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Ethereum and the "killers" who covet it

Lorraine

2024-03-27 13:30

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Original title: "Ethereum and the "Killers" Who Covet It"

Original author: Lorraine

TL;DR

1. After a round of bear market, the mental outlook of the "Ethereum killers" in the past is not as good as before, but the potential energy retained is different.

2. Solana is the only public chain whose market value has increased instead of decreased in the time control group. It has accumulated a lot of strength in the trough and completed a "rebirth from the ashes".

3. Star public chains may never regard becoming the second Ethereum as a goal, they just want to be the first in their own track.

In addition to the most prominent protagonist "Bitcoin" breaking a new high of $73,750, the native token "SOL" of Solana, which was called the "Ethereum Killer" in the last round, also took one year and three months to quietly attack from the bottom of $9 to $208, becoming the fastest-growing boy on the market value list.

The boomerang of the "Ethereum killer" hits the crypto world on the head again.

This also makes me wonder, what are the current situations of so many chains that claimed to subvert Ethereum in the past?

1. The birth of Ethereum (ETH)

Let's start with the central object of the sniper.

The idea of the Ethereum network can be traced back to the end of 2013.

Founder Vitalik Buterin proposed such a decentralized platform in the white paper that is "open source, based on blockchain technology, allowing developers to create and deploy smart contracts and decentralized applications (DApps) on it."

In July 2014, Vitalik and his team started pre-selling Ethereum (ETH), the native cryptocurrency based on the Ethereum network. The sale lasted 42 days and raised about $18 million for the development and maintenance of the network.

In August 2015, the Ethereum mainnet was launched, mainly for developers to develop and test smart contracts. That year, ETH opened at about $0.3 per unit, and soon climbed to the second place in market value and has remained there ever since.

In 2017, ICO (Initial Coin Offering) became a popular way for many blockchain projects and start-ups to raise funds.

Many projects chose to conduct ICOs on the Ethereum platform, and Ethereum's market value also reached a new high.

The choice of Ethereum network as an ICO platform can be mainly attributed to its following differentiated features:

1. Smart Contract Function & ERC-20 Standard:

a. One of the core features of the Ethereum network is its support for smart contracts. Smart contracts are self-executing, conditionally based protocols that enable developers to create complex applications such as on-chain financial trading (DeFi) platforms, on-chain games (GameFi), voting, etc. on Ethereum with fast transaction confirmation times and low transaction fees (compared to Bitcoin).

b. The innovative "ERC-20" is another smart contract standard that provides unified rules for token creation and issuance.

Tokens that follow the ERC-20 standard can be integrated with Ethereum wallets and exchanges without additional development operations, allowing project parties to easily issue their own tokens on Ethereum, and also providing important convenience for them to raise funds in ICO.

2. Mature ecosystem & active community:

a. At that time, the Ethereum network had developed a relatively mature ecosystem to bridge more developers, such as the smart contract programming language Solidity, the MetaMask wallet that provides a convenient entry, etc. These provide the necessary infrastructure and services for the deployment and issuance of new project tokens, greatly reducing the entry threshold for projects.

b. Ethereum has an active community, especially the developers and technical experts, who spontaneously solved technical problems for many projects and provided innovative ideas, promoting project development.

Being able to rely on a high-quality community and practical developer technical support plays a vital role in the success of new projects.

3. Market recognition & liquidity:

a. Ethereum, as the second-highest cryptocurrency by market value at the time, has been recognized by the market, making it easier for projects conducting ICOs on Ethereum to attract investors' attention and trust.

b. ETH, as the native token of the Ethereum network, has a large demand for it, both for project developer deployment and user transactions. High liquidity allows investors to easily enter and exit the market, and also provides good capital liquidity for ICO projects.

In summary, the craze for ICOs on the Ethereum platform has also brought a large number of project parties and investors to purchase ETH currency itself, and the price of ETH has risen accordingly, reaching a high of $1,400 at the end of 2017.

2. What is the crime of Ethereum in attracting killers?

Along the way, it seems that Ethereum has become the chosen one in the crypto world that has attracted enough attention since its birth.

It has continuously innovated and improved the blockchain world. The introduction of smart contract protocols has opened up the imagination of the cryptocurrency industry without a ceiling, and has cultivated fertile ground for the popularity and prosperity of the subsequent benchmark events-"2020 DeFi Summer" and "2021 NFT Explosion", promoted the practical application and development of blockchain technology, and attracted more and more investors and developers from all over the world to the crypto world.

