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Public chain big chess game

Xiaoran

21-02-21 20:05

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Original title: "public chain big chess game"

Original source: Notes on Blue Fox

Ethereum congestion has led toDeFiThis is what is happening.The expected path was Layer1 to Layer2, but the reality is that Ethereum is spilledover to BSC, HECO, Poca, Astro Boy and other chains.

Questions like this are now on people's minds: Will Ethereum be surpassed? What does the development of BSC and HECO mean? ... From the perspective of Blue Fox Notes, the future is dynamic, but there are also traces to follow. How to understandThe male chainThe big game?

Congestion is a sign of strong demand, and good demand is better than no demand

Beyond Bitcoin and Ethereum, the area where product and market fit best in the crypto world is Defi. That's why Blue Fox Notes has been following Defi for more than two years. Blue Fox Notes mentioned in 2019 thatWhy is DEFI the second encryption breakthrough?". The Ethereum congestion is also a glaring contradiction between growing demand and inadequate infrastructure preparation. It is intrinsically a good thing; great demand is far better than no demand at all.

Demand is not met, spillover is a natural result

Ethereum is congested because of strong demand. When needs cannot be adequately met, it is normal and natural for the needs to find alternative ways to solve them. The spillover of DEFI from Ethereum to BSC and HECO, Poca, Astro Boy, etc., is a natural result.

DEFI is also progressive

Defi is also a long-term development process, and it would be unrealistic to take on all the requirements from the start. It is also not realistic for DEFI to be completely decentralized from the beginning. The current situation is that both the DEFI project itself and the chains that DEFI depends on have some tradeoffs in terms of decentralization, but the magnitude of the tradeoffs varies.

If demand skyrockets and performance fails to keep up, then a trade-off must be madesecurityA temporary trade-off with decentralization, with improvements in performance and user experience.

In terms of the development of DEFI, it was a gradual and tradeoff process, namely DEFIAnd blockchain itself is also dynamic, it's not an either-or relationship.Not:It's either decentralization or centralization.

On the way to the true DEFI, one of the stops must be semi-decentralized. This is the scenery of the journey, it has a better user experience, it will get more new users on board, and the end point is decentralized public chain and DEFI. This is a long-term process.

Ethereum congestion is not an insurmountable problem

With Layer2 on the ground, Ethereum congestion will be greatly alleviated, of course, with at least a window of a few months or half a year or so.

Other public chains are thriving in Ethereum's favor

In the short term, there may be competition for Ethereum, such as the migration of its users, the spillover of business, especiallyDEXSuch high frequency chain behavior of the DEFI project is awkward. This can be seen in the development of Cake and Mdex. Like it or not, these chains are evolving.

In the long term, as the scalability of Ethereum is solved, and as BSC, HECO, Poca and other chains bring more new users, some of them will reverse migrate and eventually form a layer of users and settle down. The arrival of new users is also good for Ethereum.

There are more and more projects on BSC and HECO, and they are growing very fast. In the end, Ethereum will be the beneficiary. There are two ways to look at this:

1. The big picture in encryption

The crypto space as a whole is still small and a long way from Wall Street. Defi is the human version of Wall Street in the digital age. Just like the Internet era, network media subverted newspapers and magazines, this is the general trend of history. Wall Street players will shift their battleground to crypto in the next five to ten years.

From this historical trend, no matter which chain developed, is conducive to the entire crypto field. Whether it's BSC, HECO, ETH, DOT, Atom... .or other rising chains, are essentially all on the same boat. The cake here is so big that even a few chains can't hold it. Maybe in the future, dozens of chains can hold it?

2. The ultimate path to encryption

The current crypto landscape is more or less weighted to the nature of decentralization, and none of the chains can be said to be completely decentralized, just varying in degree. But Bitcoin and Ethereum are by far the most decentralized, secure chains in the world. It's not going to happen overnight.

When the other chain by weighing a certain degree of decentralization, greatly improve on the performance and user experience, can bring more users, users entering the field, in particular, the chain will be the whole field of user groups do big, will bring the development of the DeFi more talent, more ammunition, the market continued to expand.

When the market expands to a certain extent and reaches a certain equilibrium, people will begin to weigh their needs and make their own choices between security, decentralization and performance.

