Today's encryption industry is rapidly evolving towards multi-chain coexistence. Just a year ago, there was only one player in the market that could be called a public chain with a mature ecology, Ethereum. However, since the end of last year, the ecology of public chains such as BSC and Solana has gradually risen. Recently, the Polygon ecology, which focuses on the expansion of Ethereum, has also exploded.

Among these emerging public chains or side chains, which projects have the potential to become the core infrastructure of the new ecology, and whether it is possible to replicate the success of similar projects on Ethereum. This article attempts to briefly sort out the current development status of these projects and try to briefly summarize their development trends.

The three major infrastructures of the chain ecology

Ethereum is undoubtedly the earliest ecological development, and currently the most mature public chain. The current hot DeFi was first born on the Ethereum platform. So, in the ecology of Ethereum, which projects can be called key infrastructure?

Binance Smart Chain (BSC) basically inherits all the technical features of Ethereum. On the premise of reducing the degree of decentralization of the system, it greatly improves the transaction speed, and thus attracts many new users with small capital. Therefore, the projects on the BSC also show a high degree of similarity with similar projects on the Ethereum platform.

Part of the list of ecological head projects on the chain

BSC

Binance Smart Chain (BSC) basically inherits all the technical features of Ethereum. On the premise of reducing the degree of decentralization of the system, it greatly improves the transaction speed, and thus attracts many new users with small capital. Therefore, the projects on the BSC also show a high degree of similarity with similar projects on the Ethereum platform.

(1) Trading platform

If sorted by transaction volume and lock-up volume, PancakeSwap has already occupied a dominant position in the BSC network, with a total lock-up volume of US$7.9 billion and a daily trading volume close to US$1 billion.

From the perspective of the underlying architecture, PancakeSwap basically belongs to the code that directly forked Uniswap V2, and did not do too many underlying innovations. However, it has made bold improvements to Uniswap's token mechanism, and at the same time added many new functions such as lottery tickets to meet the more diverse needs of users.

PancakeSwap's token issuance has no hard cap, and it adopts a demand-based mechanism similar to Ethereum. In the early days of the project, PancakeSwap used a nearly triple-digit annual increase rate to incentivize liquidity providers and help the project successfully cold-start, thus gaining an early competitive advantage. In addition, PancakeSwap has also added a token burning mechanism, so that the total circulation of tokens can maintain a dynamic balance.

From the perspective of the underlying architecture, PancakeSwap basically belongs to the code that directly forked Uniswap V2, and did not do too many underlying innovations. However, it has made bold improvements to Uniswap's token mechanism, and at the same time added many new functions such as lottery tickets to meet the more diverse needs of users.

(2) Lending platform

Although it has just been attacked recently, Venus is still the unshakable leader on the BSC platform in terms of the total amount of loans.

PancakeSwap's token issuance has no hard cap, and it adopts a demand-based mechanism similar to Ethereum. In the early days of the project, PancakeSwap used a nearly triple-digit annual increase rate to incentivize liquidity providers and help the project successfully cold-start, thus gaining an early competitive advantage. In addition, PancakeSwap has also added a token burning mechanism, so that the total circulation of tokens can maintain a dynamic balance.

In addition to PancakeSwap, the Mdex platform has recently shown a momentum of catching up in terms of transaction volume. However, in terms of locked positions, Mdex is still difficult to compete with PancakeSwap.

Polygon

What must be highlighted here is that some analysts believe that the recent attacks on Venus actually came from the project team’s self-stealing, so readers are also requested to carefully evaluate the relevant risks when depositing and investing.

(1) Trading platform

QuickSwap is a mainstream trading platform created and vigorously promoted by the Polygon team, which currently accounts for about 70% of the trading volume of the Polygon ecosystem. Unsurprisingly, QuickSwap is also a trading protocol that forked Uniswap V2. However, due to the improved performance of the underlying public chain, transactions on QuickSwap can have a better experience and lower costs.

(2) Lending platform

(1) Trading platform

Solana

Solana is currently the most unique public chain in the comparison. At present, the Solana platform does not directly support the EVM virtual machine, but chooses to use the rust language programming. This has caused a relatively large obstacle to directly transplanting the code of successful projects on the Ethereum platform. However, due to the high development threshold, it blocked the harassment of many local dog projects.

(2) Lending platform

(1) Trading platform

Solana is currently the most unique public chain in the comparison. At present, the Solana platform does not directly support the EVM virtual machine, but chooses to use the rust language programming. This has caused a relatively large obstacle to directly transplanting the code of successful projects on the Ethereum platform. However, due to the high development threshold, it blocked the harassment of many local dog projects.

(2) Lending platform

(1) Trading platform

Other EVM compatible public chains

Fantom

xDai is a side chain of Ethereum, and it is also the most unique token economic system among all public chain platforms. It gave up the right to issue its own currency, and instead used the stable currency Dai from the cross-chain of Ethereum as the native token of the ecology (much like the linked exchange rate system adopted in Hong Kong).

