When it comes to cross-chain investment, Cosmos and Polkadot are inseparable topics. Together, they are called “cross-chain doubles” and are highly sought after by investors. The latest market value of Cosmos, which is already on the exchange, reached $1 billion. Although Polkadot has not yet been listed on the exchange, according to the latest round of token sales by the project side, the valuation is close to 1.2 billion US dollars, which is 300% higher than the valuation of the first token sales in 2017.
The rapid improvement of valuation, on the one hand, the market's recognition of cross-chain, on the other hand, we have to think about the following questions: Will the heat of the project overdraw the future development space? Which project will occupy a larger market share in the final competition? What investment opportunities will be derived based on cross-chain? Will the maturity of cross-chain technology allow the decentralized exchange to usher in the second spring? Will cross-chain become the tipping point for the next bull market?
In response to the above questions, on June 30th by ChainNode (Chain Node) and Chainge, the theme is "cross-chain: technology and new opportunities" at the Chainge Technology Salon, GDEX founder, BitShares Director, Cancer, SNZ holding CTO NEO, Random Liu Yi, a partner of Capital, Cai Yan, head of NGC StakeX, and Ni Kuang, a partner of DFG Crypto, shared their views.
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The main points are as follows: 1) Cross-chaining becomes an achievable business, and it takes a long time. 2) Although the price may be slightly expensive, it is worth holding for a long time. 3) The market value of Polkadot will far exceed the market value of Cosmos in the future. 4) Compared with a single big one, the competition between Cosmos and Polkadot is a good thing, and capital will promote each other's development. 5) At present, many decentralized exchanges can only do asset transactions in this chain, and cannot cross-chain. 6) Restricting the performance and security bottlenecks developed by decentralized exchanges can be solved by cross-chain technology. 7) The future blockchain world will be a pattern of a few public chains + multiple application chains, which are connected by cross-chain agreements.
(From left: host Ni Kuang, dialogue guest Cancer, NEO, Cai Yan, Liu Yi)
The following is an excerpt from the dialogue, Babbitt finishing:
We know that the cross-chain cosmos Cosmos and Polkadot have been very hot recently, ATOM has performed well after the exchange, and Polkadot recently completed a new round of financing. Combined with the application scenario, what are the different focuses of cosmos and polkadot? Now the heat of these two projects is already very high. Is it overheated? Which of the two projects in the future will be the one with higher ceiling and higher market value?
I started to pay attention to these projects very early, but I don't have a definitive answer.
In the past two years, the concept of cross-chain has become hotter and hotter, and everyone really feels the need for cross-chain and its technical possibilities. But no matter what, I think that cross-chaining will eventually become a achievable business, and it may take a long time. Cross-chain projects will continue to demonstrate their value in the process of communicating with the community.
With the landing of Polkadot and Cosmos, new capital and opportunities will be brought. At present, these two projects should be a hot spot. Although the price may be a bit expensive, I think it is worth holding for a long time.
From the perspective of the fund, we are very optimistic about both projects. We made the Cosmos node and recently participated in the private placement of Polkadot. We believe that if you consider these two projects as the benchmark, Polkadot's price of 90 to 100 dollars in this round is still very cost-effective.
Cosmos and Polkadot are third-generation public-chain architectures that allow you to easily customize your own PoS chain at a very low cost. This chain can achieve 1000 TPS, which solves the performance bottleneck of the second-generation public chain, and it It is an independent chain. Each chain can be treated as a separate decentralization, which removes the two bottlenecks of the original decentralized application development, so it can bring about the prosperity of decentralized applications.
From the market value, Cosmos and Polkadot are not overheated. I think the market value of Polkadot will far exceed the market value of Cosmos.
The reason is that the network topology of the two is different. There is a root relay in Polkadot, which can access dozens of parallel chains. We know that the security of the PoS chain is determined by the total market value of the PoS Pass and its pledge ratio. The DOT (Polkadot token) is pledged on the Relay to ensure the security of all connected parallel chains. Like a tree, the more the crown is lush, the stronger the roots are.
