of Ethereum Layer2.

Therefore, many new public chains choose to use the Ethereum side chain or EVM compatible form to access, through quick module call and development friendly, to obtain the existing ecological advantages of Ethereum.

  • Avalanche

New public chain war: the way to break the game comes from top to bottom

Avalanche ecological map, data source: @avalancheavax

The Avalanche Avalanche Agreement released a white paper in 2018 and received US$6 million in financing from a16z, Polychain and other institutions. After completing US$12 million in private and public financing in 2020, it went live on the mainnet in September. Recently, it has won the industry’s attention again with its outstanding market performance. Focus.

Avalanche is a smart contract platform based on the PoS mechanism and compatible with EVM. It uses an original random sampling and metastable consensus protocol, and only selects most of the N nodes for comparison without the need for network verification, so as to achieve high performance in seconds. Transaction and settlement.

New public chain war: the way to break the game comes from top to bottom

Avalanche’s design structure

In terms of structural design, Avalanche innovatively adopts a three-chain architecture, through the division of functions of the three chains to achieve horizontal expansion and liberate network performance: Exchange-X chain is responsible for asset creation and transactions; Platform-P chain is a metadata chain, Responsible for platform governance, node setting and creation of subnets, currently has 1178 validators/nodes; C chain is responsible for EVM compatible smart contract functions.

The total supply of Avalanche is 720 million, and the current circulation exceeds 377 million. On November 21, AVAX quoted at US$138, an increase of 124% within 30 days, with a circulating market value of US$30 billion, ranking 10th among mainstream digital assets. In terms of TVL, the current on-chain funds are about 12.9 billion U.S. dollars. As the price of AVAX rises, TVL is also showing a rising state, and the number of daily transactions has reached about 170,000.

New public chain war: the way to break the game comes from top to bottom

Head project and TVL status on Avalanche, data source: Footprint Analytics

Avalanche’s TVL has made a significant leap since the announcement of the “Avalanche Rush” plan on August 18, which is the official launch of a liquidity mining incentive plan worth 180 million U.S. dollars. Before the plan was announced, TVL on Avalanche was only $265 million. One month after the plan was announced, TVL reached $3 billion. In 30 days, TVL has gained more than ten times of increase.

At the same time, the opening of the Ethereum cross-chain bridge Avalanche Bridge (AB), the successive deployment of mainstream DeFi protocols such as Aave, Curve, and SushiSwap on Avalanche, and the continuous increase in AVAX prices have all provided sufficient momentum for the growth of TVL. Currently, there are 72 agreements running above Avalanche, and 6 of the top ten agreements in TVL are exclusively Avalanche ecologically. Representative projects include Trade Joe (DEX), Benqi (Lending), Wonderland (Stake).

  • Phantom

New public chain war: the way to break the game comes from top to bottom

Fantom ecological map, data source: @FantomFDN

Fantom was founded in January 2018 by Korean developer Byung Ik Ahn. It is a smart contract platform based on DAG (Directed Acyclic Graph). The feature is that the more nodes added, the higher the network scalability and efficiency. The milestone of Fantom’s development is that he is compatible with the Ethereum virtual machine EVM at the end of 2019. Thanks to the modular configuration, developers can quickly port Ethereum-based dApps to Fantom’s Opera mainnet.

New public chain war: the way to break the game comes from top to bottom

Fantom’s TVL changes and the proportion of mainstream projects, data source: Footprint Analytics

The total supply of Fantom is 3.175 billion, and the current circulation is 2.54 billion. The quoted price on November 21 was US$2.04, an increase of -8.4% within 30 days, and the circulating market value exceeded US$5.1 billion, ranking 41 among mainstream digital assets. At present, 71 agreements on Fantom have brought TVL worth 4.8 billion U.S. dollars. Anyswap, Geist Finance, and Spookyswap have brought TVL worth 230 million, 100 million and 54 million U.S. dollars respectively as the top three agreements. Fantom’s TVL has grown 70 times in half a year. In addition to its own DAG architecture and choosing to be compatible with EVM, Fantom’s ecology has two unique reasons:

New public chain war: the way to break the game comes from top to bottom

Andre Cronje-founder of yearn.finance, chief DeFi architect of Fontom

One is that Fantom’s more well-known background is its “chief DeFi architect” Andre Cronje. As the founder of yearn.finance, he blessed Fantom with his personal endorsement and led the “AC series” projects to be integrated into Fontom, such as Keep3r. , Cream, Sushiswap, Year, etc. The celebrity effect has brought considerable flow and financial tilt to Fantom’s ecological development.

