Interpreting the Risks and Opportunities Behind the Multi-Chain Ecosystem

Author: Prague Lab

Public chains, as the infrastructure of the crypto digital world, have always been an undeniable presence. After Ethereum ignited the DeFi Summer in 2020, it naturally became the leader in the public chain arena. However, the rapid growth of Ethereum's TVL and new users has also led to soaring Gas fees for contract interactions, deterring new users with smaller amounts of capital.

At the same time, Ethereum's limited "transactions per second" and "block time" also restrict interaction efficiency, leading to criticism from insiders who label it as a "noble chain." Clearly, a single public chain cannot meet the diverse and complex new demands of the crypto ecosystem; the trend for future industry development is multi-chain coexistence and collaborative growth.

Crisis: The Cross-Chain Woes, Hackers' ATM

As is well known, for ordinary users, utilizing cross-chain bridges allows assets to interact freely, improving transaction speed while reducing Gas fees, resulting in a better experience. From a macro perspective, the emergence of cross-chain bridges has increased the productivity and utility of existing crypto assets and reconnected the fragmented on-chain ecosystems into a whole, promoting the formation of a prosperous multi-chain landscape.

In summary, cross-chain bridges not only address the urgent need for users to transfer assets but also alleviate the performance issues of underlying public chains.

With the continuous development of various applications, the status of cross-chain bridges as blockchain infrastructure will become increasingly prominent. According to incomplete statistics, there are over 100 cross-chain bridge projects in the market, which have already taken shape.

However, as the scale of cross-chain bridges continues to expand, "assets being frequently stolen" has become a painful reality. In no time, it has become a "crisis" in the multi-chain ecosystem.

• On August 2, another tragedy was added to the history of cross-chain bridges, with the Nomad cross-chain bridge being hacked for over $900 million, evolving into the largest and most chaotic "decentralized" robbery in DeFi history.
• On August 3, a large-scale asset theft occurred right before people's eyes, with nearly 8,000 Solana wallets being emptied by hackers within a few hours.

It's no wonder that some jokingly refer to cross-chain bridges as hackers' ATMs.

Recently, the blockchain security company Slow Mist released the "2022 First Half Blockchain Security and Anti-Money Laundering Report," which showed that in the first half of 2022 (as of June 30), there were a total of 187 security incidents, with losses reaching as high as $1.976 billion.

Among these security incidents, about 77% (144 incidents) originated from vulnerabilities within the projects themselves that were exploited by attackers, resulting in losses of approximately $1.84 billion, accounting for 93% of the total losses from security incidents. Blockchain security involves all parties in the ecosystem, including users, wallets, exchanges, chains, and applications.

Especially in the realm of public chains, security is particularly crucial. In other words, the most important task for a public chain's technical team is to race against hackers, striving to eliminate security vulnerabilities before attacks occur.

Only a secure and reliable public chain can provide a safe ground for the diverse ecological scenarios.

Opportunity: A Hundred Boats Compete, Competition Among Trillion-Dollar Public Chains Intensifies

In the last bull market, we witnessed a massive explosion in the Layer 1 sector. Against the backdrop of Ethereum's ecological value continuing to spill over, major Layer 1 chains such as BSC, Solana, Avalanche, Fantom, Near, Harmony, and even Terra experienced vigorous development, with infrastructure gradually maturing and various applications flourishing, leading to a rapid increase in on-chain data and market-level value extraction.

As Vitalik Buterin stated on Twitter, "The future will be multi-chain."

Time has passed, and after months of downward pressure, many public chains have seen significant reductions in market value, yet the market's investment enthusiasm for new public chains remains undiminished. There is a saying in the industry that "bear markets focus on primary markets, while bull markets focus on secondary markets." Looking at the dynamics of the primary market, the new generation of Layer 1 chains has become a new focal point for institutions, with star projects like Aptos, Sui, and PlugChain becoming industry highlights.

Specifically regarding Aptos, after the demise of Libra, the technical legacy of Libra has already given it a significant lead over many new public chains.

To be precise, Aptos is built on the open-source codebase of Libra, using the Move programming language and MoveVM development environment, and will adopt the iterated Diem-BFT consensus. However, unlike Libra, which focused on cross-border payments, Aptos's vision is to improve the security and scalability of Layer 1, creating an infrastructure network that can serve billions of people.

Similar to Aptos, Sui also inherits the Move development language from Libra, but Sui has made certain improvements to the original version (Core Move), launching its own Sui Move version. The new version optimizes storage mechanisms, address types, and more, enhancing network performance and reducing transaction confirmation times.

Additionally, Sui will adopt entirely different consensus mechanisms for independent transactions and dependent transactions, enabling transaction parallelization to significantly enhance network performance.

PlugChain, like Aptos and Sui, is a new public chain that also boasts high scalability, high concurrency, and low Gas fees as core advantages. Among them, the decentralized oracle network serves as PlugChain's core function, employing an innovative cross-chain interaction design that opens a door for cross-chain interactions between oracles.

PlugChain achieves support for commercial-grade application network ecosystems by nesting multi-chain ecological scenarios such as BSC and Heco, and providing modular underlying components.

Overall, whether it's Aptos or Sui, both inherit part of Libra's technical legacy, which explains why they have garnered the favor of large institutions and capital despite being established for a short time, giving them a strong first-mover advantage in the new public chain arena. In contrast, PlugChain's disadvantages in this regard are becoming apparent, but its unique technological barriers and performance advantages also allow it to secure a place in the public chain race.

In summary, in the competitive landscape of trillion-dollar public chains, although competition is fierce, the sector is still in its early stages, with many issues yet to be resolved, and there are still numerous opportunities for new public chains. New public chains that excel in core competitive designs, especially in consensus mechanisms, will find their technological barriers and ecological moats to be new opportunities in the public chain arena.

Conclusion:

Today, major public chains are competing vigorously with the support of capital and the efforts of developers. The multi-chain landscape has been established and is difficult to reverse. As the infrastructure of new public chains gradually improves and the ecosystem begins to take shape, perhaps in the future, we will find that it is not necessary to rely solely on Ethereum to support all network transactions; different public chains can sufficiently meet various functional applications. At that point, developers will be able to focus solely on development itself, bringing users more efficient and user-friendly DApps, which will truly promote the continuous advancement of Web 3.0.