Produced by the Polkadot Ecological Research Institute, it must be a boutique
(The article is very long, it is recommended to bookmark it before reading)
Produced by the Polkadot Ecological Research Institute, it must be a boutique(The article is very long, it is recommended to bookmark it before reading)Polkadot Ecological ObservationThrough the observation of ecological niches, we can perceive the overall situation and clearly understand the entire development of Polkadot; we can also observe the details and find out which ecological niches are in a state of fierce competition or a blue ocean
background
. Only by having a clearer understanding of Polkadots ecological development, as an investor, participant or developer, can we better grasp the dividends of Polkadots ecological development. (This article will inevitably involve projects, and it is only used as an expression of opinions in the article, not as any other suggestions.)
background
If there is any ecological development in the past year that can be compared with the Polkadot ecology, perhaps the first to bear the brunt must be the glorious moment of Binance SmartChain (hereinafter referred to as BSC), and BSC has also become another model of ecological construction. A benchmark.
According to BSCProject data, as of July 12, there are more than 727 projects in the BSC ecosystem, such as DeFi, NFT, tools and infrastructure, and the number of addresses on the chain is as high as 83,389,946. Great results after a month.
When it comes to BSC, we can’t help but think of the ecology of Ethereum. After all, the number of users and active addresses of the two are about the same. Even BSC has surpassed Ethereum, which has been developing for several years, in some data. Of course, we The existence of the two cannot be simply compared from the data. After all, Ethereum belongs to the huge ecology that was established step by step in the early stage. In the case of giants, they have found a way to develop in a different way, which is more like Pinxixi, which has emerged in the past two years.
Therefore, we don’t need to judge whether the Ethereum ecology or the BSC ecology has developed better. In a sense, this is meaningless. Instead, we should learn some successful replicable experience from it, so as to achieve The excellent quality of take what is good and follow it, especially for the Polkadot ecology that still has a lot of room for development at this stage, is worth learning from and learning from many ecological projects.
Therefore, this article will review the development path of the BSC ecology, explore some places that can be used for reference, and provide reference for the high-quality projects of the Polkadot ecology. As the saying goes, Three people must have my teacher.
Review the development history of BSC
Unlike Ethereum, which gradually grows bigger and stronger, BSC is more like stepping on certain points and rising rapidly. It can start an ecology so quickly in just over a year, and the projects in the ecology Both money and funds are very rich, and there must be a successful code worthy of our digging.
We might as well briefly review the development history of BSC, and deeply analyze how BSC has achieved success step by step.
Around 2017, the cryptocurrency field ushered in a wave of bull market. In this bull market, new and old exchanges competed with each other and showed their skills. The exchanges that finally survived the battle also each encircled their own one-acre three-point land. At this time, the global exchange pattern has initially formed.
Among them is the Binance Exchange (Binance), which has become the largest cryptocurrency exchange in the world, with the currency exchange fighting for a position. During this period, Binance also issued its own exchange platform token BNB, and designed a series of incentive mechanisms around BNB to empower BNB. However, the mainstream thinking in the blockchain world is still decentralized. As a centralized role like an exchange, there is always a centralized hat on its head. Therefore, exchanges such as OKEx, Binance, and Huobi They are also constantly trying to cut into the field of decentralization, and these three exchanges seem to have chosen the same direction - the public chain - very tacitly. In 2018, they announced their own public chain plans.
Subsequently, in April 2019, Binance launched its public chain project - Binance Chain (Binance Chain, hereinafter referred to as BC, where BC is not the BSC we are talking about). The role of BC is to build a decentralized asset issuance and circulation ecosystem around Binance Dex, and provide Binance Dex with a high-throughput, low-latency blockchain infrastructure. Therefore, functionally, Binance Dex can provide functions such as the issuance, use and exchange of tokens. At this time, the main idea of Binance is to decentralize its core business, that is, to decentralize the trading part, and build an ecology based on this. Therefore, there will be Binance Dex. At the same time, in order to meet the performance requirements of Binance Dex for low transaction latency, high throughput, and greater transaction depth, BC chooses to adopt the PBF and DPos consensus based on the Cosmos Tendermint protocol. To improve the code, and to ensure the user experience, BC does not have a smart contract.
With Binance promoting BC through a series of marketing methods, and many projects and assets are also issued and traded on BC, everything seems to be going well. However, the good times did not last long, just like when Nokia was in full swing, who would have thought that Apple would start anew and create a smart phone, and then pull Nokia down from the altar, but he himself reached the top, and some earth-shaking events occurred in the field of cryptocurrency The change. The sudden emergence of DeFi projects such as Compound and Uniswap has gradually attracted more funds to participate in them. This wave of DeFi has brought new opportunities. Due to its decentralized characteristics, it has attracted a lot of funds and has begun to affect the The business of centralized institutions in the cryptocurrency field.