"When a tree stands out in the forest, the wind will destroy it"

When something is projected with too many expectations and praise, there must be voices of opposition.

And Ethereum does have the following problems that are mainly criticized by users.

For ease of understanding, we can use "obstacles that may be encountered when swimming in a pool" to analogize "problems that may be encountered when trading on the Ethereum network":

Just like the capacity of a swimming pool is limited, more and more people pouring in will cause the pool to be crowded, and people will not be able to swim smoothly and quickly.

1. Scalability issues:

With the increase in the number of users and the increase in applications, the network becomes congested, resulting in longer block times and slow transaction speeds. When the demand for high transaction volume cannot be met, it will have a negative impact on many projects, especially in areas such as games (GameFi), on-chain financial transactions (DeFi) and NFT transactions that require timeliness.

（Image source: Nervos column）

When the summer peak season arrives, this pool will have to carry a larger user base than ever before. In order to swim out of your own lane calmly in the "dumplings" situation, you need to use your "money power" to summon staff and allocate some users who have used "early bird prices" or "discount coupons" to enter at low prices to queue up on the side first, and wait for the "money players" in front to swim ashore and then return to the pool to move forward at a snail's pace.

2. Network congestion and high gas fees:

In some specific periods (such as rushing to mint NFTs, quickly trading airdropped tokens, etc.), the Ethereum network will be severely congested, and transactions may be delayed or even unsuccessful, greatly affecting the operating experience.

If users want to quickly resolve network congestion in a short period of time, they need to pay higher transaction fees (Gas fee).

(A sky-high miner fee in 2019: the handling fee was as high as 10,668.73185 ETH, while the transfer amount was only 350 ETH, which is 3% of the handling fee.)

The swimming pool has locked lockers for you to store your personal belongings. Although most of the time you can open and take it out without any problems, you may be unlucky once and find that all the valuable items in the locker have been stolen.

Or maybe you have carefully placed the items on the shore within your sight and used clothes to press them down. It was not until you got ashore that you discovered that the clothes were still there, but the property under pressure had been replaced by worthless items.

You asked the swimming pool for help and checked the surveillance, only to see the thief take the stolen goods out, turn right, open the Doraemon's door, and go to a different world where there is no trace;

You can't complain to the swimming pool because you have signed a contract when you entered to be fully responsible for your own items.

3. Security issues:

Security can be said to be the red line in the blockchain world. With the development of blockchain technology, the endless hacking techniques have also been iteratively changed and unpredictable, and the Ethereum network has also suffered several major security attacks in history.

For example, in the 2016 The DAO crowdfunding project, the attacker exploited a recursive call vulnerability in the smart contract and stole about 3.5 million ETH (worth about $60 million at the time) from the funding pool. This attack directly led to the split of the Ethereum community and ultimately led to the hard fork of Ethereum (divided into two different chains, ETH and ETC). This exposed the potential security risks of smart contracts and the entire network, and hidden unknown security vulnerabilities.

Of course, the probability of encountering the problems in the example when swimming in a swimming pool is extremely low;

The above transaction problems are indeed more frequent on the Ethereum network.

In summary, it has become uneconomical for users to conduct small transactions on the Ethereum network, which has also hindered the large-scale and widespread adoption of Ethereum, especially for application scenarios that require frequent operations and real-time transactions.

Because of this, many project parties have found new opportunities in these poor user experiences, waiting for the opportunity to polish their own targeted magic weapons and alternatives, and launch their own public chains to divide up this part of the traffic that Ethereum cannot eat.

3. The "Ethereum Killers" that are generally optimistic in 2021

In order to make a splash in the world of cryptocurrency where the cost of attention is particularly expensive, many media will use the gimmick of "Ethereum Killers" for many star public chains when writing promotional press releases to attract attention.

I found an article on forkast at the end of 2021, titled "The top 5 『Ethereum killers』 of 2021", which lists the following 5 "Ethereum killers":

Cardano (ADA), Avalanche (AVAX), BNB Chain (BNB), Solana (SOL), Polkadot (DOT).

The author is an Australian journalist who focuses on the crypto industry, LACHLAN KELLER. Although one person's opinion is not enough to represent everyone's views, it can indirectly reflect that at the end of 2021, some people were generally optimistic about potential targets other than ETH.

It is just by observing the five phenomenal "Ethereum killer" public chains mentioned in this article, let's take a look at their B&A changes in the past two years. (The following ranking is in no particular order)

Price trend is the best description of the fundamentals of a token

*Data from Messari. The data record deadlines are 2021/12/20 and 2024/03/24

As can be seen from the table, after a round of bear market, the prices of various currencies have fallen.

