Original translation: Block unicorn

Original translation: Block unicorn

At this time, it is clear that the future is multi-chain. Over the past two years, we have seen a massive increase in the number of alternative layer-1 blockchains. Thesealt L1Many of these (one layer altcoins) have been dubbed Ethereum killers, but rumors of Ethereum's death are greatly exaggerated - Ethereum is still the #1 smart contract blockchain. Most innovation and non-BTC capital exists on Ethereum, and this seems unlikely to change.

Having said that, Eth has lost some of its market share to competitors, notably Sol, Luna, Avax.

However, let's step back a bit and go back to the BSC season. BSC provides a place for users new to crypto to make quick, cheap transactions. Users new to crypto are introduced to the magic of blockchain currencies - being able to lend their money, earn yield, use a dex, etc. Eventually the BSC season ended, mostly due to the market crash last May, but also because the actual BSC was less innovative. Most of the projects are clones of the Ethereum protocol, and there are also a large number of garbage coins in the ecosystem. At the peak of BSC, the TVL was 31 billion, dropped to 12 billion, and then recovered to 16 billion. Considering how other markets have managed to recover, I find it hard to believe that BSC will now recover its peak 21% TVL across all chains. That's definitely an insane number.

For reference, today's Sol, Lun, Avax is less than the 21% BSC once held. Also, there were some technical issues with the chain - not an expert here, but I recall reading that nodes couldn't sync and blocks hardcoded to produce every X seconds also failed. All in all, it turns out you can't make a faster version of Ethereum that easily. However,The rise of Binance Smart Chain underpins Ethereum, which has correctly understood the core principles of what people want in a smart contract blockchain.

The only problem with ETH is that the fees are too high for new users to use it. As Vitalik Buterin once said: "The internet of money shouldn't cost 5 cents a transaction fee." BSC season proved that chains with low fees and good enough products (even if they're clones) can succeed. Also, there were some technical issues with the chain - not an expert here, but I recall reading that nodes couldn't sync and blocks hardcoded to produce every X seconds also failed. All in all, it turns out you can't make a faster version of Ethereum that easily. However, the rise of Binance Smart Chain reinforces the core tenet that Ethereum has correctly understood what people want in a smart contract blockchain. The only problem with Eth is that the fees are too high for new users to use it. As Vitalik Buterin once said: "The internet of money should not cost 5 cents in transaction fees.” BSC season proved that public chains with low fees and good enough products (even if they are clones) can succeed.

So this leads us to today. In many ways, AVAX can be seen as the spiritual successor to BSC, an EVM-compatible blockchain with low fees and a quality product built on top of it. It even comes with a great shitcoin ecosystem, Snowbank and Wolf Game clones, and more. In a way, shitcoins are bullish for the ecosystem, because if there's an active shitcoin that's getting a lot of attention, it means there's an actual product on-chain worth using. Otherwise, no one would use the chain in the first place. (Though I'm guessing DOGE is the only exception here, since it's effectively a shit blockchain.) Luna, on the other hand, was built with its stablecoin in mind, which makes it pretty unique. It's not a blockchain with a stablecoin, it's a stablecoin with a blockchain. Sol is also another very unique blockchain. In terms of performance, it can blow everything else out - it's cheap and fast. It relies on Moore's Law for scaling (as computers get faster, Sol gets faster). However, there isn't much going on on Sol at the moment, but I'm optimistic this will change eventually. There are some interesting financial applications that can be done with it, the one that stands out to me is CLOB (a type used for saving files in databases). I also think there's a lot of potential for games on Sol, and the fact that FTX signed a deal with TSM is a big indicator that Sam has games in mind for Solana. Also, making Bankman disappear is usually a stupid move - I don't think anyone on this Odaily has more influence in the crypto and tradfi world than he does. Finally, many new layers offer large incentive programs to entice users to build/bridge. This has been very successful in attracting these alternative chains, helping to dent Ethereum’s market share. There is no doubt that more people joined these alt L1s than last year's L1 Eth.

All in all, there are many public chains, each with their own unique proposition as to why users should use them. So the question now is, what is the best way to invest in this idea of ​​a multi-chain crypto ecosystem? The easiest way is to buy the native tokens of all these chains and pray that they come out in 5 years.

Personally, I'm a big fan of infrastructure staking. In order to connect all these chains, we need something that can be used to transfer assets from one chain to another. This leads us to cross-chain bridges, I'm personally a fan of Synapse, cross-chain AMMs are really innovative + they have a great team. However, I think any bridge with good use and innovation should be fine here. You want to bet on a well-used chain bridge in the future, keeping factors like current market cap/FDV (fully diluted market cap)/token economics in mind. Also keep in mind statistics such as the total amount of bridges, the percentage growth over the past X time, the number of chains available for bridging, etc.

