Let's talk about the new public chain: Review of ChainBreaker Podcast Episode 6

The following is a summary of the viewpoints from this live broadcast event.

Background Introduction

Recently, many public chain tokens have seen significant price increases, and numerous new public chains, such as DFINITY, Terra, Solana, and Avalanche, have emerged like mushrooms after rain. In this issue, we will discuss these new public chains and their respective characteristics.

Blockchain Mr. Chris

This year, with the emergence of GameFi and DeFi entering TradeFi, the demand for chains has significantly increased, and Ethereum is gradually showing signs of capacity issues.

When market sentiment is extremely crazy, investing in public chains is very high risk. Many public chains have core issues, such as whether they can be decentralized and whether they are secure enough. Why is Ethereum very valuable? It is because of its security. In comparison, Ethereum Classic has experienced two or three 51% attacks, and Avalanche also had an issue in February and March.

Chain News Pan Zhixiong

We usually refer to platforms that can support applications, develop applications, engage in Web 3.0, DeFi, or various decentralized applications as public chains. The Bitcoin network can also be considered a public chain.

Beyond EVM-compatible chains, there is still a need for some new public chains to expand into areas that Ethereum cannot address, whether in terms of functionality, performance, or paradigm shifts, to supplement what Ethereum has been unable to achieve. Ethereum is still quite early, and over the years, many technical debts or issues that were not clearly considered at that time are now gradually surfacing. Although Ethereum still has a very large user base and scale, in the long run, it still needs to iterate and develop, or people need a new domain, a new place to explore more diverse applications.

Future public chains may be divided into two parts: one part has the opportunity to develop rapidly within six months to a year, including Polkadot, Cosmos, BSC, and Polygon. These chains are EVM-compatible and have been around for a while, so they definitely have opportunities. At the same time, there are also some new public chains within six months to a year that have very large opportunities, such as Terra, Solana, Avalanche, NEAR, Conflux, Flow, etc. They are expanding from different points. Looking at a longer time frame, some public chains are doing very well but may require more time to build and incubate their ecosystems, such as DFINITY, PlatON, Mina, Anoma, etc.

Terra is very focused on financial scenarios, with strong operations, marketing, and overall momentum. However, the community still has doubts about whether Terra's algorithmic stablecoin can maintain a price peg in the long term.

Solana and Avalanche have both developed rapidly recently, and these two chains use completely different consensus mechanisms or designs. Solana achieves very fast transaction performance through Proof-of-History, which can match or exceed Visa-level transaction performance at a very low cost. It is highly likely to pursue financial scenarios in the future, and Solana is also quite suitable for gaming scenarios. Avalanche has only recently started and is very focused on financial scenarios, having developed many financial applications, and it initially made itself EVM-compatible.

NEAR has recently focused heavily on the DeFi field, launching Skyward, and the Octopus Network can help NEAR create application chains similar to Polkadot. NEAR currently does not have sharding and is still a single network; the officially sharded network is expected to launch by the end of this year, significantly improving network performance.

There are two domestic projects that are doing quite well, Nervos and Conflux. Nervos excels in cryptographic fundamentals and abstraction, making it very competitive in the Web 3.0 and NFT fields, while Conflux has done a lot in NFT and DeFi-related areas.

Flow has recently done very well with the NBA Top Shot project, and its NFT-related projects are very strong, capable of acquiring excellent IPs to operate on the Flow public chain.

Regarding chain security, many public chains are still in a very early stage compared to Ethereum, which is also relatively early in its development. Therefore, the uncertainty of these public chains is still very high. For these new public chains, the safety of their consensus and underlying network needs time to be validated; a few months of successful practice cannot prove that these public chains are secure. The Bitcoin network has undergone ten years of testing, and people gradually recognized the security of the PoW consensus before they were willing to use Bitcoin for large transactions on the BTC chain.

However, it is still unclear whether chains using PoS or other faster consensus mechanisms can withstand such long-term validation. Once they can prove their security, there may be a premium, but if they cannot prove long-term security, there will be a discount.

The opportunity for DFINITY may take longer; DFINITY just launched this year. For developers, it has created a full-stack solution, an end-to-end system. It is not just about computing but aims to replace AWS or Amazon Cloud as a facility, hoping to package data storage, computing, and even all front-end elements for the DFINITY network to handle. For developers, they do not need to connect to various clouds like AWS, Google, and Baidu Cloud; they just need to consider their solutions on DFINITY and deploy them there, allowing DFINITY to help process business logic. This architecture is very complex and encompasses many elements, so its development will not be very fast and will require some time. Additionally, considering the current applications on it, DFINITY's overall valuation is still very high.

Privacy or zero-knowledge proof-related technologies are still in a very early stage. Only after more related applications emerge will people consider or realize the value and role of privacy in the entire blockchain. Currently, representative projects in the privacy space include PlatON and its pioneering network Alaya, which focuses on privacy computing and secure multi-party computing, and may eventually intersect with AI.

Regarding Mina, it is working on zero-knowledge proofs, aggregating them on the network. This blockchain is very interesting; the entire blockchain is only 22KB, allowing it to aggregate the entire blockchain's state and transactions in a space of only 22KB, significantly reducing the cost of verifying transactions. In the future, it has some derivative opportunities, such as how to combine with Ethereum to create privacy-related applications. There are also some newer chains, such as Anoma, which just completed funding at the beginning of the year, with Coinbase also participating in the investment. They hope to create a public chain or tools focused on zero-knowledge proofs, enabling developers to easily build privacy-related applications. There is also Aleo, which Coinbase invested in; these are all very early-stage projects, and some may take a long time to go live.

User Questions

1. What is the biggest challenge facing new public chains? How can they achieve breakthrough development?

Chain News Pan Zhixiong:

The biggest challenge is how to incubate ecosystems. When these public chains develop their ecosystems, they generally do this by establishing an ecosystem fund to create some Grants Programs, providing funding to help small teams get their projects started. Once the projects grow, the ecosystem foundation increases its investment. Therefore, the main issue most public chains face now is how to identify more naturally growing applications or DeFi and NFT ecosystems. If there is no way to grow naturally, it may require some investment or operational means to enable developers to continuously develop applications on the chain. Although there will also be some challenges on the technical side, I believe that how to develop applications more quickly is the biggest challenge.

2. If new public chains want to compete with Ethereum and BSC, what points are more suitable for entry?

Chain News Pan Zhixiong:

If we refer to Ethereum, there are two directions: one is to avoid all the pitfalls that Ethereum has encountered in the past while also having its own characteristics. The other is to create a completely different public chain that can do more than Ethereum; this represents a paradigm shift, and both types of projects exist.

For the first type, Flow is a great example. Their team, Dapper Labs, was also an early team that loved CryptoKitties. They have developed some applications on Ethereum and understand its issues, so when they created Flow, they considered account-level and resource design aspects very clearly, effectively addressing the problems that Ethereum has faced in the past and present, providing a sustainable operational chain, and they have deep thoughts on consensus.

The other type is completely different, including DFINITY, Mina, etc. They are fundamentally different from Ethereum, with different entry points. DFINITY can provide a full-stack solution, where front-end storage, application logic, and business logic can all be completed on DFINITY.

Mina's characteristic is that it can operate with a very small block space, and it will expand more applications in the future. Some of their attempts are completely impossible for Ethereum to achieve, including Arweave and Filecoin, which focus on storage and will not have direct conflicts with Ethereum. Therefore, I believe that these new public chains either need to be significantly stronger than Ethereum or be completely different from Ethereum, and in the future, they can find ways to connect with Ethereum or collaborate with Ethereum to expand the entire ecosystem.