Among them, BNB has the smallest decline. After the recent bull market correction, it has basically reached the same level as the currency price at that time, and the gap from the ATH (All-Time High) of $690 in 2021 is gradually narrowing.

The second is SOL.

Although today's recorded coin price has dropped slightly compared to that time, in the middle of this month, the Solana chain ushered in a wave of pre-sales of multiple 10,000-fold meme disks, which also raised the coin price to $208, a slight increase from the record data at the end of 2021.

What is more noteworthy is that SOL is the only coin among the five "Ethereum killers" whose market value has increased, with an increase of +31.85%. Some time ago, its market value even surpassed BNB and ranked fourth.

The prices of the other three coins (ADA, AVAX, DOT) have all experienced a sharp correction of more than 50%, among which DOT, the native token of Polkadot, has fallen by more than 71%.

When Lachlan wrote the article in 2021, it was a year of great harvest in the cryptocurrency market, and the future seemed to be promising:

The price of Bitcoin reached a new high of $69,000 at the time, Coinbase was listed on Nasdaq, the U.S. Securities and Exchange Commission (SEC) approved the first Bitcoin futures ETF, and the rapid popularity of NFT and metaverse concepts brought unlimited increments...

However, with the cyclical fluctuations in the industry, as well as the global epidemic, the U.S. interest rate hike, the Luna black swan event, a large amount of funds accelerated to leave the Crypto industry, and other influences, the crypto world also ushered in a bear market, and the targets that were generally optimistic at the time also ushered in a comprehensive and deep correction.

In such a market full of randomness and volatility, it is normal to have ups and downs.

But how can we go through the ups and downs of bull and bear markets in the sea of time, and still be able to land neatly and rush to the next sea area after going back and forth, instead of being washed away by the sea water and leaving little body?

Perhaps we can get a glimpse of this from the performance of these "killers".

4. In the bear market, the market value has increased instead of decreased. What is Solana's "killer weapon"?

First, let's briefly introduce various information about Solana——

· Founder background:

Founder Anatoly Yakovenko previously worked as a core engineer at Qualcomm in the United States and has rich experience in performance optimization.

· Project Background:

Initially, we wanted to create an order book trading platform on the blockchain, but found that Ethereum could not support large-scale on-chain transactions. In early 2018, Anatoly decided to build a smart contract platform with Raj Gokal.

· Financing and Cooperation Project Party:

According to Crunchbase statistics, Solana has completed 13 rounds of financing so far, raising a total of approximately US$320 million. The largest single financing was led by Andreessen Horowitz (a16z), which raised US$314 million in June 2021.

In the other rounds of financing, Multicoin Capital (standing with the founding team from the unpopular seed round), Jump Crypto, and Alameda Research also provided considerable support.

· Differentiated features:

The performance label that a public chain is most proud of is often written on the official website page.

The introduction on the homepage is a sentence: "Powerful for developers. Fast for everyone."

It can be clearly read from this official slogan that Solana is very confident in the underlying technology of its public chain, and its vision is relatively simple and pure.

It is mainly aimed at two groups -

1 Developers "can use their innovative capabilities on the chain to develop functions to the extreme"

2 Every user "transacts quickly on the chain, really quickly".

Keyword 1: Communities of Millions

-Over 20 million active addresses

-Over 200 million NFTs minted on the chain

- 20,000 participants in the Solana Hacker House

-48,000 developers worked on projects during the hackathon

Keyword 2: Mass Adoption

-"Economic" The average cost of each transaction is 0.00064 (in contrast to the gas fee of tens/hundreds of dollars on the Ethereum chain)

-"Fast" The block time is 4s, and about 3,170 transactions can be processed per second (Ethereum's block time is about 15s, and 25 per second can be processed). Transaction)

- "Decentralization" is verified by 1717 independently run nodes, ensuring that your data remains secure and censorship-resistant. (There are currently 8188 nodes on the Ethereum chain)

- "Energy-saving net carbon" pioneered an innovative combination of PoS (Prove of Stake) and PoH (Prove of History), a new timing method for distributed systems. This mechanism allows the network to reach consensus without the need for traditional block time intervals, thereby increasing transaction speed and greatly saving energy. (Single PoS consensus mechanism implemented on Ethereum chain)

Keyword 3: Growth in All Aspects

-「Payment」Solana Pay protocol is connected to physical merchants such as Visa and Shopify, allowing users to use SOL or any other Solana-supported tokens (such as stablecoin USDC) for real-time payments, with extremely low fees and no need to involve third parties such as banks or payment processors.

