For the previous three years, crypto builders have been preventing a shared enemy, a three-headed beast generally known as the blockchain trilemma. For each acquire made on one entrance – safety or decentralization – territory was ceded on one other, resembling scalability.
Finally we realized what in hindsight ought to have been apparent: No single community can defeat the trilemma. However when their forces mix and every community performs to its strengths, the widespread foe may be vanquished. From sidechains to sharding, we’ve got applied options to ship crypto expertise that may function at scale, toppling the trilemma and marking an finish to the layer 1 battle.
This publish is a part of CoinDesk’s 2020 Year in Review – a group of op-eds, essays and interviews concerning the 12 months in crypto and past. Justin Solar is the founding father of TRON and the CEO of BitTorrent.
The marketing campaign, which has taken the higher a part of three years, has concluded with allied forces claiming their share of the spoils.
On the adoption and utility entrance, Ethereum has gained floor, because of its robust community results and burgeoning DeFi primitives. TRON, in the meantime, has supported quick and low-cost transactions for settling billions of {dollars} in stablecoins, supporting hundreds of dApps, and lengthening the attain of the world’s largest file-sharing community. After which there’s Tezos, which continues to be respiratory at the least.
Ethereum and TRON dominate most blockchain benchmarks, leaving the opposite sensible contract networks to play catch up.
For TRON, 2020 has been a prolific 12 months that noticed over 100,000 every day energetic customers and $6.4 billion of USDT issued on the community plus the introduction of WBTC. Extra importantly, TRON introduced decentralization one step nearer to the lots this 12 months, establishing a model new DeFi ecosystem, increasing the features of BitTorrent’s decentralized storage, and forging cross-industry partnerships.
Ethereum doesn’t want me to cheerlead on its behalf, it’s had a prolific 12 months too. Relatively than dwelling on layer 1 achievements and milestones, although, I’m extra occupied with what comes subsequent: the hunt to win over hearts and minds past the crypto-sphere.
It’s time to give attention to a far better problem, with a better prize at stake: onboarding the subsequent 100 million crypto customers.
The battle up to now
Within the early levels of any skirmish there are key battles over turf, infrastructure and provide routes. During the last three years we’ve seen this play out with layer 1 sensible contract chains, which have competed for infrastructure, liquidity, partnership, developer group and struggle chest.
- Infrastructure: The technical basis should be safe, scalable and inexpensive to assist improvement additional up the stack.
- Liquidity: The blockchain’s native asset must be listed on main crypto exchanges and preserve a wholesome transaction quantity.
- Partnership: Strategic companions ought to be onboarded that may really assist the ecosystem thrive and prolong its person base.
- Developer Group: A various and rising variety of third-party initiatives ought to be growing on the blockchain.
- Conflict Chest: There ought to be sufficient funding to maintain the ecosystem working for years to return.
Right here’s how the main layer 1s form up when measured utilizing these benchmarks:
Ethereum is the plain entrance runner, with TRON chasing intently, whereas Polkadot and Tezos are taking part in catchup. Though the race is much from over, when the competitors amongst blockchains started in 2017 the barrier to entry was a lot decrease. It has taken established protocols resembling Ethereum and TRON over three years, immense capital, improvement and revolutionary partnerships to seize the hearts and minds of the {industry}. It’s not solely going to be tough but in addition extraordinarily costly for newer layer 1 protocols to cross the moat that has been constructed by these {industry} giants.
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For TRON, 2020 has been a prolific 12 months that noticed over $6.4 billion of USDT issued on the community, which accounts for about 30% of Tether’s whole market cap. Extra importantly, we established a brand-new DeFi ecosystem that already has over 120 million whole worth locked.
Successful the subsequent wave
The marketing campaign to onboard the subsequent wave of customers should be framed in language they perceive, with a worth proposition that resonates. Individuals shouldn’t use an app as a result of it’s decentralized – they need to achieve this regardless of it. Simply as the typical net person is aware of and cares nothing about TCP/IP, blockchain and its arcane terminology should be abstracted, whereas the onboarding course of to the cryptoconomy must be streamlined. We’re speaking gasless wallets, higher person expertise and fiat integration in order that interacting with crypto apps is seamless and intuitive.
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We additionally want extra compelling use instances for taking part, over and above censorship resistance and permissionless entry. Gaming, buying and selling and DeFi have shaped the foundations of layer 1s. What comes subsequent? Whether or not it’s digital collectibles, celeb inventory markets, citizen journalism or encrypted messaging, we’re nonetheless ready for crypto’s first killer dapp.
I’m assured we’ll discover solutions to many of those questions in 2021 as layer 1s up their recreation and switch their focus to fixing real-world issues and attracting actual world customers. No matter which blockchain accrues probably the most transactions, dapps, and quantity, the layer 1 battle is over however the struggle to safe mainstream adoption is simply getting began.
