Has the cross-chain wind direction changed in 2021? BSC, Polkadot, and Layer 2 start the "Three Kingdoms Competition"

At the beginning of 2021, the development of blockchain has come to a cross-chain trend, which is reasonable but unexpected.

It is reasonable, because everyone knows that this year's tuyere, cross-chain is the hottest one among them. The Cosmos IBC agreement officially announced in February that the Polkadot KSM parachain slot auction is just around the corner, and two cross-chain stars have joined hands to bring the blockchain into the "cross-chain year".

Unexpectedly, it was because BSC and Heco, as well as a number of high-speed public chains, were "forced to rise" under the condition that Ethereum Gas remained high every day.

Especially BSC, from no one in the last year, to more than one billion U.S. dollars in lock-up volume in December, to 1 billion in lock-up volume in January, and then directly exceeded 10 billion in February, it can be said to have earned enough eyeballs. This kind of cross-chain from ETH to the "relatively centralized ETH imitation chain" is something that everyone never expected.

From the rise of BSC this time, we may be able to find clues about future cross-chain trends.

01 Horrible user habits

Ethereum Defi can be said to have been popular for a whole year, from 2020 to 2021, it has never stopped.

However, look at other public chains, whether it is EOS or TRX, Qtum and other so-called "Ethereum killers", although they have successively launched their own Defi ecosystems, they are basically no one cares about. Although the above trading experience is more silky, the fees are lower.

ETH alone supported the Defi ecosystem for a whole year.

By 2021, the gas fee on ETH has finally reached an unacceptable level for ordinary users. A normal transaction on Uniswap is almost 30-50 US dollars, and the withdrawal of liquid mining, deposits and other fees are approaching hundreds of US dollars.

Both ordinary investors and funds are looking for a place where ETH congestion and Defi overflow. As a result, among the "Ethereum Killers" and "Ethereum Friends", the choice of funds and users turned out to be the BSC that was generally less optimistic before.

The reason is that in addition to backing on Binance, the world's largest trading platform, user habits may be one of the very factors.

Defi users, especially experienced players, are basically using Metamask, and everyone is very accustomed to making a transaction and spending a gas transaction process.

Senior investors should know that Binance launched a Binance chain in 2019. Based on Cosmos development, its DEX is the largest application on it. However, no one took care of that chain or DEX. Created a BSC.

On the BSC, because it is the fork of ETH, it is simplified to your address and ETH, so the private key is also the same set. You can directly switch from the ETH network to the BSC network by changing a parameter on the Metamask; all transactions, authorizations, and authorizations on the BSC The contract call is exactly the same as on ETH, with zero cost of learning and adaptation...

In other words, you have the same user experience on ETH, and the transaction speed is many times faster. As for the handling fee, it is even less cheap.

In addition, on the BSC, because it is backed by Binance, the largest Dex Pancake can also trade many other mainstream Tokens, such as Dot, Filecoin, Band, etc., that cannot be bought on the ETH chain such as Uniswap. And the depth is quite good. For now, this is the only DEX that can trade these non-ERC20 mainstream coins (only WBTC can be traded on Uniswap).

Then you can see that TVL has been slowly increasing after BSC went online, and users have slowly increased, until recently ETH became "unusable" and went directly into the blowout state.

Do you say that the ETH experience is the best? I don’t know, but at least for now, this is the habit of most users. Just as our current general keyboard layout has long been proved to be not the most scientific layout method, but all keyboards that challenge this layout method fail without exception. Up.

This may also be a big reason why other public chains such as EOS and TRX have not been able to use the way of buying CPU and memory. In other words, even if multiple chains coexist in the future, whether they are supported by Metamask or whether a parameter can be changed in it to cut the network with one click may be one of the key factors related to whether a chain can obtain users.

Of course, you might say that the BSC chain is not decentralized at all, which goes against the spirit of blockchain decentralization!

So the question is, why is there still tens of billions of funds poured into BSC? Is it just because of the money-making effect, so I introduced the next topic, BSC's "Schrödinger's decentralization".

02 "Schrodinger's Decentralization"

The first thing to admit is that compared with ETH, the degree of decentralization of BSC is of course much worse.

But again, you can't say that BSC is a centralized thing. After all, the account private key is in your own hands, and Binance cannot take a penny from your account.

So, what can it do? Control the node or influence the node, and then... destroy the BSC, destroy the entire chain, then naturally your assets on this chain will be wiped out.

Is Binance capable of doing this? I think at least at this stage, there is a high probability. But will it do this, I don't think it will.

In fact, regarding the issue of “decentralization”, EOS once raised a question in the debate between DPOS and POW. Compared with the 21 voting nodes, the BTC and ETH mining pools controlled by several mining tyrants, whether Is it really as decentralized as everyone thinks?

Strictly speaking, the combination of the three or two mining giants can completely destroy BTC or ETH, just as Binance can destroy BSC.

However, no one would do it, because it is not in their interest. The big reason or the cornerstone of Bitcoin's operation so far has not encountered major security problems is this game system based on economic benefits, or benefits.

In most cases, maintaining a chain and being an honest miner/node is more in your interest than doing evil. Of course, the purpose of blockchain decentralization is from "do not do evil" to "cannot do evil".