-「Game」Use solid technology to ensure the normal operation of multiplayer online game projects on the chain, and achieve fast response and low latency, such as Star Atlas, Aurory, etc.

-「NFT」Using state compression technology, the cost of NFT casting can be reduced to $0.00011, helping project parties to issue collections on the chain at a large scale and at a low cost, that is, casting thousands or even millions of NFTs only costs a few hundred dollars.

-「DeFi」The total value locked (TVL) on the Solana chain has exceeded US$11 billion, and the average 24-hour transaction volume exceeds 400 million transactions. It is its solid infrastructure that enables the chain to undertake various DeFi applications that are super fast, simple and cost-effective.

Summary:

As the first in the reserve echelon of "Ethereum killers", Solana's killer feature is "what you have, I have, and what you don't have, I still have."

Like Ethereum, Solana is well aware that powerful infrastructure technology is the cornerstone of a public chain's prosperity and development.

Therefore, it pays great attention to creating an active developer ecosystem, holding hackathons to attract outstanding developers to join, and actively attracting investors to support various high-quality young entrepreneurial teams on its chain.

For example, it has spawned top DeFi applications such as Phantom Wallet (a smooth and easy-to-use browser wallet), Raydium (DEX), Magic Eden (NFT trading platform), StepN (M2E fitness game), etc.

In order to maximize performance, it has created a consensus mechanism combining PoS and PoH to improve scalability and handle high throughput, thereby reducing transaction delays and transaction fees, thereby optimizing user experience.

Of course, everything has two sides.

The Solana chain has also experienced many large-scale downtime and theft security incidents.

Especially the bankruptcy of FTX in 2022 and the discredited reputation of founder SBF (an early supporter and active investor of Solana), also affected the price of Solana to plummet to single digits. And FTX/Alameda Research still holds a large number of SOL tokens to be unlocked. These assets are gradually being liquidated. Whether this will have a certain impact on the market remains to be seen.

But it is worth affirming that without the halo protection of the previous big bosses, Solana in the bear market trough did not become depressed and forgotten, but instead firmly walked out of its own way.

Lily Liu, Chairman of the Solana Foundation, has actively expanded the development territory of other countries. Developers have not given up on continuing research and development and working on the ecosystem, but have become more active in innovating.

(Solana developer retention rate increased significantly in 2023)

During this period, state compression technology was launched to benefit the issuance of NFT projects, SAGA hardware phones were sold, Solana Pay payment scenarios were expanded to Visa and physical merchants, the cross-chain bridging performance of Wormhole and other chains was continuously optimized, and as the preferred chain in the DePIN field, more DePin projects (such as Helium Mobile's token MOBILE, which increased tenfold in a week) were pushed to users, as well as various meme crazes that broke out on the chain...

It is these kinds of continuous "presence" evidence that allow investors to see that there are still unlimited opportunities on the Solana chain. The coin price of single digits is even more valuable. The general optimism also allows Solana to convince people with its increase and deservedly complete a "rebirth from the ashes". In 2024

Solana is as good as ever and has returned to the user's field of vision. What made the other players in the "killer" pool join the queue? Are they doing well now?

5. Briefly review the rise and fall of other "Ethereum killers"

BNB Chain (BNB, the initial total supply is 200 million, and there will be multiple destructions)

Pros

1. As the first exchange in the universe, the rapid growth of its trading volume and user base has given investors hope, and Binance has also launched the Binance Smart Chain (BSC) compatible with Ethereum smart contracts, providing a low-cost, high-efficiency decentralized application development environment, thereby attracting a large number of projects and developers.

2. Unlike Ethereum, which has unlimited issuance, Binance uses a unique token destruction mechanism, which uses part of the profit to repurchase and destroy BNB every quarter. This mechanism reduces the circulating supply and thus increases the value of BNB.

3. BNB is not only a medium of exchange, it can also be used to participate in liquidity mining and IEO (Initial Exchange Token Offering), and is also called a "golden shovel" by many users. For example, PancakeSwap on the BSC chain launched IFO (Initial Farm Offerings), allowing users to participate in the issuance of new tokens by staking BNB in exchange for CAKE tokens.

Cons

1. In October 2022, BNB Chain was hacked, involving a total amount of more than US$566 million at the time, which was also one of the largest security incidents in the cryptocurrency field so far.