The ecology of Cosmos is supported by the SDK. It is a multi-Hub structure, and there are peer-to-peer connections between multiple Hubs. There is no question of who is guaranteed. Just like the highway network, every Hub is a central node, so the market value of its pass will be decentralized.
As an investor, I have recently seen a series of derivative projects based on cosmos and polkadot. What are their roles and where are the investment opportunities for such derivative projects in the future?
There are three investment opportunities across the chain. The first is infrastructure, such as the underlying infrastructure of cosmos, polkadot and IRISnet. The second is the middleware layer, such as the recently hot ChainLink, but a bit overdraft. The third is the application layer, such as decentralized transactions, which can open up all the assets on the chain into a pool of liquidity, on the basis of which DEX applications can be developed.
The focus now is on the infrastructure, and it is possible that the middleware agreement will become a focus after a couple of years of cross-chaining. In the long run, we certainly hope that there are a large number of applications to solve practical problems, which will lead to a big ecosystem of cross-chain, and also create many investment opportunities.
I believe that the logic of cross-chain investment and the investment logic of the public chain are very similar. It is also divided into the basic layer, the middle layer and the underlying application. The cross-chain is more reflected in the characteristics of asset trading. We also invested in some DeFi projects based on the Cosmos SDK.
Everyone thinks that Cosmos and Polkadot may be competing with each other in the two camps, but I think it is a good thing to have two systems to compete against one big one. In this way, the two sides will compare each other and the capital will promote each other's development. Cosmos and Polkadot, as Ethereum's expansion plans, allow excellent developers to develop a room or parallel chain to enrich the ecology based on the same underlying and consensus protocols.
From an ecological point of view, Cosmos and Polkadot are born with multiple assets, derived from token mortgages, stable coins, and so on. In addition, Staking on the PoS project actually removes the liquidity, so it will be derived from some projects that specialize in Staking's token liquidity. In addition, ID systems, decentralized storage is also a cross-chain attention.
Cross-chain is still in the stage of infrastructure construction. After the infrastructure is ready in the future, after the assets between different chains can flow freely, many meaningful applications can be derived.
As NEO mentioned earlier, PoS mortgages can generate stable coins. Now whether it is DAI or BitCNY on BTS, it is only generated by the currency of the mortgage. Therefore, there is often a problem that the coin market value of the chain is not large enough to support the application of stable coins.
If the cross-chain is really mature in the future, Bitcoin can be transferred to the chain for mortgage, and the bitcoin can be directly mortgaged to produce such a stable currency. The supply of stable coins will be directly increased by a large order of magnitude. Only these will create a lot of imagination for the future development of the ecology.
In a phased manner, with the maturity of cross-chain technology, is there a chance for the decentralized exchange to usher in the second spring?
It will surely usher in the second spring. Although the concept of decentralized exchanges has been going on for a long time, many decentralized exchanges can only do asset trading in this chain, and there is no way to cross-chain. I also do decentralized exchanges. Frankly speaking, the decentralized exchange GDEX I made is only partially decentralized. The accounts are controlled by the users themselves. The matching engine is based on the consensus on the blockchain. But a key point is that the user assets must be GDEX, which means that GDEX plays the role of gateway endorsement, and there is a single risk as the centralized exchange.
Cross-chain technology matures to a certain stage, the assets of the outer chain can be easily transferred to the chain, and transactions are carried out in the trading environment of the chain, so that there is no need for a centralized organization to endorse an asset. The single point risk of the exchange will be reduced to a minimum.
Now that the threshold for decentralized transactions is too high, Xiaobai users may not know how to operate, and the cost of learning is high. Although the centralized exchange is prone to security problems, the user's password is lost and retrieved. There is no better solution to the centralized exchange.
From a technical point of view, cross-chain technology may help the development of the entire decentralized exchange.