At the end of 2019 and the beginning of 2020, the influence of MakerDAO, Compound, and Uniswap gradually increased, and the volume of the entire DeFi was close to 1 billion US dollars. Under such circumstances, Binance has seen the huge potential of DeFi as well as the limitations of ETH, and it has clearly seen the possible future development. Therefore, without affecting BC, Binance created the Binance Smart Chain (BSC) in April 2020 and officially launched the smart chain in September of the same year. BSC is a blockchain that runs in parallel with BC. The assets between the two can be interoperable. Not only can smart contracts be created, but also BNB, one of the worlds top encrypted assets, has been introduced to form a pledge mining mechanism.
The design idea of BSC emphasizes two points, one is to ensure high performance and low transfer fee rate, and the other is to be compatible with the Ethereum virtual machine EVM, which can quickly access the Ethereum ecosystem. With the help of its huge ecosystem, the developers of Ethereum The rapid access to BSC has led to the rapid rise of the BSC ecosystem, and behind all this is Binances determination to target DeFi.
By introducing the Proof of Stake Authority (PoSA) consensus mechanism, BSC reaches a consensus by pledging BNB, requiring a total of 21 validators. In the end, BSC achieved extremely low transaction fees, a high-performance network that can generate a block every 3 seconds, a daily transaction volume of 200,000, and an average gas fee of $0.05 per transaction, greatly improving the use of Binance Chain and BNB efficiency and scope of application.
Although the number of verifiers is too small, many people criticize its centralization, but its excellent user experience and extremely low transfer rate are enough to make many users ignore this point. In September of the launch of the BSC, Binance also launched a $100 million support fund to guide its development.
Of course, at that time, BSC hadnt risen so quickly, and the real ecological rise of BSC came from the great environment that gave it a good opportunity. At the beginning of 2021, with the sharp rise of BTC, ETHs DeFi ecology will once again exert its strength. However, the flaws in the use of Ethereum, low transaction performance, high transfer fee rate, and high use costs have also seriously restricted the development of DeFi. , which directly gives an opportunity for the ecological development of other public chains.
The ecology of BSC developed rapidly at this time. Since BSC is compatible with EVM, and can provide faster transaction experience and lower transfer fees, it will soon run in the two application directions of AMM (PancakeSwap) and lending (Venus). With the emergence of two leading players, these two applications can now compete with Uniswap and Compound on Ethereum, and BSC has become a large ecology that cannot be ignored with more than 600 projects and 12 billion US dollars locked. (The reason why BNB has risen so much is also because the ecological development of BSC has changed the logic of BNB from a platform token to a public chain currency.)
Ecological development formula
1. Take BSC as a mirror to explore the formula of ecological development
Based on the successful development of BSC, we roughly sorted out a formula for ecological development. This is just one of the ideas summed up based on the logic that has been successful so far, and it does not mean that there is only one idea. The formula is as follows:
Ecological prosperity = [project (developer) + user + capital] * traffic * exchange empowerment (engine) * environment
How to understand this formula?
Three Basic Resources
The development of a public chain ecology is like starting a business or fighting a war. It is nothing more than the deployment and use of the three basic resources people, money, and things. The things in the public chain originally refer to materials, materials, etc. , here we can understand it as an application or a project. The three basic resources of the public chain are projects (developers), users, and funds. These three together form an ecology, but they affect each others development.
Things, that is, applications or projects in the ecology, are important carriers of funds and participants, and are also the most basic constituent units of the ecology. To do a good job in ecology, the quality and quantity of things must be guaranteed. (Tron is a typical example of the latter not doing it, and the ecology is all supported by Justin Sun).
And people follow the heat. For the new things, it is difficult for most people to quickly attract new projects. After all, most people are unwilling to jump out of their comfort zone, or they dont trust the new things. , need to be attracted by interests, or have enough traffic to import.
Money plays the role of the blood of ecology, and projects without capital participation will not succeed. The funds here include not only funds to support the development of the project team (funds in the primary market), but also funds that are optimistic about the project’s participation in transactions and applications based on the project (funds in the secondary market).
However, if a project is mediocre, but attracts users through marketing means such as announcements and airdrops, or setting up some incentive mechanisms such as high APY returns, the project will also form a tower due to its popularity, forming a certain potential energy and attracting more funds. Entering, the project party also has more funds and resources to improve the original mediocre project to better.
flow
Similarly, if a project is mediocre and there are no users involved, but if you can find some KOLs with a lot of funds and great influence, import a lot of your own funds to enter the market, and promote the project, with the help of these giants Influence, it also endorses the project invisibly, and can also attract users and follow-up funds to enter the market, and finally make the project successful. Many DeFi projects are sparked by some giant whales digging their heads.
flow
Needless to say, the role of traffic, because the Internet we live in has given us a deep understanding of the huge role of the traffic economy. In fact, this round of BTC has risen from 10,000 US dollars to more than 60,000 US dollars, which is the huge driving force of traffic. This is inseparable from the continuous momentum of some traditional companies and capital, as well as the spare no effort of traditional media to promote Bitcoin, which makes Bitcoin popular outside the circle. , Attracting a lot of traditional capital into the encryption market has created such a high increase. Similarly, Dogecoin also follows the same logic. Therefore, traffic is a huge booster. If the traffic is used well, it can bring massive funds and users to the entire ecology, so I won’t go into details here.