2. In November 2022, the bankruptcy of FTX Exchange had a huge impact on the entire cryptocurrency market, triggering market panic and a crisis of trust. Although Binance and FTX are different entities, market panic has also spread to other exchanges and their tokens.

3. Competition in the exchange market is increasingly fierce. For example, when Inscription was popular last year, OKX took the lead in launching the Web3 wallet and attracted a large number of users and funds, which also invisibly affected Binance's market share and BNB's performance.

4. As the exchange with the largest cryptocurrency trading volume in the world and with Chinese genes, Binance has faced increased regulatory pressure in the past bear market. Facing criminal charges from the SEC, it was ultimately concluded by paying a $4.3 billion fine and founder CZ resigning as CEO.

Cardano (ADA, maximum total supply of 45 billion)

Pros

1. Cardano uses a new algorithm called Ouroboros, which is essentially a proof-of-stake mechanism (PoS) designed to provide high energy efficiency, security and scalability. It also uses a two-layer system operation, the settlement layer (CSL), which is used to process transactions, balances, smart contracts, etc.; the computing layer (CCL), which is used to handle data storage for future applications. Each layer can be upgraded independently without slowing down transactions on the other layer, and is also to provide higher transaction processing speeds (TPS) and reduce transaction fees.

2. For interoperability and fork issues, Cardano/ADA solves them through side chains and smart contract technologies respectively, so that different main network coins can be safely converted and fork events can be avoided, while providing a model for industry development.

3. As early as 2017, a large amount of funds were raised in the ICO, which was one of the second largest ICOs at the time, and accumulated a lot of loyal recognition from old users. And Cardano is jointly promoted by three teams with detailed and clear division of labor:

●IOHK (Input Output Hong Kong): A Hong Kong company composed of hundreds of elites led by founder Charles Hoskinson, responsible for technical development.

●EMURGO: A Japanese company, responsible for the project ecological layout of Cardano, supporting and incubating other project teams in the ecosystem, and solving funding problems (most of the early financing came from Japanese public investors, so Cardano was also nicknamed "Japanese Ethereum").

●Foundation: The Foundation is responsible for Cardano's fund supervision, formulating ecological regulations and standards and community building, popularizing and promoting the Cardano protocol, and communicating with the government for supervision.

(In 2021, people are more willing to invest in Cardano than Bitcoin. Image source: Investor Sentiment Survey Report released by Voyager Digital in 2021)

Cons

1. The development progress is slow. There has been no "killer application" for several years, and the publicity of the operation team is not down-to-earth enough. Users say it is too obscure and difficult to understand.

2. Cardano, as the foundation of the network, is built on the Haskell language, and the smart contract programming languages on it are Plutus, Marlowe and Aiken. Compared with the Solidity/Rust/Move languages of other projects, it is still a niche language, requiring higher-level software engineers, and the development entry threshold is high.

(Image source: Binance Square, Cardano user’s blog post)

Avalanche (AVAX, maximum supply 720 million)

Pros

1. Avalanche is a blockchain under construction on Layer 0. The protocol consensus mechanism is a new type of consensus algorithm that combines the advantages of classical Byzantine Fault Tolerance (CBC) and Nakamoto Consensus (PoW). It is implemented through random subsampling and has scalability, security and high speed. (For a detailed explanation, please refer to this article compiled by Rhythm: https://www.theblockbeats.info/news/28137 ) 2. The Avalanche chain consists of three subnets: the transaction chain (X chain), the contract chain (C chain) and the platform chain (P chain). This new mechanism increases the overall transaction speed on the chain, and the official claims that the throughput of each subnet is as high as 4,500 TPS. 3. The foundation launched Avalanche Rush, a $180 million liquidity mining reward program, to attract more DeFi projects and users to join the ecosystem. This plan has significantly increased DeFi activities on Avalanche and increased TVL on the chain.

4. Not only does it support sub-second confirmation, it also supports access to multiple virtual machines, such as EVM and WASM, making it an Ethereum-compatible blockchain. The cross-chain bridge allows assets to be easily transferred to Avalanche for trading, providing more options for DeFi users.

5. In the gaming field, because subnet technology allows each game to build a customized chain according to its specific requirements, it means that game developers have great flexibility to optimize the performance parameters of the blockchain. Game developers can even provide gas-free transactions to lower the threshold for players to participate in the game.

