Oasis Chinese AMA Highlights: Persistence, Escape, Compatibility? How Should We Choose After the Ethereum Merge?

Author: Oasis Chinese Channel

On August 2, 2022, at 19:30, the Oasis Network held a Twitter Space event themed "Stay / Escape / Compatibility? The Ethereum Merge, How Should We Choose?"

In many people's minds, Ethereum is the absolute king of public chains and ecosystems, but it has always struggled with performance issues. Recently, Vitalik proposed concepts such as "The Merge," "Danksharding," and "Rollup-centric roadmap" to explore optimizing Ethereum's performance, revealing that the "Merge" is 90% complete. Regarding the Ethereum Merge: Is it enough to attract developers to stay with Ethereum and endure the darkness before dawn? What measures should public chains take to attract projects/developers? Where will the next breakthrough point for new public chains competing with Ethereum be?

In this event, we were fortunate to invite Henry, Investment Director of NGC Ventures, Zhixiong Pan, Founder of ChainFeeds, and Ron, Head of the WePiggy protocol development team, to discuss related topics with the host, William, Ecosystem Product Manager for Oasis China.

This article is a review of the highlights from this AMA event, with some content edited.

Self-Introduction Segment

First, let’s welcome all the guests and ask them to introduce themselves.

Henry:

I am the Investment Director at NGC, overseeing investments. NGC is a blockchain technology venture capital fund established in 2017, with teams distributed in the United States, Singapore, and Shanghai, composed of members from the fields of technology entrepreneurship, traditional capital markets, and management consulting. Recently, we launched a $100 million fund for Web3 and the metaverse. We are also one of the early investors in Oasis. I am pleased to see Oasis's progress and very happy to participate in this event.

Zhixiong Pan:

I am Zhixiong Pan, currently working on a product called ChainFeeds, which is an information flow aggregation product. I previously worked at ChainNews, mainly responsible for research, and I have been closely following the development of public chains, infrastructure, and Layer 2. Thank you, Oasis, for the invitation; I am very happy to communicate with everyone today.

Ron:

I am Ron, the head of development for the WePiggy lending protocol. We are a multi-chain deployed lending protocol and one of the earliest lending protocols deployed on Oasis. It is a great honor to participate in this Twitter Space event organized by Oasis.

Q&A Sharing Segment

Question 1:

The first topic will revolve around "Staying": How do you view the designs proposed by Vitalik, such as "The Merge," "Danksharding," and the "Rollup-centric roadmap"? Is it enough to attract developers to stay with Ethereum and endure the darkness before dawn?

Henry:

Indeed, the Ethereum Merge has attracted a lot of attention recently. Overall, I feel that in the face of "The Merge," developers staying with Ethereum should be the mainstream behavior. From several perspectives, I will share my views.

First, currently, ETH serves as a benchmark in our circle, and I don't think abandoning the benchmark for other chains will become mainstream.

Second, from an architectural perspective, developers can seamlessly transition to using the general APIs of the architecture before and after The Merge. This means that developers basically do not need to rework their existing applications. Its APIs were designed to be compatible with existing infrastructure and developer tools, with only a small portion needing updates. The overall compatibility means that the ecosystem will not undergo a significant change.

Third, from another angle, The Merge mainly changes the consensus mechanism. For users, using it will neither reduce gas fees nor change transaction speeds. As ETH is currently the most mainstream public chain, if there are no clear changes to user experience, I believe that from a demand perspective, most users will still stay on ETH, and most developers will not need to abandon the ETH market.

Finally, analyzing the overall process, I believe that transitioning from POW to POS and then to Surge and Verge is imperative. Ethereum aims to be a decentralized computing platform, and to achieve this vision, changing the consensus mechanism through The Merge to address sustainability, security, and the risk of centralization from miners, followed by upgrades like Danksharding and Rollup to solve scalability issues, is basically unavoidable. This necessary upgrade cannot be called the dark age of ETH; it will not lead to changes in previous demand nor bring significant changes to the development experience for developers.

On top of this, I do not believe developers will all flee Ethereum due to the progress of the ETH ecosystem; this is unlikely. Overall, in the face of The Merge, developers staying with Ethereum should still be a mainstream behavior.

Zhixiong Pan:

Regarding The Merge, Henry has covered it quite comprehensively. I would like to add that the ETH development roadmap centered around Merge, Danksharding, and Rollup was not proposed recently. Vitalik proposed Rollup back in 2020. So we can see that from 2020 to 2021 and now, various Layer 2 solutions have become increasingly abundant and mature.

The Merge, which will go live in September this year, will have almost no adjustments or impacts for developers and users; developers do not need to change. I think it is unlikely for developers to flee Ethereum unless something very unfriendly to developers occurs during the official operation of The Merge compared to the testnet. Aside from some changes for developers at the protocol layer of ETH itself, there should be no changes for developers at the application layer or smart contract layer.

For other public chains, Ethereum will face significant challenges in updating and adjusting its roadmap in the future. A large number of smart contracts are already running on Ethereum, and it can only make incremental improvements, adding new features. The best approach is to add new layers on top of the existing solutions without any coupling with the original layers, allowing the new solutions to run on the new layers.