This leads to differentiation between different chains, some of which host higher-value activities, such as Bitcoin and Ethereum. Some chains will host lower value but more frequent activities. Finally form three-dimensional market pattern.

As more users get to Defi in the crypto world via other chains, such as BSC and HECO, some of them will go to Defi on EthereumThere is also demand, which will naturally drive more users and traffic to Ethereum.

Moreover, with the development of Layer2, Ethereum is even more expensive than BSC and HECO chains, but the difference between them will not be so great, and if decentralization and security requirements are higher, there will be a reverse migration situation.

The scarcest thing in encryption is not performance but security

The scarcest thing in cryptography is not performance, not low cost, not fast speed, but security. This security is not intended. Bitcoin and Ethereum have stood the test of history, formed a social consensus, and permeated the entire crypto world through token incentives, value changes, liquidity, and the underlying network. This is the most valuable thing in cryptography.

With layer2 and sharding solutions, and especially with layer2 solutions expected to arrive in the next few months to six months, the security benefits will be especially valuable. Because performance is an easier issue to solve, security and decentralization are not. In the long run, Ethereum's advantages will gradually become apparent.

Etherium-based Layer2 competition path

Ethereum's Layer1 will continue to be a valuable resource as Ethereum's DEFI protocol builds its own layer2 and implements interoperability between layer2.

* Continue to provide greater security on Layer1. Layer1 is better suited for important transactions, where security requirements are higher and costs are less important;

* Defi basically runs on top of Layer2 and doesn't bother Layer1, which frees up Layer1 a lot; In the future, Ethereum Defi, whether it's lending, trading, asset management, insurance, payments, etc., will run on Layer 2;

*Layer2 is almost as safe as Layer 1, as in ZK Rollup;

*Layer2 also has a transition process. Early Optimistic Rollup and other solutions can solve the pressing problem, which will speed up the progress of Layer2;

* Layer 2 of the competition after the birth of about one to two big MAC, it will become the Layer 2 solutions, so as to fundamentally solve the problem of communication of DeFi, it means that the future of Layer 2 will achieve high value project, and its value may even close to the Layer 1, Layer 2 if the future level of billions of dollars of the birth of project, should be no surprise. In the track ranking of Blue Fox Notes, Layer2 ranked fourth, next to BTC, public chain (ETH, etc.), algorithmStable currency.

The development of Layer2 will increase the value of Ethereum

People will say, when DeFi's main activity is moved to layer2, there will be fewer transactions and less transaction fee capture. The problem here is the size of the cake.

If the development of Etherium-based Layer2 projects is active, Ethereum's role as the underlying security will be further strengthened. The more assets are hosted on Layer2, the more important Ethereum will become. As the number of assets it is hosting grows,ETHValues will also rise. The value of ETH is captured not only by transaction costs, but also by its value as an underlying asset.

Public chain big chess game

The public chain in the future will form a hierarchical pattern according to the needs of user groups. For users who require more security and decentralization, especially those with large transaction volumes, Ethereum will have a greater advantage. For users with higher transaction costs and speeds, especially those with high frequency trading, non-Ethereum chains may have a bigger advantage, and these users will be scattered across different chains.

(The Iron Throne, PowerThe game")

BSC, HECO, Boca, Astro Boy and other chains will not only migrate users from Ethereum, but also bring more new users to Ethereum. Some of the new users brought by their respective chains will be converted to Ethereum users, and the development of BSC and HECO will also be intrinsically beneficial to Ethereum. Just as the development of Ethereum is good for Poca, Astro Boy, BSC, HECO, etc.

With the development of Ethereum Layer 2, even if the performance can be greatly improved, Boca, Astro Boy, HECO, BSC and other chains also have their own relatively fixed user groups, which will eventually form a certain balance of power and have their own space for survival.

Ethereum is still in the best position to end up with a public chain, because it has everythingIntelligent contractThe platform's most coveted trump card: its rarest security, which cannot be replaced, but there is plenty of room for other chains to grow and consolidate their user base with performance and user experience advantages.

The future pattern of public chain will be multi-chain, layered, full of possibilities and colorful.