6. Actively seek other growth opportunities. For example, the foundation launched the "Avalanche Vista" plan to support the value of tokenized off-chain assets; achieved interoperability between Uniswap and Avalanche through LayerZero; JPMorgan Chase worked with Evergreen Subnets to build a proof of concept to demonstrate the potential of blockchain technology, smart contracts and tokenization in automated portfolio management; AvaCloud teamed up with Citibank to test the feasibility of using blockchain infrastructure for foreign exchange transactions; and helped Amazon provide computing power and storage, etc.

7. Actively embraced the inscription fever at the end of last year, and obtained inscription casting and trading volume of more than 10 million US dollars on the chain within a week.

Cons

1. AVAX has a low circulating supply (~48%), which will lead to potential undesirable price suppression and excessive volatility.

2. Avalanche's ecosystem is not closely tied to the token, and the current token economic model does not require subnets to pay for their activities in AVAX

Polkadot (DOT, unlimited inflation token)

Pros

1. Polkadot is a project built on Layer 0 by the Web3 Foundation, founded by Gavin Wood, one of the co-founders of Ethereum.

2. Polkadot uses the Nominated Proof of Stake (NPoS) mechanism for electing validators, and the GRANDPA mechanism for finalizing the consensus algorithm for blocks. This dual governance model ensures the decentralization and strong security of network decision-making.

3. Polkadot is known as a "multi-chain network" that aims to seamlessly integrate various blockchains, allowing communication and data transfer between chains. Parachains are a unique structure in the Polkadot network. They are connected to the Polkadot mainnet through Polkadot's relay chain, aiming to achieve parallel interoperability and scalability between multiple blockchains while maintaining their independence and security, and also improving the throughput of the network.

4. The Parachain Auction narrative was invented. That is, in order to connect to the relay chain, the parachain needs to obtain a slot through an auction. The auction process is decentralized, and the slot is bid by locking DOT tokens.

5. The developer ecosystem is active. According to the 2023 Developer Report released by Electric Capital, Polkadot network developers submitted a total of 22,232,604 original codes in 2023, and developer contributions accounted for 10.5% of all submitted codes in the Web3 field. It has the second largest number of full-time developers, second only to Ethereum, reaching 792.

Cons

1. The Polkadot ecosystem is relatively complex, and the working principles and technical details are difficult for ordinary users to understand, which increases the learning cost and participation threshold.

2. Although the more cutting-edge decentralized governance model OpenGov has been launched, in fact, few voters actively participate in voting and proposals, making the final decision-making process centralized and lacking community participation.

3. After the first round of slot auctions, the activity has declined, and new stories are needed to reactivate users. In addition, the number of parachains that can be supported is limited, and the auction system is not friendly to startups and small innovators with small amounts of funds.

4. There is a gap in the information transmission and feedback between Polkadot officials and users, and the latest developments have not been synchronized to the community in a timely manner, and the communication language is not plain and easy to understand.

5. In terms of economic model, the high inflation rate and relatively limited use scenarios of DOT tokens have caused some users and investors to have doubts about the actual use and long-term value of tokens.

According to Chainalytics Labs' statistics on the activity of mainstream public chains in May 2023, from the four aspects of "user activity", "developer activity", "financial status", and "social activity", Polkadot ranks ahead in developer participation, and the other scores are very different from BNB and Solana. The user activity index ranks even the lowest, and the overall ranking ranks third.

(Source: Chainalytics Lab)

Summary:

After following the timeline to find these famous public chains, I feel a little dazed when I look back.

The prosperity of cryptocurrencies in 2021 has made these star public chains unparalleled, but more than two years later, they are still recovering from the heavy blow of the last bear market. Looking back, the reporter who wrote the article on forkast at the time stopped writing as early as the beginning of last year, and the homepage of the X account no longer pays attention to and updates any content about the crypto industry.

There are too many stories about high-performance public chains, which start out impressive but end up with disappointing actual delivery results, which makes people no longer buy into such narratives easily.

5-1

Almost every chain uses "high throughput" and "low transaction fees" as the "killer game" ticket, but they also have their own differentiated highlights -

BNB Chain (BNB): As the first in the universe, its own CEX attributes can bring a large number of users to naturally gild the token. And BNB is also given leverage to participate in liquidity mining and IEO. When the token becomes a golden shovel that can pry more interests, the long-term demand of investors and users for it is naturally self-evident.

Cardano (ADA): Unique and meticulous team division of labor, accumulated a large number of audience support and investor attention in the early stage. Subsequent development progress is slow, there has been no "killer application" for several years, and it is far away from community members. Some users quietly left during this period.