For example, the first part of Danksharding, called Proto-Danksharding, will open up a dedicated area for data storage on Ethereum's EVM layer, further improving Layer 2 efficiency and reducing costs. I believe the ETH Shanghai upgrade or more future upgrades will not impact existing smart contracts for users.

Ron:

I agree with Henry and Professor Pan's views. To add to this question, I think the reason why many believe developers might want to flee Ethereum is due to the current situation. We know that Ethereum is always expanding the boundaries of public chains because it carries the largest ecosystem and developers, so every step of change is taken very cautiously. This caution is also a reflection of responsibility towards the ecosystem and developers.

In fact, it is precisely Ethereum's deep foundation, a large number of quality assets, and many existing infrastructures that allow developers to go further and climb higher without starting from scratch. Therefore, from a developer's perspective, there is no motivation to proactively leave the Ethereum ecosystem. Of course, it does not rule out that future incremental developers may have more choices. I also look forward to new public chains like Oasis attracting more developers from the Web2 world into Web3.

Question 2:

The second topic will discuss "Escape": On June 23, dYdX announced its "escape" from Ethereum to the Cosmos ecosystem, which may be the first well-known Ethereum-native DeFi application to do so. This has sparked heated discussions in the community. How do you view this event? Will more applications escape from Ethereum in the future?

Henry:

The escape of dYdX has indeed had a significant impact. I can understand why many people feel disappointed with ETH. I remember that in the early days, ETH even talked about having 1024 shards, which later changed to 64, and now it has proposed single-char-danksharding, transforming Ethereum into a settlement and data availability layer to further explore Layer 2 possibilities and scalability.

I personally believe this is not a large-scale phenomenon because the capital volume on ETH is quite substantial. Currently, the ETH ecosystem is still very good for the development of many applications, and most applications should still continue to remain on ETH.

I remember when I saw the news, I could understand from the attitude of the dYdX founder's tweet when they announced their escape from ETH that he felt disappointed with the technical implementation of ETH. He believed that attention should not only be on on-chain users but also on what kind of product experience the chain can provide.

Zhixiong Pan:

dYdX indeed announced its escape from Ethereum, but there is also a well-known DeFi protocol, Compound, which mentioned a year or two ago that it would leave Ethereum to create its own chain, yet we have not seen any substantial actions from Compound to escape Ethereum. For some high-frequency, low-value applications, they can only choose chains outside of Ethereum.

So different applications, such as games, will make different adjustments based on their performance and characteristics to meet their needs. If Ethereum meets their needs, they will choose Ethereum; but if they require features like privacy that Ethereum does not provide, they can only choose Oasis or other chains with privacy features.

Therefore, applications that choose based on functionality and performance indeed have a very high possibility of leaving Ethereum or starting from other chains instead of Ethereum.

Ron:

Regarding whether applications should leave Ethereum, I personally think there are two deciding factors: one is the type of application, whether it is a high-frequency or low-frequency application. It has a strong demand for composability; if it is a high-frequency application, it may not be able to bear the high gas fees of Ethereum.

The other factor is the development stage of the application; whether it has accumulated a sufficiently strong advantage and asset scale. When its user scale and asset advantages are very strong, it may have the motivation to leave Ethereum, not necessarily to leave Ethereum entirely but possibly to leave Ethereum's Layer 2 and create its own Layer 2.

Question 3:

Building on the previous question: As a high-performance Layer 1 public chain that balances privacy protection and scalability, if applications "escape" Ethereum, do you think Oasis is a good destination? Besides technical performance advantages, what other measures should Oasis take to attract projects/developers?

Henry:

Looking at Oasis's ecosystem development, it is indeed a good choice in the field of privacy public chains, often collaborating with large tech companies. Last week, Oasis also announced a partnership with Meta in the field of privacy computing, which proves that our initial investment judgment in Oasis was correct. Oasis is very advanced in privacy technology. As for what measures to take to attract project developers, hosting hackathons and providing ecosystem support can be effective, and it may also consider deeply incubating some leading applications to attract users.

From the perspective of internet companies in the Web2 era monopolizing data, we all understand that users' privacy data has immense economic value. However, while Web3 has broken the monopoly, it has indeed brought some problems. Information asymmetry can lead to attacks, such as MEV attacks. There are also individuals or institutions with privacy needs, but currently, once you are on-chain, you cannot meet those privacy needs.

Zhixiong Pan:

I believe there is a clear demand for privacy. Whether from the advancements in zero-knowledge proofs or NPC and various technical directions, everyone is moving towards privacy. If developers have privacy features and needs for their applications, they can indeed choose Oasis.

In terms of specific use cases for privacy, communicating with different developers, helping support them, and even providing financial support can help grow the ecosystem.

Ron:

Oasis is a very good choice because, aside from development, I personally have invested in several privacy-related projects. I firmly believe that privacy is a necessary condition for the large-scale application of blockchain in the future. Without privacy, it is like everyone is running naked.

Before achieving privacy, there are no large-scale users who dare to use it because it exposes positions, making them vulnerable to targeted attacks. Therefore, I personally think privacy is very important in this regard, and for Oasis, it is a very good entry point. I have always believed that one day privacy will have its shining moment.