However, the essence of the exchange is still trading. From the perspective of the exchange business level, in the second half of 2018, the decentralized trading business was doing very well for a period of time, mainly because of the good development of DAPP at that time. At that time, the fees for some decentralized exchanges were also very high. When DAPP is not so hot, these exchanges are slowly making no noise.
The limitation of the decentralized exchange is that it can only be done in the chain. Even when ETH accounts for the largest amount of all cryptocurrency assets, the transaction volume between ETH and ERC20 accounts for only 2% of the total market. And every transaction is a chain transaction, but also pay GAS fees.
Now with cross-chain technology, we can use the Cosmos SDK or Polkadot's Substrate to develop a decentralized exchange chain. For example, the coin chain can achieve 1 second block, can reach several thousand TPS, transaction experience and centralized trading. There are not too many, but users can control their assets throughout the process.
After the cross-chain hub in the future, we can map the high-liquidity assets such as BTC and USDT to the chain in a decentralized way, which means that some of the relatively large bottlenecks restricting the development of DEX are through cross-chain technologies. Can be solved, I believe that the decentralized exchange will usher in the second spring.
In the long run, the cross-chain ceiling has a lot to do with the final market pattern. If the market's final smart contract platform is an oligopoly, then the value of the cross-chain may not be as high. If the diversity of the smart contract platform is high, the value of the cross-chain will be higher. How do the guests judge the value of the future of cross-chain, will the cross-chain be the hope of the whole village and become the tipping point of the next round of bull market?
I think smart contracts confuse verifiable applications with decentralization, and smart contracts and decentralized applications shouldn't be equated. A smart contract is a verifiable application development technology. A decentralized application is a group of participants who jointly decide the future of this thing. A true decentralized application should be a chain, because only this chain can change it by voting, or even fork it when it comes to different opinions.
When Bitcoin first appeared, we developed something else that was a bit of a bit of bitcoin code, but Bitcoin is a very low-expansion architecture, and all that is done is cryptocurrency. Later, after Ethereum came out, there was a Turing-complete virtual machine on it, and everyone was introduced to the field of verifiable applications.
But Cosmos and Polkadot are different. The SDK provided by Cosmos can develop a chain. This chain is PoS. It has its own verification nodes and voters. It has its own governance mechanism. The rules and future of this chain are all from these. What the participants decided together, I think this is the real decentralized application.
So I think that the real decentralized application will not be concentrated on a few smart contract platforms, it must be a multi-chain application. And these chains have to gain huge network effects, and they must be interoperable through the Cosmos Hub or the Polkadot Relay.
I entered this market at the end of the bull market in 2017. At that time, I believed in the concept of decentralization, which means that the chain is full of flowers, and each chain may have different characteristics.
But after BNB has risen so many times in the past three months, my idea has been broken. We can see that many of the coins have been squeezed out of the DEX for the money. I personally feel that there is a tendency to oligopoly, but how to develop in the future is still unclear.
Although cross-chain technology is a good direction, it has been mentioned since 16 years, but there is nothing new in the entire blockchain. If old things are always played in the market, they are easily monopolized by some big platforms.
I prefer to characterize Cosmos and Polkadot as a kind of expansion and supplement of Ethereum. Let's build the existing blockchain ecosystem. As for the future, more than 80% of the small public chains may be slowly eliminated and concentrated in several main chains.
The future scene may be a few of the public chain + multiple application chains, and everyone is connected through a cross-chain protocol to become a whole world.
There are some chains, such as BTC, which are not smart contracts, and everyone treats it as a chain of asset-like assets like gold. It may have the greatest security and the greatest consensus, then it will still exist in this world for a long time.
There are also some public chains, which have their own specific biases. For example, BTS is financial, and in order to do finance, it does not support smart contracts. After the rise of smart contracts, the community still decided not to support smart contracts. Positioning like this will also have a certain chance of survival in this world.