Second, the Fantom Foundation stated on August 30 that it will invest 370 million FTMs to encourage ecological development, and funds worth nearly US$260 million will be used to reward ecological applications with a locked-up TVL of more than US$200 million. It can be seen that after the announcement of this plan, Fantom’s market value and TVL have begun to break through.

  • Polygon

New public chain war: the way to break the game comes from top to bottom

Polygon ecological map, data source: @0xPolygon

In 2017, 3 blockchain developers from India co-founded Matic , using the off-chain computing of the side chain to provide Ethereum’s scalability solution, and announced its name change to Polygon on February 10 this year. Polygon is compatible with Ethereum EVM, supports rapid migration of Ethereum developers, and uses Plasma off-chain expansion and PoS mechanism to ensure asset security. It is called the “Indian version” of Ethereum.

New public chain war: the way to break the game comes from top to bottom

Polygon’s technical structure developed around Ethereum

Polygon’s mainnet was launched in May 2020, with a total supply of 10 billion, and the current circulation exceeds 6.8 billion. The quoted price on November 21 was US$1.61, an increase of 7.4% within 30 days, and the circulating market value was US$11 billion, ranking 20 in mainstream digital assets. Polygon has 114 million unique addresses, a 40-fold increase in volume compared to six months ago. In terms of TVL, the current chain of funds is about 4.6 billion US dollars, but it has been declining in the past three months.

New public chain war: the way to break the game comes from top to bottom

The top 16 TVL projects on Polygon and their proportions, data source: Footprint Analytics

At the same time, most of the top ten projects with TVL are DeFi mainstream asset agreements, and only 3 are exclusively owned by Polygon. Due to the continuous emergence of various new public chain competing products and Polygon’s lack of independent star projects to achieve differentiated competition, these are challenges to the long-term stable development of Polygon’s ecology.

The network effect of the new ecosystem

A new public chain battle, half a history of EVM expansion. The huge ecosystem of Ethereum and the aggregation of the Matthew effect are pressures for the development of other emerging public chains, but the congested network and high interaction costs of Ethereum also provide them with opportunities to break the game.

Metcalfe’s law is a law about the value of the network. He pointed out that the more users of a network, the greater the value of the entire network. The wind rises at the end of Qingping, and the multi-chain ecosystems represented by Solana, Avalanche, and Terra are building their own network effects. This multi-chain differentiation is also the driving force for the continuous innovation of the industry as a whole.

  •  

    Solana

New public chain war: the way to break the game comes from top to bottom

Solana ecological project map, data source: @SolanaProject

Solana was established in 2017. The founder and former Qualcomm engineer Anatoly Yakovenko chose to launch the Solana mainnet at the bottom of the market after the stock market crash in March 2020: “It was an interesting time because it was lower than everyone’s expectations.” Solana announced in June this year that it has obtained a $314 million financing led by a16z and Polychain to achieve a further ecological leap. At present, there are nearly 500 projects based on Solana, covering DeFi, Web3 applications, games and NFT.

Solana is committed to building a decentralized, high-performance, and scalable public chain: the core technological innovation is to adopt the PoH historical proof mechanism, which eliminates the need for timestamps for node broadcasts through decentralized time clocks, and controls the average block time to 500 Milliseconds; the entire network has 1,207 verification nodes; high scalability also makes the transaction cost of developers and users less than $0.01, and the current transfer has exceeded 40 billion.

The total supply of Solana is 500 million, and the current circulation exceeds 300 million. On November 21, SOL quoted a price of US$213, an increase of 13% on the 30th, with a circulating market value of US$64 billion, ranking 5th among mainstream digital assets. In terms of TVL, the current on-chain funds are about 15 billion U.S. dollars, and they are on the rise.