On this basis, everyone should have different characteristics or directions, so it should be said that guiding or encouraging developers to utilize Oasis's features to build unique applications is essential.

Question 4:

After discussing "Escape," let's continue with "Compatibility." Many believe that the developer network effect formed by EVM compatibility is worth far more than the Ethereum blockchain itself. Therefore, many public chains choose to implement EVM compatibility. Oasis has also launched EVM-compatible ParaTime Emerald, and the EVM-compatible privacy ParaTime "Sapphire" is currently in the testnet phase.

What changes do you think EVM compatibility will bring to the Oasis ecosystem, the Ethereum ecosystem, and industry developers? What role will the EVM-compatible privacy ParaTime play in the future EVM ecosystem?

Henry:

I believe EVM compatibility brings many benefits. Currently, over 70% of leading public chain ecosystems are EVM-compatible. At the very least, it provides developers with more convenience, allowing them to attract more applications without starting from scratch.

I think Oasis, as a privacy-first high-performance public chain, can bring a differentiated competitive advantage to this ecosystem, and the design architecture of Oasis's ParaTime Emerald is also very interesting.

Currently, looking at the EVM ecosystem, most developers still lack privacy-centric applications. With ParaTime Emerald joining, it provides a great implementation path for developers focused on privacy.

Zhixiong Pan:

I think everyone should embrace it, and there may be specific user groups they can find. Although I believe EVM will be a relatively small but important industry standard in the coming years, as developers use the same set of tools, their development efficiency will be relatively high. Years from now, I think the industry may not only have EVM as an option; there may be better EVM-type products emerging.

Ron:

Oasis's new ParaTime has incorporated some privacy features and is still in the early testing phase. The foundation or the Oasis development team can provide more guidance to help developers adapt to these new features. Of course, because it is based on the EVM architecture, the biggest benefit is that it can maximize the reduction of the learning curve for existing developers.

Question 5:

Whether it is "Staying," "Escaping," or "Compatibility," we are all exploring better solutions for application landing in the competition among public chains. Therefore, I would like to ask everyone to share:

If Ethereum completes the Merge, what impact will it have on the current intense competition among new public chains? Where will the next breakthrough point be for new public chains competing with Ethereum?

Henry:

Before Ethereum completes the Merge, it mainly faces three issues: insufficient sustainability, inadequate scalability, and high gas fees. However, once it completes the Merge, it will enhance its overall performance, coupled with its existing flourishing ecosystem, which may become even more prosperous in the future. I believe this will pose a stronger impact on many high-performance public chains. If other public chains do not form their unique competitive advantages, they may be in a precarious position in the upcoming competitive landscape.

Relatively speaking, public chains like Oasis, which have a strong competitive advantage in privacy computing, may have more opportunities in the future, such as complementing other public chains through EVM compatibility.

I think under the public chain landscape dominated by Ethereum, other public chains developing their ecosystems with relative competitive advantages may be a better form of competition.

Zhixiong Pan:

The completion of the Ethereum Merge, along with the rise of Layer 2, will have a significant impact on the current public chain landscape. For non-EVM chains, it may be fine, but for EVM-compatible chains or those that have merely changed Ethereum's consensus, I believe there will be a substantial impact, and the competition among these chains will noticeably decrease.

I believe that defeating Ethereum will not come from Ethereum itself. What the entire Ethereum ecosystem is most concerned about is a paradigm shift—whether a new generation of structural protocols will replace Ethereum. I think this is the most likely scenario.

In fact, I believe that a modular blockchain approach may be the next most competitive challenger to Ethereum. What we can currently see, particularly improvements in cryptography led by ZK, may bring significant changes to the entire ecosystem. Modular blockchains represent designs that are not entirely integrated. I think modular blockchains and some new types of chains are very likely to bring competitive pressure and will be important competitors in the next wave of public chains.

Ron:

First, we mentioned that after Ethereum completes the Merge, the initial focus will be on changing the consensus mechanism. Of course, this involves a series of token economic model games, and this process will continue for a while before data sharding and Rollup are implemented.

If there are unique characteristics and directions based on Ethereum, then there may be different possibilities. However, I believe that what can completely defeat Ethereum, as Professor Pan mentioned, is not a better Ethereum but a paradigm-shifting public chain infrastructure.

Currently, there is a heated discussion about modular blockchains. I personally believe that modular blockchains can also be done well by Ethereum, but there are some aspects that Ethereum's architecture makes it difficult to achieve.

Public chains can have their characteristics and advantages, especially in applications, discovering entirely new possibilities. In the future, it will not only be about underlying architectural advantages or simple hardware comparisons but also about the application ecosystem and the overall system for building ecosystems playing a role. From this perspective, I believe new public chains still have great opportunities.

Thank you to the guests for their answers, leading us to further understand the development landscape and future trends of the Ethereum Merge. Thus, this Space session comes to a close. Thank you to the guests for their wonderful speeches, to everyone present for their active participation, and to the media partners for their strong support.

Looking forward to the next event; let’s meet again!