Coinfund: Why are we investing in the Cosmos incentive smart contract chain Archway?
By rewarding developers for the value they contribute to the network, it reshapes the way value is created and shared in the blockchain ecosystem.Original Author: Billy Dishman
Original Title: 《Archway's Developer Rewards Revolutionize How Value is Shared Across Blockchain Ecosystems》
Compiled by: Hu Tao, Chain Catcher
The past few years have witnessed the launch of multiple smart contract platforms, each making certain trade-offs in scalability, decentralization, and security. Most innovations have focused on improving scalability, while the innovations in the token economics of smart contract platforms have largely remained unexplored.
Historically, the token economics of smart contract platforms have been used to incentivize users to hold tokens to pay gas fees and validators to hold tokens to receive inflation rewards. However, the token economics have mostly overlooked the most important component: developers! Developers are the lifeblood of smart contract platforms, and the dApps they create can attract users and generate millions of dollars in daily network fees. This brings us to Archway.
We are excited to announce that we have invested $21 million in strategic financing in Phi Labs, the contributors behind the Archway protocol. This round of financing was led by Hashed and CoinFund, with participants including 1Confirmation, IDEO CoLab, Blockchain Capital, Wintermute, Figment, Chorus One, stake.fish, Lemniscap, Hypersphere Ventures, and Cosmostation.
The Archway protocol is an incentivized smart contract chain on Cosmos that reshapes the way value is created and shared across blockchain ecosystems by rewarding developers for the value they contribute to the network. As developers launch dApps on Archway, they will receive a portion of the network's inflation rewards and gas fee rebates as incentives.
The revenue-sharing model is designed to create a positive feedback loop that attracts developers with incentives, leading to users, liquidity, and more dApps, thereby providing developers with a recurring stream of income rewards. Developers and their respective dApps can allocate inflation rewards and gas rebates in ways they deem appropriate. For example, they can use the funds to subsidize gas fees, fund core teams and development work, seed liquidity pools, create bounty and grant programs, liquidity mining, governance rewards, and more.
In addition to the novel developer rewards, the Archway protocol also prioritizes several key technical implementations:
- Scalability and Interoperability through Cosmos: Archway is built on Cosmos and supported by the Tendermint consensus, a widely adopted consensus mechanism in the industry for building proof-of-stake systems. Archway uses Cosmos's Inter-Blockchain Communication protocol ("IBC") for cross-chain communication, allowing for the free exchange of assets and data among over 250 projects in Cosmos, which currently have a total digital asset value exceeding $100 billion. In addition to interoperability among Cosmos, Archway provides interoperability with other ecosystems through its native Gravity Bridge integration for Ethereum-based assets. Finally, Archway uses a complete WebAssembly (Wasm) implementation to provide cross-language support and web3-compatible APIs.
- Gasless Transactions: The requirement for users to hold native smart contract tokens to pay gas fees has been a barrier to entry for users and may need to be addressed to join the wave of mainstream users. Archway provides developers with a module that subsidizes gas fees on behalf of users, aimed at helping dApps offer a better onboarding experience and improve user retention.
- Enabling Smart Contract Fees: Archway allows developers to add custom fees for interacting with their smart contracts, similar to a built-in licensing model. Due to the inherent composability of blockchains, smart contracts on Archway can be implemented across multiple dApps and earn fees when users and protocols interact with them.
The Phi Labs team is led by Griffin Anderson and consists of individuals from the Ignite team (formerly Tendermint) and some of the most mature projects in the blockchain industry. We look forward to Archway's developer-centric focus fundamentally changing the way value is created and shared in the blockchain ecosystem.