However, in fact, from a technical perspective, unless ETH2.0 really realizes the previous vision, there can be tens of thousands or even hundreds of thousands of block producers, and the hardware requirements are minimized, otherwise the concept of decentralization is usually done at all. Less than.

We will continue to talk about this topic in the next chapter. Therefore, the current best result is that the market value of BTC and ETH is large enough (PoW or POS chains with small market value have been attacked everywhere, and the market value is much more important than the degree of decentralization in terms of security) , And Permissionless-the permissionless public chain, which is exactly what BSC is working on.

Currently, BSC has 21 nodes. In the past 5 months, 8 nodes are operated outside Binance. Binance also plans to open all 21 nodes in the future. At that time, BSC is likely to be positioned as a label such as "Ethereum Assistant" and "Better EOS".

Or in fact, from another angle, you may be easier to understand what I'm talking about. Suppose you have one hundred million stablecoins in your hand, and you want to find a place to participate in liquidity mining, play Defi, borrowing and so on.

When this amount of funds is reached, the size of the income may be second, and the first is the safety of funds. Ethereum is undoubtedly the first choice to do my part, but besides Ethereum, which chain would you dare to put hundreds of millions of dollars on?

The answer in your heart is undoubtedly the embodiment of your confidence in each chain. At this time, voting with your feet is the most honest body.

03 Cross-chain Three Kingdoms Struggle for Hegemony

The situation in 2021 is already very clear. Not only may ETH2.0 fail to produce a general Layer 2 solution within half a year, it may not even come out within one year.

Then in the case of ETH Layer1 overflow, there will be three outside pools to catch the overflowing water.

1. Polkadot: Cosmos is an orthodox cross-chain.

2. Compatible with other public chains of EVM.

In addition to the high imitations of ETH such as BSC and Heco mentioned above, there are also high-speed public chains such as Near, Solana, Avax, and FTM. The Ethereum killer battle in 2018 will now be on Ethereum in 2021. Reappearing between the assistants...

For now, other seemingly "decentralized" high-speed public chains often don’t give people the confidence to keep up with semi-centralized public chains such as BSC and Heco. Think about the question I asked at the end of the above chapter, and you will be happy. Know well.

3.Layer2.

With the new shared security model announced by Cosmos, it can be seen that Polkadot and Cosmos, including ETH2.0, are essentially going in the same direction, that is, relying on the relay chain/beacon chain/CosmosHub to maintain parachains/points. The core theory of the security of slices/hubs can be regarded as variants of the sharding model.

And BSC, Near, and Solana, respectively, rely on the security of the nodes on their respective chains. The security of native POS has yet to be verified.

At that time, all "Ethereum Assistants" will definitely do their best to find ways to compete for various Defi projects and users overflowing on Ethereum.

The trend that has emerged is that many projects have begun to plan to migrate BSC, and some projects that have not yet been launched plan to log in at the same time on ETH, BSC, and even other public chains. Multi-chain operation of Layer 2-the tone of Layer 2 this year is basically set. , That is Rollup.

The channel is basically falsified, or it can only appear as a Layer 2 auxiliary technology, and it does not even have the meaning of issuing coins.

Sidechain-essentially the same principle as the Layer1 public chains of BSC and Near. It connects to Ethereum through a bridge. However, the general Layer2 sidechain is far less competitive than BSC, Near and Solana. Therefore, it is only safe. Rollup technology close to ETH Layer1 can only carry the big task.

Therefore, the article finally talks about the relationship between Rollup and cross-chain.

For Rollup's Token project, LRC is undoubtedly the leader. For projects that have not issued tokens, Optimism, Offchain Lab and Matter Labs are undoubtedly the three most worthy of attention.

Zk-rollup undoubtedly has the best security, but ZK has three big problems.

1. A dedicated circuit is required and cannot support any user-defined smart contract;

2. To be a relay node, one is to preserve the deteriorating or expanding state of Ethereum;

3. Performing zero-knowledge proof calculations on the chain actually requires high hardware requirements. At this stage, it is impossible to achieve "decentralization in your eyes".

Therefore, in the short term, at least half a year to a year, Optimisic Rollup is very likely to be a technical solution to achieve L2 unification. In the current era when the combination of Defi and Lego is becoming stronger and stronger, Zk will not be able to make a universal solution. One day, it is possible to turn over the OP.

The world of Layer 2 is essentially the same as Layer 1. There will be multiple solutions and multiple projects, which are incompatible with each other, forming a situation of separatism.

And it is unlikely that all the stars will hold the moon like the current majors tell the public chain to be an Ethereum assistant, so they will fight each other until the final 1-2 winner is left.

04 Summary

I believe that by then, Layer 2 will have 1-2 Big Macs born, forming an Ethereum parallel world under the chain, fundamentally solving the problem of Interoperability of Defi, and the value of these 1-2 Big Macs is very likely. Close to ETH Layer 1.

In fact, what is curious is that on that day, whether it will be an orthodox cross-chain, compatible with EVM high-speed public chain, ETH Layer1+Layer2 will continue the struggle for hegemony in the three countries, and the multi-chain will prosper, or whether it is because of the combinable aggregation effect that Ethereum will dominate the world. What do you think of the problem?