One “multichain” to bridge them all?

Written by Sean Au

With the current state of the world economy experiencing record high inflation, massive tech sector layoffs and, not to mention a war reaching its anniversary, the blockchain industry has not been immune. But when times are tough, there is one thing that the crypto community does and that is to keep its head down and continue to build. The reason for building is that when the tide begins to turn, and it will, all the different flavours of blockchains out there will spring into life and attempt to attract users to their community. But which chain is the best? Which is the most stable? Which is the most popular? 

One way of determining the popularity of a chain is to measure the number of monthly active developers. Why developers? Because technical developers help to create tools and applications which, in turn, attracts more developers and more users. According to Electric Capital’s Developer Report, Ethereum still dominates as the most popular blockchain with nearly 6000 Month Active Developers or MAD, almost triple its closest rival. Solana and Polkadot are neck and neck with 2000 MAD, and Cosmos and Polygon round up the top six with four digit MAD. Another perspective is to take a look at the number of projects built on these blockchains. Ethereum again dominates, with around 3825 dApps projects, but the various other blockchains are growing in popularity due to the various advantages they offer compared to the Ethereum blockchain. Solana has around 887 projects in its ecosystem and is a public base layer blockchain that is optimised for scalability. Polkadot has a total of 187 projects with a concept called parachains, which are like mini blockchains. Polkadot has two networks - Kusama and Polkadot itself. Polkadot calls Kusama its canary network. It is a real network and not a testnet because the Kusama token, KSM, has an actual monetary value. Cosmos has an interesting concept called “zones” (of which there are currently 54) where mini chains are created and projects hang off these zones. The number of projects within these zones range from tens to hundreds. Polygon touts 1729 dApp projects in its ecosystem and BNB Smart Chain claims over 900 dApps. 

Source: Electric Capital Developers Report

While this article is by no means an in-depth look at the pros and cons of each chain, it is interesting to see the approach of the various Ethereum alternatives. For instance, Polkadot promotes its concept of parachains as mentioned earlier. These parachains are blockchains in their own right but have the ability to reuse certain features, such as the security and consensus layer, so that not only does it not have to be created from scratch, but it is more secure. This relates to the common adage in blockchain which is “don’t roll your own crypto” - meaning use tried and tested libraries and codes instead of trying to design your own cryptographic algorithm. 

The question remains. Will there be one dominant chain? It doesn’t look like it. It does however look like there will be a handful of dominant chains. This then begs the question of how to decide what blockchain to launch a project on. One outrageous concept is a multichain approach. Note, that is not for the faint hearted. Understanding one blockchain is challenging enough at the best of times, but it is always good to understand all the options on the table. However, because of the still nascent and developing industry, why not jump straight into this farfetched idea? A few decades ago, companies developing a web first strategy sounded outlandish. Nowadays, not only is a web strategy the default, more and more organisations are adopting a mobile only strategy - such as the new low cost Bonza airline that recently launched in Australia which only takes bookings via a mobile app. 

A multichain blockchain project means deploying an application across multiple networks and having them communicate with each other. The advantage for the users is that there is no need to move their assets from one network to another. It can all be done under the covers. This supports the vision of a multi-token economy as well. If a multichain project is not for you, but communicating across different blockchains is required, then enter blockchain bridges. Also known as cross-chain bridges, this technology connects two blockchains together and allows users to send crypto assets from one chain to another. For instance, if you have a “Sean” token and you want to spend bitcoin, you can do that through a bridge. Or if you have a tokenised asset on one blockchain and you want another asset on another blockchain, you can do that also. There are many popular blockchain bridges that allow you to currently swap various crypto assets such as Binance Bridge, Avalanche Bridge and Polygon Bridge. Basically, any popular blockchain will generally have a bridge allowing interactions with another blockchain. Not to get too technical, but bridges generally follow a “Burn and Release” or a “Lock and Mint” concept where tokens on one blockchain are locked and tokens on the other blockchain are minted. 

So, while the general population is still getting to grips with cryptocurrencies and the price of bitcoin, developers, researchers and computer scientists are already looking at what a multichain, interoperable blockchain world will look like. No doubt it will get more complicated, but crypto was never easy in the first place. Because if it was easy, everyone would be doing it.