Avalanche (AVAX): The groundbreaking consensus mechanism and the three subnets each have their own responsibilities, which greatly optimizes its transaction speed. Low latency and low fees have made Avalanche Chain more brilliant in the field of games. It has cooperated with the "MapleStory" game in South Korea and other countries to launch a Web3 version called "MapleStory Universe". It also actively seeks various marketing rules, embraces hot narratives, such as inscriptions, and cooperates with Web2 companies, and strives to become the preferred platform for traditional companies to issue encrypted assets on the chain.

Polkadot (DOT): The multi-chain structure and extremely active developer ecology are its strongest chips. However, it may also be because of the too one-sided development of engineering-oriented technology, and the neglect of mental education and external marketing within the community. When the value of tokens is halved in the bear market, it is difficult for Polkadot Chain to retain those users who have little knowledge of technology and lack of faith.

5-2

During the process of collecting information, what impressed me most was actually a 30,000-word article from the "Polkadot Ecological Research Institute" on the Polkadot chain: "10,000-word strategic report: How can Polkadot get rid of the growth dilemma, and what is the future way out?" (I strongly recommend that everyone click in to read it, and you will really be moved by this sincerity and care.)

This organization has been focusing on studying the development opportunities and prospects of Polkadot and the Polkadot ecosystem for five years, and has received support from the Polkadot Treasury for six consecutive times. It is an OG team in the community.

In the article, the researcher team not only sincerely acknowledged the widespread existence of negative emotions among users in the community, but also analyzed in detail the current situation of the Polkadot chain, the technical achievements achieved, and even the problems in the operation of social media accounts, the obvious advantages and disadvantages of the public chain, etc.

In addition, the team also shared some derivative thoughts, such as "What innovations have been made in the development of public chains in recent years?" and "What is the growth logic of public chains?"

In addition to focusing on the Polkadot chain itself, researchers also found highlights and improvements from other public chains that performed well or poorly in the market, and used these points to think about how the Polkadot chain can break through.

5-3

Combining the views in the report and my feelings after traveling around in the sea of information, I can output the following views:

5-3-1

The most unavoidable word in the Crypto world is: "Go with the flow"

In the bear market where development is generally sluggish, funds have become conservative and have withdrawn one after another, and the enthusiasm of users to participate has also subsided.

The price trend is unstable or even sliding all the way, and the team's development progress or actual application has not met expectations, which has brought uncertainty to investors, developers, and users.

If the project party fails to come up with an innovative narrative that grabs attention and launches a phenomenal application at this time, or spends the bulk of the budget on a single financial incentive, it will not be very effective, because users are more inclined to dump the market in a precarious environment, which is more obvious than the bull market.

When the positive feedback mechanism flywheel cannot turn, it will directly lead to a decline in activity and sluggish ecological development. External investors will become more hesitant to enter the game, causing the project to fall into a death spiral.

It is likely that many project parties will feel that they are encountering a bear market at the stage when they should have developed vigorously.

This industry itself is famous for its certain "cyclicality", and it is precisely because of the cycle that there is room for you to "arbitrage".

For ordinary users, "profit" may be to buy low and sell high, but for project owners, it is to use the less valuable time in the bear market in exchange for forging a ladder to jump to the bull market with less effort.

With cycles, there are ups and downs, and with fluctuations, there is rhythm.

If you clearly focus on doing things that adapt to the trend in the appropriate cycle, and even prepare for the next cycle, there may be small bumps on the road ahead, but you will not stumble and be unable to move.

5-3-2

In a market with more people than porridge, the rise of a public chain is inseparable from the development of DeFi on it.

When DeFi prospers, the tokens on that chain are often used as native token assets.

When there are more and more DeFi games that can be played, it is equivalent to more abundant scenarios in which tokens can be applied. This playability and positive feedback mechanism make users more willing to hold tokens for a long time, thereby attracting more people to join.

Often, how many tokens can be locked in a DeFi application also reflects the liquidity, activity and user participation of the chain ecology.

As the Polkadot researcher mentioned above, it is precisely because of the slow development of Polkadot chain technology and the late launch of DeFi applications that the dividends at the end of the bull market have been dispersed, causing more than half of the market value to evaporate in the bear market.

"DeFi can empower other projects on the chain in the same way that traditional finance empowers entities. It can not only bring more composability and higher asset utilization to the assets of other projects, but also leverage more funds for the entire public chain.

DeFi is to the public chain what banks and other financial institutions are to cities. It is an important financial infrastructure. Therefore, under the premise of limited resources and time, giving priority to the development of DeFi is the primary goal of the public chain."

