Web-3 is an interesting position right now. On the one hand, the market is not exactly in its 2021 prime as bears still hold the throne. On the other hand, if you listen closely enough, you’ll hear whispers of a bull run in the making: The Bitcoin halving is coming up, and there’s all the commotion around the possible BlackRock Bitcoin ETF. So as builders build and hodlers hodl, the hope for a new season of plenty is very much alive.
Now, about that builder part. I have been talking with many builders lately, and I have noticed a trend — and a story worth telling. There are lessons to learn there, both for aspiring Web3 teams and for layer-1s, and implications for what this next bull run might look like. But first, just a little history.
Bitcoin was the first to introduce the world to the concept of cryptocurrencies, but it was Ethereum that picked up the Olympic flame and ran with it a whole new distance. By design, this network was more versatile, enabling savvy builders to create all sorts of decentralized applications on top of it. What made it possible was the Ethereum Virtual Machine (EVM), Ethereum’s runtime environment for smart contracts — computer code executed in a decentralized fashion.
EVM is so massively popular that it’s the de-facto industry standard for Web3. Most of the highest market cap layer-1s, such as the BNB Chain, Avalanche, and Cardano, leverage the EVM, and Ethereum has
There’s a few reasons for that. First of all, Ethereum on its own has the second-largest market cap across the entire Web3 space. Add the combined liquidity from all of the EVM-based chains, and you get a massive allure of a capital trove to potentially access.\
And that “if” is actually not as hypothetical as it might seem. More and more teams that started off on an EVM layer-1 find themselves moving to other networks — for a variety of reasons. For Ethereum, it is often the relatively low throughput and high transaction fees compared to other chains, and for other general-purpose layer-1s, it’s the lack of mission-specific functions and economic mechanisms that would have helped this particular project.
Open the gates!
It is too early to speak of an actual exodus from the EVM — if anything, this runtime is set to stay the industry staple given the simple laws of financial gravity. Money loves money, and in the next bull run, Ethereum’s huge market cap will inevitably draw in investors, and, by extension developers. This will likely amplify the project migration as it remains to be seen how the updated network will tackle the uptick of activity.
When looking at the options on the table, these teams will be after many things, such as the aforementioned mission-specific tools and incentivization mechanisms. One thing they won’t want to do, though, is to completely rebuild their entire architecture around a new tech stack. And that is something they will most likely have to do if migrating to a non-EVN blockchain.
As the crypto world is bracing for another potential bull run, it’s crucial for any layer-1s that aren’t compatible with EVM to do a fast 180 on that. Full compatibility with EVM makes your project accessible to an exponentially higher number of builders and reduces the technological entry barrier to almost zero for anyone who’s done at least some coding. At a time when so many teams are looking for the perfect home — and many more will once the bulls go runnin’ — such versatility opens a clear-cut pathway to network growth.
This is why peaq is
Does all of this mean that there is no life beyond EVM? No, just the opposite — there are bustling communities growing around blockchains that are based on other frameworks. These networks have a lot to offer to projects looking for a new home, and, moving forward, they would stand to benefit a lot from making themselves as accessible to EVM-native teams as possible.
About the author
Leonard Dorlöchter is the co-founder of peaq, the go-to blockchain for real-world applications, and EoT Labs, a software development and incubation organization supporting open-source projects focused on the Economy of Things.