Another thing that I really value is the ability of blockchains to directly interact with each other, which I think we should callIBC (Blockchain Interaction), inter-blockchain communication, etc., it already exists. I hold ATOM and am bullish on the Cosmos blockchain Internet. One of the current problems with Ethereum (by design) is that it uses a mainframe approach on a shared state machine. This means that every transaction is processed by everyone. (In the future, I imagine a lot of Ethereum usage will move to other chains that are more specialized for different types of work, but for now, Ethereum is one of the few things that already has a lot of garbage built on top of it one, and it's hard to move this stuff somewhere else overnight + usually there's no better place to go) But 99% of the time we don't care what other people are doing on the blockchain. So what if we had a bunch of blockchains dedicated to different purposes, separating all the work, and those blockchains could communicate and work together when needed? That would be cool, and that's what IBC can do. IBC also allows you to do things like send ERC-20 from Ethereum to Atom. However, doesn't that make chain bridges useless? So what if we had a bunch of blockchains dedicated to different purposes, separating all the work, and those blockchains could communicate and work together when needed? That would be cool, and that's what IBC can do. IBC also allows you to do things like send ERC-20 from Ethereum to Atom. However, doesn't that make the bridge useless? So what if we had a bunch of blockchains dedicated to different purposes, separating all the work, and those blockchains could communicate and work together when needed? That would be cool, and that's what IBC can do. IBC also allows you to do things like send ERC-20 from Ethereum to Atom. However, doesn't that make the bridge useless?

The difference between IBC communication and a bridge is that a bridge is like a direct road between blockchains, while an IBC is like a highway that any blockchain can use. Bridges must be built individually between each blockchain, which takes time and resources. IBC provides a way that blockchains can connect to other layer 1 chains without building direct bridges. So which is better between the two? Depends on what you need. IBC is more of a general solution, while direct bridge is kind of like a fast track. I think a layer 1 blockchain with enough interaction between a pair will naturally create a need for a direct bridge. I'm relatively confident that eventually there will be some sort of incentive for people to use bridges because at some level bridges are competing to transport your assets.

An interesting prediction from Messari's 2022 report: the most popular L1<> L2 / L1 <> L1 / L2 <>The L2 bridge protocol will have higher daily transaction volume than the most popular centralized exchanges within five years.

I encourage today to consider bridging agreements similar to the American railroads of the 1800's, there are many places to go and these companies are working tirelessly to connect the country. This is very similar to all the different bridges connecting different blockchains today.When investing, consider which railroad company/bridging agreement you think will build the best/most used roads in the future.

Here's a really good one from @XLBao_ about the current save chain bridgespreadsheet link。

I think right now everyone is happy that bridges exist, but eventually bridges will become the norm and bridge protocols will be forced to compete for users. We've only had problems with blockchain scaling so far, but if usage is large enough, I think we might have the same bridge traffic problem. We're far from having bridged scaling issues though. Finally, in the far future, I think we may only see a handful of bridging agreements, with better bridging establishing dominant brands and gobbling up competitors.

Another thing to consider is how each bridge is built, which I won't get into too much because I think Dmitriy Benzon's article "Blockchain Bridges: Building Networks of Cryptonetworks" does a better job than I do. However, if you look at the diagram above that I extracted from his article, building bridges is similar to the blockchain trilemma of scalability, decentralization, and security. It's hard to do all of these things well, and prioritizing one often means making sacrifices in the other.

This article somehow turned into a really big bridging article, but when it comes to the rise of multi-chains, another thing I want to mention is stablecoins. I think their role in helping new chains grow is quietly underestimated because we tend to take them for granted. The two I particularly want to highlight are USDC and UST, though I'll also include USDT at the bottom since it's the oldest and largest.

All three stablecoins exist on multiple chains and currently have a market capitalization of around 130B.

Fast Stablecoin Tangent: Stablecoins really exploded in 2020, and that's a good thing for crypto. By switching from coin-margined futures to stablecoin-margined futures, it is harder to create brutal cascading liquidation candles, reducing crypto market volatility. They are much stickier in terms of total cryptocurrency market cap as BTC can go up to 40% in a week, but technically a dollar is always a dollar (disregarding inflation).

Regardless, stablecoins are helpful because you can go to a new chain and spend your stablecoins there, which is a smoother way to interact with the new chain than selling stablecoins to buy tokens experience. Also, no one wants to be on an illiquid chain, the stability ratio benefits everyone, stability makes the chain more accessible, has deep liquidity, and gone are the days when only BTC was denominated on-chain. JOE (AVAX's comprehensive DEX, covering lending) has 200m in AVAX/USDC, RAY (Slanade DEX) has about 400m in USDC and USDT/Sol pools, BOO (DEX of Fanton chain) has 90m USDC/FTM and so on. They are very similar to the way Roman currency was accepted in Europe, Asia and Africa in ancient times, and good money allowed the economy to flourish. That said, I don't really know how to bet on stablecoins from a purely multi-chain perspective - they seem to me more like enablers of a multi-chain future.