Have seen alot of FUD around Polkadot and surrounding topics such as projects leaving/XCM/developer experience/no users (usually tells me we are right at the start of the bull run ). Just as I knew we were at the end of the bull when I saw the absurdity of SBF. Anyway, I wanted to talk through various topics of FUD I have seen and just repudiate them.
I have seen comments regarding the following projects in other ecosystems: Manta, Parallel Finance, Astar, Phala, Crust, Bifrost, and btw you will likely see Invarch. Ok, let’s break these down.
Manta - This project provides ZK privacy. These privacy services can be utilized (bought) by other ecosystems (Binance Smart Chain for example), as well as Polkadot. Selling its core service to other ecosystems does NOT mean it is leaving Polkadot. It relies on Polkadot’s infrastructure, which it needs to provide these services to other ecosystems. Now, some point to the fact that Manta is building an L2 based on the optimism tech stack on Ethereum. My response, so what? By doing this, Manta will build the underlying infastructure to connect optimistic rollup bridges based on the optimism tech stack to Polkadot parachains. We are also meeting ethereum users where they are at and providing a gateway into Polkadot. Finally, ethereum doesn’t even really benefit from Manta building on it. This is because they are using Celestia as the data availability layer and NOT Ethereum. Ethereum is basically only getting paid for settlement, which is not that much. The real profit comes from the execution and data availability layers.
Parallel Finance - People are fuding that parallel finance is building an L2 on Ethereum. This has literally ALWAYS been on their road map since day one. They have likely been silent on Polkadot because they have built the core functionality for their parachain and are now heads down in development on their L2 solution, which by the way is based on Starkware (FYI, Starkware was an investor of Parallel Finance). Parallel Finance will build the underlying infastructure for bridging from the Starkware tech stack to Polkadot parachains. We are also meeting ethereum users where they are at and providing a gateway into Polkadot.
Astar - People are fuding that Astar is building on Polygon ZKevm. Astar will build the underlying infastructure for bridging from the Polygon ZK tech stack to Polkadot parachains. We are also meeting ethereum users where they are at and providing a gateway into Polkadot.
Phala - This project provides off chain computation. This off chain computation can be utilized (bought) by other ecosystems (Polygon for example), as well as Polkadot. Selling its core service to other ecosystems does NOT mean it is leaving Polkadot. It relies on Polkadot’s infrastructure, which it needs to provide these services to other ecosystems.
Crust - This project provides decentralized storage. This off chain storage can be utilized (bought) by other ecosystems (Ethereum/Uniswap for example), as well as Polkadot. Again, selling its core service to other ecosystems does NOT mean it is leaving Polkadot. It relies on Polkadot’s infrastructure, which it needs to provide these services to other ecosystems.
Bifrost - This project provides decentralized staking services. These staking services can be utilized by other ecosystems (Filecoin for example), as well as Polkadot. Once again, selling its core service to other ecosystems does NOT mean it is leaving Polkadot. It relies on Polkadot’s infrastructure, which it needs to provide these services to other ecosystems.
Invarch - This project provides decentralized multi-sigs. This multi-sig service will eventually (not developed yet) be utilized by other ecosystems (L2s on Ethereum for example), as well as Polkadot. And again, selling its core service to other ecosystems does NOT mean it is leaving Polkadot. It relies on Polkadot’s infrastructure, which it needs to provide these services to other ecosystems.
I see alot of folks discussing the difficulty of building on Polkadot. This is a partially loaded discussion item because the first question that has to be discussed is where in the tech stack are you building at? Not every project needs to have its own blockchain. Moonbeam provides EVM capability, Astar provides WASM capability via ink!, and Composable Finance provides CosmWasm capability. You can start off on one of these networks and then migrate if/when it makes sense like Moonsama.
Further, the Tanssi network should make deploying blockchains infinitely easier once it releases its container chain functionality, which should provide an Ethereum type template blockchain with collator, rpc, wallet integration, block explorer, indexing, and bridging services. Based on my understanding, you will be able to launch a blockchain in literally four hours or less.
Now, I am not saying everything is perfect and can’t be improved, but we are at the early stages of Web3, which means the templates and SDKs are still in process.
First, I know XCM/XCMP/HRMP/etc. have different meanings, but I am going to use them interchangeably for our less technical audience because the difference among them does not matter for this conversation and I don’t want to add unneeded jargon to get the point across.
Another item I see talked about is why is XCM so verbose. This is by design. Here me out. XCM is maximally abstracted. Why? Because no one today knows what the future standard of interoperability will look like. The standard may NOT even be developed yet. Polkadot does not want to develop something at a standard level by design and then not be able to back out of it. XCM allows us to adapt to future changes in the industry without getting locked in. History of networking devices demonstrates this. Prior to the development of TCP/IP, a business would have to buy every one of its network devices from the same vendor because there was no universal standard.
Next item I hear alot is why can’t channels be open by default. Two reasons: 1) security and 2) compliance. First, if you are open by default, you are more susceptible to DDOS attacks. Second, because Polkadot is maximally abstracted, you can have teams build permissioned and eventually privatized chains using ZK technology that relies on Polkadot’s consensus. If you decide to go the permissioned route, you are likely doing for compliance reasons, which means you need to control who can send you messages. I will leave it at that.
Where are the Users and Transactions?
First and foremost, unless you have a data analytics background like myself, do NOT believe any statistic regarding wallet downloads, transaction count, and number of users on any other ecosystem (bitcoin is about the only one you can generally believe is semi-legit).
Alot of these ecosystems are funded by market makers. Alameda was a notorious one. There is another notorious one still out there, but I will refrain from mentioning who they are (will let you do some research yourself). But they had connections to Luna Terra and also have connections to two blockchains that have over 1B transactions. These market makers use bots to download wallets over and over again and give those wallets five-star reviews, create accounts on mass, and wash trade transactions. They do this to create the appearance that the blockchains are being used in hopes of convincing the plebs they should buy in based on perceived adoption and to convince stupid VCs to provide funding. In some cases, these market makers own such a large portion of the token that they control a significant portion of the validators, so much so that they can market make by front running their own users…lol.
Even on Ethereum, alot of the Uniswap transactions are wash trades. That is how they beat Coinbase. Now to be fair, I am not saying Uniswap is doing this directly (they are NOT based on by knowledge). With that said, there are thousands of tokens on Ethereum (most fraud, memes, or no real development); however, the creators are trading back and forth between themselves using Uniswap in order to “create” alot of activity for their token. They are doing this to either defraud folks or to get enough activity to where they can check the box for an exchange listing (FYI, exchanges do not want to list tokens with no activity, so the developers make sure there is activity ).
Alright, almost done. So where are the users from Polkadot are coming from. In my opinion, two places short-term: 1) Institutions, and 2) users of software where crypto is initially obscured. First, Polkadot tech is like a 747-plane engine while most of everything else is like a horse. Institutions, at least big ones, are NOT stupid. You will not be able to fool them with fake transaction counts and marketing gimmicks. They have the people who are actually technologists (smart ones). They also have all the money. Secondly, projects like Frequency via MeWe and Mythos Labs via NFL Rivals completely obscure crypto from their users (at least initially) and use crypto to orchestrate software. Those two projects alone will likely onboard north of 20 million REAL users. Contrary to popular belief, most folks are NOT maxis, so pulling them from another ecosystem will not be hard if consensus starts to flip.