5-3-3

Investors pay the most for those project parties with the strongest ability to allocate "people".

It is necessary to admit that every round of prosperity must be accompanied by bubbles.

When a cyclical retracement comes, these bubbles will be the first to burst and dissipate.

Only by retaining real users and constantly attracting new people can a glass of beer be filled with beautiful foam and attract the attention of investors.

When the goal in the bear market is more focused on "people",

it will make the project side cherish existing developers and users more, share every step of the plan, and make the group more involved;

it will force the project side to innovate more attentively and come up with new narratives that can attract more people;

it will make the project side more sensitive to "scenes with people", and if web3 is empty, go to web2 to find increments.

……

You can say that "speculating on new but not old" is the golden rule in Crypto.

But "old" like Solana, with its silent cultivation and strong marketing capabilities, constantly comes up with new tricks to keep people, and can even create many new incremental entrances, such as DePIN, RWA, AI+Crypto, and actively build merchant payment tracks in the web2 world, etc.

It is like a good student who is not biased in subjects. Not only does it have a correct attitude, but it also has a little way in every doorway;

It is also like a Doraemon with a treasure bag, which makes people curious and look forward to what kind of surprises it will give people.

6. Conclusion:

There is no doubt that even if more strong rivals appear and this round of bull market is slightly weak, Ethereum still has some unique and irreplaceable advantages.

It is the first blockchain platform to implement Turing-complete smart contracts;

The Ethereum Foundation has the most mature blockchain ecosystem in the crypto world, the most active developer community, and continuous technology development and iteration capabilities, as well as strong management capabilities;

The chain carries thousands of decentralized applications (DApps), and has opened up the Pandora's box of explosive growth such as DeFi Summer and NFT craze for the crypto world.

This huge ecosystem has provided developers with a wealth of tools and resources in the past few years, and has also attracted a large number of users and developer communities.

As the expectations of Ethereum ETF applications gradually fall into place, technology continues to upgrade, and Layer 2 capabilities become more powerful, it will also bring more benefits to the market that cannot be predicted now. These often have to be observed and concluded in units of several years.

And I also feel more and more that the public's belief that some celebrity public chains have "coveted" Ethereum is just an imaginary gimmick.

Perhaps from the beginning, these project teams did not regard Ethereum as an insurmountable mountain.

Remember what Zhang Xiaoyu said,

"Be careful to choose your competitors, because in the end you may become very similar."

These public chains known as "Ethereum killers" each have their own winning magic weapon and unique narrative. Discover the chronic disease of Ethereum's limitations. I have the corresponding antidote, and I can also learn the advantages and strengths of Ethereum, and I will not think that I will be Ethereum 2.0.

They disdain to be someone's killer. In the end, they will open up a new track and walk out of their own way.

I still expect that they and other high-quality public chains standing in this bull market can step on their own ladders and jump higher in the upward cycle, bringing more surprises to the entire crypto market.

When the original intention of all project teams is to use blockchain technology to better realize decentralization and safeguard the supreme freedom of financial sovereignty, then no matter how rugged the different paths are, they will eventually return to recasting the consensus of the Tower of Babel in everyone's heart.

I still believe it.

Reference Links:

https://www.coinbureau.com/analysis/ethereum-killers-analysis/#idea-1-%E2%80%93-the-secret-to-ethereum%E2%80%99s-success-lies-in-its-simplicity

https://forkast.news/top-five-ethereum-killers/

https://www.systango.com/blog/all-you-must-know-about-solana-blockchain-platform

ckquote>

https://www.theblockbeats.info/news/36742

https://medium.com/@miixcapital/solana-%E8%B0%83%E7%A0%94%E5%88%86%E6%9E%90%E6%8A%A5%E5%91%8A-59248789aaee

https://www.chaincatcher.com/article/2117716

https://abmedia.io/the-2023-state-of-the-solana-developer-ecosystem

https : ://www.mitrade.com/cn/insights/crypto/cryptocurrency-rank-list/what-is-cardano

https://www.emurgo.io/press-news/cardano-what-to-look-forward-to-in-2024/

https://foresightnews.pro/article/detail/47354

https://www.theblockbeats.info/news/28137

https://www.aicoin.com/zh-CN/article/274940 /blockquote>
https://medium.com/coinmonks/swot-analysis-avalanche-avax-b8f63d636a0
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https://www.bitpush.news/articles/5830368
https://www.chaincatcher.com/article/2103837

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