New public chain war: the way to break the game comes from top to bottom

Top 10 TVL projects on Solana and their proportions, data source: Footprint Analytics

Compared with other new public chain ecology, Solana’s uniqueness and differences are obvious, and it has formed its own ecological system, represented by Serum and Raydium (DEX), Saber (AMM), Marinade (Stake), and the chain TVL ranks top The ten projects are all Solana ecological exclusive projects. FTX’s endorsement and resource support are an important driving force for Solana’s development. Alameda Research and Solana Foundation, the investment institutions under FTX, are the main investment forces in Solana’s ecological projects. At the same time, SBF’s personal influence and Solana’s constant hackathons have also attracted a large number of outstanding developers and continuously injected fresh blood into the ecology.

  • Land

New public chain war: the way to break the game comes from top to bottom

Terra ecological project map, data source: @Terrians_

Terra was launched in 2018, and in August of the same year received 32 million US dollars of investment from Binance, Polychain and other institutions. Terra is developed based on the Cosmos SDK framework and is committed to providing a stable price and widely adopted algorithmic stable currency system. Terra has two main endogenous assets: Luna is responsible for governance and pledge, TerraUSD (UST) is an algorithmic stable currency pegged to the US dollar, and there are other pegged currencies. Every dollar worth of UST needs to be burnt down to one dollar equivalent of Luna. Through the dynamic balance of the arbitrage mechanism, the UST and the dollar are equivalently linked.

The use scenarios of the stablecoin UST are divided into on-chain and offline: offline, Terra connects the encrypted world with offline payment through the mobile payment application Chai, and is regulated by the Korean government. At present, the total number of Chai users is 2.5 million, accounting for the total number of South Koreans. The population is 5%, and the daily transaction volume is 68 million won. Similar applications include Kash, MemePay, PayWithTerra, BuzLink, etc. On the chain, the constantly evolving protocol applications of the Terra ecology, such as Anchor (borrowing), Mirror (synthetic stock), and Terra (DEX), are inseparable from the native stable currency UST. The increase in demand for the use of stable currency UST will directly increase the consumption of Luna. As the market value of UST grows, the price of Luna will also increase.

New public chain war: the way to break the game comes from top to bottom

Project and its share of the top 10 on the front TVL Terra, data source: Footprint Analytics

The total supply of Luna is 870 million, and the current circulation exceeds 390 million. On November 22, Luna quoted US$42.3, an increase of 5.9% on the 30th, with a circulating market value of US$17.3 billion, ranking 14th among mainstream digital assets. In terms of TVL, the current chain of funds is about 10 billion U.S. dollars, and it is on the rise. At the same time, TerraUSD (UST), a stable currency issued by Terra, currently has a market value of more than US$7.1 billion, ranking fifth in the stable currency sector.

Terra officially announced the launch of a USD 150 million ecological fund to support projects built on Terra ecology. At present, 8 of the top ten projects in the Terra ecological TVL are exclusively owned by Terra ecological. Featured DeFi projects including synthetic stock agreement Mirror and high interest rate loan agreement Anchor are all expanding the application scenarios of UST, Chai and other payments The real life channels opened up by the application gradually constructed the moat of the UST ecology, and the adoption of UST on different chains also made the Terra ecology outward.

Born for application

In addition to the existing-scale Ethereum Layer 2 and the new multi-chain ecosystem, a huge number of TVLs and a number of nearly a hundred protocols are their characteristics. In addition, there are also some new public companies that are still under construction but have distinctive features in functional applications. Chains play a role in the encryption world in their respective application fields.

  • Mina: Privacy and Lightweight

New public chain war: the way to break the game comes from top to bottom

Mina aims to become a lightweight blockchain, using Zk-Snarks zero-knowledge proof technology as the bottom layer to keep the node size at 22 KB, while the size of other blockchains is often around 20GB. This kind of lightweight does not require complex computer hardware, so anyone can easily run nodes and maintain network security.

The total supply of Mina is 870 million, and the current circulation exceeds 300 million. On November 22, Mina quoted a price of US$4.4, an increase of 5.5% on the 30th, with a circulating market value of US$1.3 billion, ranking 105th among mainstream digital assets.

The lightweight node design allows Mina to maximize decentralization. At the same time, it can be used as an application plug-in to cooperate with other public chains in privacy applications through a transfer bridge or middleware. It is expected that after the launch of the Developer Toolkit SDK next year, developers will be allowed to deploy Snapps and start the ecological construction of Mina.

At present, Mina has successively announced the opening of cooperation with the Ethereum Foundation, Polygon, and Teller Finance on privacy protection applications. Mina Foundation committee member Tess Rinearson is also leading the encryption technology team formed by Twitter.