Exchange empowerment
What kind of role is an exchange? It is itself an institution with a large number of users, rich capital flow, and trust endorsement. Since it is a centralized organization, it can freely create various marketing methods or publicity methods to empower an ecology. In addition, the exchange is an upstream institution in the cryptocurrency ecology. Not only is it familiar with how to empower projects at the level of secondary market transactions, but also at the level of the primary market, the exchange’s investment in the ecology is also the most important part. For example, in the entire cryptocurrency market, the two major exchanges, Coinbase and Binance, are among the best in the investment in start-up projects.
Therefore, for the empowerment of a public chain, the exchange can invest in projects or applications on the public chain in the primary market, and launch these projects on its own exchange, and through a series of market activities, will Its own huge user base and capital flow empower these projects, and after successfully withdrawing from the secondary market, new funds will continue to be invested in other projects on this public chain. One more thing I have to mention is that the exchange has rich customer service to solve many problems of users during the participation in the new project, which is equivalent to improving the ease of use of the project at the level of use and lowering the threshold of use, which is also for The entry of more participants and funds has laid the foundation.
On the other hand, if the performance of these projects can support the entry of these users and funds, and develop better, it will in turn bring more users and funds to the exchange, and even serve as an excellent case for Exchange endorsement. In the end, a virtuous cycle of win-win between the exchange and the public chain ecology will be realized.
environment
The general environment, that is, the current market trend of cryptocurrency, because the current cryptocurrency market has doubled in terms of market size and the number of users compared to last year, it is no longer possible for traditional finance. A global capital market that has been ignored. On the contrary, due to the entry of new traditional capital and general users, the cryptocurrency market has been inseparable from the traditional financial market. It is no longer a small ecology of enclosure, but an alternative asset market influenced by the traditional financial market.
The development of a single public chain is like a flat boat on the water. When the market is good, it can travel thousands of miles along the current. When the market is not good, it is not easy to sail against the current alone. hedging effect. Therefore, the ecological development of the public chain is the most surging under the smooth bull market.
2. Solana also has the same effect
BSC, as a public chain in the exchange, has made a good start, so we can also see the Heco chain developed by Huobi, and its development is also similar. But they are all public chains of exchanges. For public chain projects that are not public chains of exchanges, is this formula applicable? I don’t know if it’s a coincidence, but the development of Solana fits perfectly with this formula. We might as well take a look at Solana’s situation to verify our formula.
First of all, the infrastructure of the Solana public chain is relatively good, and there are many innovations in technology. Its unique PoH history proof algorithm greatly reduces the time spent on block synchronization; at the same time, Solana has also written a multi-threaded virtual machine Sealevel, which realizes parallel transfers, while other public chains can only process one transaction at a time ; Solana also borrowed BitTorrent technology to design the Turbine block propagation mechanism, which can greatly improve the efficiency of verifying block information and greatly reduce the time required for information communication; there are also solutions such as the scalable memory solution Cloudbreak, replicator node network Innovations such as Replicator, the mempool flow mechanism Gulf Stream, and the POH-optimized PBFT consensus algorithm Tower BFT consensus algorithm have finally made Solana the most efficient public blockchain with less block delay, faster confirmation speed, and less network congestion. Chain, measured the performance of Solana, TPS can reach up to 65,000, and the cost of transfer is less than 1 cent.
Such technical features have attracted the attention of many developers and capital to Solana early, so although Solana did not quickly copy the mature projects of Ethereum to Solana through compatibility with EVM, the ecology of Solana does not have to worry about no projects. Speaking of which, in addition to the mature project code brought by Ethereum, there is also a mature business model. Therefore, when developing a project on Solana, you don’t have to worry about whether the business model will be successful.
However, these cannot explain why Solana can rise rapidly. The real core factor is the addition of SBF and FTX behind it and the opportunities brought by the general environment.
Sam Bankman-Fried, referred to as SBF, is the founder and CEO of the FTX exchange and the founder of Alameda Research. Among the 11 encrypted billionaires announced by Forbes in February 2021, he ranked with a net worth of 4.5 billion US dollars Second place, with 220,000 followers on Twitter.