The lending platform on top of Fantom is currently only Cream, with a current locked position of $8 million. Cream itself is a fork project of Compound, which was initially deployed on Ethereum, and then gradually supported BSC and Fantom networks. Although there are currently less locked positions on the Fantom platform, there is no more powerful competitor.

xDai

xDai is a side chain of Ethereum, and it is also the most unique token economic system among all public chain platforms. It gave up the right to issue its own currency, and instead used the stable currency Dai from the cross-chain of Ethereum as the native token of the ecology (much like the linked exchange rate system adopted in Hong Kong).

Currently DeBank already supports data browsing on xDai. It can be seen that in the trading track, Bao.Finance has the largest locked position, reaching 20 million US dollars, but the daily trading volume is still not high, only about 500,000 US dollars. In addition to the transaction function, the Bao.Finance protocol also incorporates functions such as synthetic assets. There is currently only Agave in the lending field, but only the pledge function is currently open, and the lending function has not yet been launched. It can be seen that the entire ecology is currently in the early stages of development, and the number of users and transaction volume are not active enough.

Avalanche

Avalanche is also a native EVM compatible public chain. The largest decentralized trading platform that has been deployed so far is Pangolin. Pangolin uses the same automatic market-making model as Uniswap, which can provide high-volume, low-fee Avalanche and Ethereum asset transactions.

Summary of competition modes for each track

1. Trading platform

Avalanche is also a native EVM compatible public chain. The largest decentralized trading platform that has been deployed so far is Pangolin. Pangolin uses the same automatic market-making model as Uniswap, which can provide high-volume, low-fee Avalanche and Ethereum asset transactions.

It is precisely because of this that we have seen an extremely monotonous development model in the public chain ecology released later: almost all trading products have forked the code of Uniswap V2 and integrated SushiSwap’s token economic model and Product Strategy.

Summary of competition modes for each track

Of course, I have to focus on the unique Solana ecology here. Not only does Solana not natively support EVM at the bottom of the public chain, but the mainstream trading platform Serum on it is also quite unique. It not only redesigned the product logic from the bottom, but also boldly integrated the transaction mode of the order book. With a large number of optimizations for professional traders, it also meets the needs of institutional investors that were previously ignored by the market. Regardless of whether Serum ultimately succeeds, its bold innovations will leave a valuable experience and legacy for the entire industry.

2. Lending platform

It should be said that compared with the flourishing of different market-making models on the trading track, the underlying business logic of lending platforms is relatively similar, and almost all of them are built on the over-collateralization model. The only thing that can reflect some differences is the risk control strategy and token incentive mechanism of each platform.

The recent attack on Venus, the leading lender on the BSC platform, can be said to be a problem in the design of the risk control system. For users and investors, apart from token incentives at the initial stage of the project, choosing a platform with more stable operations and a better risk control system may be the best way to protect their assets in the long run.

3. The underlying public chain

The success of the project must depend on the success of its underlying public chain. Therefore, the judgment of the underlying public chain has also become a problem that requires the attention of investors.

According to the current market situation, it can be said that as long as the expansion problem of Ethereum is not resolved for a day, the market will have great motivation to find new platforms with lower handling fees and higher transaction volume. Among the ecological public chains that have achieved initial success, except for Solana, almost all players have chosen the technical path compatible with EVM.

Compatibility with EVM has brought great start-up advantages to the new public chain. The new public chain can directly use many mature infrastructures on Ethereum, such as MetaMask wallet, DeBank browser, etc. match). At the same time, excellent projects in the Ethereum ecosystem can be deployed on other EVM-compatible public chains with only simple adaptation. The most typical example is SushiSwap, which has deployed its own smart contracts on eight EVM-compatible public chains.

Naturally, both the EVM and its mainstream programming language, Solidity, have some inherent flaws. But if you want to start anew, you really need a lot of energy for infrastructure construction and ecological cold start. At present, except for Solana, which has entered a virtuous circle to a certain extent with the vigorous promotion of the FTX team, the rest of the public chains have chosen to be compatible with EVM in various ways. It can be said that choosing an EVM-compatible public chain ecology is currently a more secure strategy for both investors and project parties.

Due to space limitations, it is difficult to conduct a comprehensive analysis of many other ecological public chains. But this does not mean that these public chains do not have the potential to surpass existing platforms. We have noticed that many public chain projects such as Near, Cosmos, Polkadot, Algorand, etc. are currently actively carrying out community promotion and ecological construction. It is expected that in the near future, we will see the ecology of more platforms gradually mature, which will also bring more choices and investment opportunities to ordinary users. We are looking forward to the real arrival of the multi-chain era.