  • Arweave: permanent storage

New public chain war: the way to break the game comes from top to bottom

Arweave ecological project map, data source: @joselitommutuc

Arweave was launched in 2017, and the mainnet went live in June 2018. In 2019 and 2020, it received US$5 million and US$8.3 million in financing led by a16z. The core feature of Arweave is decentralized permanent storage. According to the characteristics of storage cost declining year by year, users are charged a one-time prepayment for permanent storage, and the simple proof of random access is used to prove that SPoRA incentivizes nodes to store data permanently.

The total supply of AR is 66 million, and the current circulation exceeds 50 million. On November 22nd, AR quoted at US$60.8, an increase of 11% on the 30th, with a circulating market value of US$3 billion, ranking 63rd among mainstream digital assets.

Under the prosperity of the NFT industry, Web2.0 storage providers are vulnerable and NFTs disappear from the network. Therefore, many popular NFT projects choose Arweave as the storage layer in order to achieve permanent storage. At the same time, the market expects that Arweave will become a meta-universe in the future. A large number of storage requirements directly contributed to Arweave’s agreement revenue and market price growth exponentially.

  • Shimmer: Internet of Things + Web3.0

New public chain war: the way to break the game comes from top to bottom

On November 17, the Internet of Things public chain IOTA announced the launch of the first test network Shimmer to help IOTA promote complete decentralization and optimization of sharding utility. Users can help them start a new token economy by staking IOTA, and get rewards from the newly launched Shimmer network and apps.

IOTA is a public distributed ledger based on DAG. Its Tangle architecture is designed for smart cities to realize micropayments and machine-to-machine value transfer on the Internet of Things, and provide infrastructure for the Internet of Things in cities through services with no transaction fees.

As IOTA’s official and incentivized pilot test chain, Shimmer will help developers to flexibly build dapps through EVM compatibility and layer 2 composable smart contracts, and explore the construction of future programmable dapps through IOTA’s existing ecosystem and IoT technology. The underlying development path of the Internet of Things and the Web3.0 public chain.

Summarize

New public chain war: the way to break the game comes from top to bottom

Performance comparison of mainstream public chains, data source: @rareliquid

Summarizing the development paradigms of multiple new public chains, in addition to explaining the development path from top to bottom, from upper-level applications to underlying technologies, and the prosperity of ecological applications boosting the outbreak of public chain use cases, we also draw the following inferences:

  • The change in the share of Bitcoin’s market value reflects the distinction between the fundamental principles and the narrative of the new public chain: when Bitcoin exited from the early barbarity, the total market value has changed from 100% to the current 42%. The reason is that a number of new public chains such as Ethereum and their protocols are not only expanding the ecological territory of the encrypted world, but also inwardly competing for technological advantages and the iron throne of ecological value. The change in the proportion of total market capitalization reflects the distinction between Bitcoin’s original narrative and the new public chain narrative, and it is also a vote of new funds from groups and institutions on fundamental principles and new consensus.

     

  • The ecological internal circulation of the new public chain is gradually improved, and the trend of asset decoupling is beginning to appear: the decoupling of assets between the new public chain and many conceptual blocks and Bitcoin has become more and more obvious. The maturity and perfection of the ecology and the independence of the user circle have enabled them to break through It has a strong correlation with Bitcoin price changes. But the enthusiasm of the new public chain is the evolution of the existing architecture of the blockchain rather than the denial of the original system, just as productivity innovation, transparency of production relations, and full freedom of competition are the driving force behind the development of the crypto world.

     

  • The methodological deduction for the overall improvement of the new public chain ecology: first, the institutional endorsement and celebrity effect of the encrypted world will bring industry attention and resource tilt to the early public chain ecology; then, high ecological incentive policies will drive the overall TVL of the public chain ecology The rapid start-up of the network will often result in TVL fund retention and market value increase several times higher than the reward amount. At this time, it will also test the public chain’s own ability to deposit and activate assets; when the ecology has a scale, the expansion path will allow the ecology and agreement to grow. External (other public chains or real world) expansion and output are the final propositions. User retention and developer friendliness are the blood of continuous ecological renewal, and the endogenous protocol innovation and differentiation of the public chain will become the long-term ecological development. The kinetic energy.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/new-public-chain-war-the-way-to-break-the-game-comes-from-top-to-bottom/
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