Since July 20, 2020, SBF began to post a series of views on DeFi on Twitter, and finally on July 27, 2020, SBF finally mentioned its favorite project Solana, and then conducted a detailed discussion on Solana commentary.
After laying the groundwork for 7 days of hunger marketing, it finally revealed its main course. On the same day, Serum, a DeFi exchange based on the high-performance public chain Solana, also released the project white paper on the same day and announced that it will be launched in the near future. SBF is one of the consultants of the decentralized exchange Serum. SBF is a well-known KOL in the circle. From this incident, we can also see that he knows how to get traffic and attention. With his wonderful operation, many users have also begun to pay attention to and understand Solana. The secondary market also gave a wonderful response, from 1.7 US dollars on the day to a maximum of 4.7 US dollars at the end of August.
Naturally, Serum was launched on SBFs FTX exchange soon, and SBF became the spokesperson and promoter of Solanas ecology, sharing the progress of Solana and its ecological projects every now and then, and Solanas ecological projects were also launched on the FTX exchange one after another .
Of course, another important factor is the opportunity brought by the general environment.
This point is just like when we briefly analyzed BSC before, it is also at the beginning of 2021 when ETHs DeFi ecology is developing again, but the development of Solanas ecology is a little slower, but this does not prevent Solanas ecology from breaking out in April.
Therefore, in summary, it seems that this formula is practicable. Then, next, we will use this formula to see what possible paths there are for the rise of Polkadot’s ecology.
The possible path of Polkadots ecological rise
Polkadot is different from the general public chain. What it does is a network of blockchains that link all kinds of blockchains at a lower level than the public chain. Therefore, if its ecology is to be developed, what is needed is to access Polkadot’s parachains or existing public chains accessed through transfer bridges enough, and the development of parachains is also relatively good, so that it can be regarded as the real development of Polkadot’s ecology Woke up.
In this regard, we need to focus on two points. The first point is how many existing public chains will be connected to Polkadot, and whether there are applications that can divert people, money and property from these existing public chains after accessing Polkadot; The second point is whether the native parachain project in Polkadot ecology can develop its own ecology well.
For the first point, the currently officially supported BTC-ETH transfer bridge has been developed by a dedicated team for a long time, and the official BEEFY protocol has been launched for non-Substrate chains, which can make it easier for existing public chains to Linking to Polkadot, it can be said that the foundation for more projects to be connected to Polkadot already exists. Then, if certain applications of the Polkadot ecosystem (such as DeFi, NFT) can activate the ecology of these connected husband chains, or expand the capacity of these husband chains and endow them with new functions (such as privacy, smart contract functions) or The Polkadot ecology can be made bigger and stronger. Of course this is just one path.
As for the second point, let the ecology of Polkadots native parachain project be established, which returns to the formula we introduced in todays article. According to the formula, taking Polkadot’s current top three parachain project parties in Kusama as an example, all three are EVM-compatible parachains, which means that mature projects on Ethereum or It is a mature project based on EVM migrated to Polkadot ecology. From the perspective of the ecological development on ETH, BSC, and Solana, the ecological development of each public chain has a high degree of similarity. The fastest and best application of these ecological developments is AMM and DeFi projects for lending , and the business of these projects is not complicated, and the business logic is simple, so it is easy to establish, so at the level of things, there is no need to worry about Polkadots several parachains.
In terms of participants, after years of brewing, Polkadot already has enough fans, but what we are talking about here is Polkadot ecological projects. How to convert Polkadot fans into fans of these ecological projects is a key point. , At the same time, Polkadot still has a lot of room for improvement in terms of user experience. Whoever can lower the threshold for users to use will be able to get more user participation.
We might as well imagine, according to this formula, what the most ideal development path for Polkadot would be: under the premise that the economic environment is relatively stable, and of course it is best to be a bull market, there is an exchange with sufficient influence to stand up and make a decision. Shouting to empower Polkadot or a certain parachain, through investment empowerment, etc., the mature AMM or lending project based on Ethereum or EVM will be copied to a certain parachain of Polkadot, And make good use of the unique advantages of the Polkadot ecology of cross-chain assets, and make some innovations in the project; then use your own promotion methods and influence, bring some KOLs, and jointly bring media traffic and potential energy to the project. Introduce capital empowerment, and do a good job in user education and training, lower the threshold of participation, and increase the user base; and then exit through the secondary market, and then invest in the project support of Polkadot ecology; finally form an exchange and a public chain A virtuous circle of ecological win-win.
postscript
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postscript
Pay attention to the official account
Therefore, we decided to establish a Polkadot ecological group, which can openly discuss all Polkadot ecological projects. Everyone can objectively share their views on each project, understand the development of each Polkadot project, and exchange information to seize opportunities together.
Pay attention to the official account"Polkadot Ecological Research Institute", Reply to Join the group, you can talk about Polkadot with many fans.
