Decoding the competition between Ethereum Rollups, Solana, and Cosmos application chains

Unraveling the Battle Among Ethereum Rollups, Solana, and Cosmos Application Chains

Author: @Shaughnessy119

Translator: Huohuo / Baihua Blockchain

1. Exploring the competing views and contradictions between Ethereum Rollups, Cosmos application chains, and Solana

If the application-specific Rollup is too expensive and does not provide the necessary technical customization, most developers will choose to publish on a shared Rollup. This got me thinking about the views between Ethereum Rollups and Cosmos application chains, as well as Solana.

My mental model of the competitive ecosystem is simple – the easiest and largest deployment platform will have the most viral applications. Why? Because this community has the highest acceptance of experimentation, thus providing the highest opportunity to spread applications. I have held this view since 2019.

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Deploying your own chain or Rollup will greatly reduce the speed of experimentation because you need to deal with infrastructure and applications.

That being said, for some developers, custom modifications are necessary for running high-performance applications. These applications cannot run on a shared L1. For example:

1) dYdX: Requires each validator to run an in-memory order book for high throughput and complete decentralization.

2) Thorchain: Does not rely on any L1 and can conduct trustless cross-chain swaps.

3) ChainFlip: Requires a separate network for custody of assets using TSS schemes and other functionalities.

So, how do we reconcile the competing views of the largest ecosystem (Ethereum) attracting the most developers/applications and the inability to build critical use cases within it?

I do not solve this problem.

Most developers/applications will publish on Ethereum/Solana, while specific cases requiring custom modifications will be published on application chains. Currently, my view is:

1) Ethereum: The most developers/applications for experimentation, without a doubt.

2) Solana: The best choice for the fastest shared global state.

3) Cosmos: Launching application-specific chains that require custom modifications not supported on shared L1 or Rollup.

2. Some existing issues

Problem 1

Complicating the issue further is the emergence of zkEVM and ZkVM on Ethereum.

Zero-knowledge proofs are the ultimate scalability/privacy technology.

If they work, it will reduce the need for launching custom chains (speed, cost, and privacy issues solved).

Problem 2

Zero-knowledge proofs and optimistic technologies are still in their early stages and are not fully decentralized.

Both rely on centralized serializers to order transactions.

Projects like dYdX now need to be completely decentralized. We cannot allow a government to shut down a node, thereby halting illicit activities (with a historical trading volume of $1 trillion!).

Challenge 3

Can Ethereum scale to support Rollups?

Currently, Ethereum can write 83MB of data and 1.3MB on DankSharding.

If Ethereum gets congested, Rollup data can be published on CelestiaDA and EigenDA.

Limited throughput may lead to high fees, but it seems unlikely here as there is an oversupply of Data Availability Layer (DA).

Challenge 4

Can the argument for a cosmic application chain only be realized on Ethereum?

Through Celestia, teams can launch their own Rollup and use a cost-effective Data Availability Layer while customizing their execution environment.

Ethereum acts as an anchor, enabling users to dispute proofs when problems arise.

Challenge 5

Ethereum doesn’t support unique/complex forms of experimentation.

Developers dislike the limitations and inefficiency of the Ethereum Virtual Machine (EVM). This also applies to zkEVM.

Arbitrum Stylus and RiscZero allow coding in more programming languages, which is an opposing viewpoint.

Challenge 6

Time is of the essence.

If the launch of ZK L3 (or ETH’s Data Availability Layer) takes too long, the development of the next bull market applications will happen elsewhere (e.g., Cosmos, Solana, etc.).

Time plays a crucial role in determining where a project can actually be launched today.

3. What do you think?

If you can use ZK technology on Ethereum or achieve these things using CelestiaDA/EigenDA, will Cosmos’ argument be realized?

Currently, Cosmos’ argument seems to be realized through specific large-scale applications.

Once Celestia/Eigen and ZK technology are truly launched, we will need to reassess. It’s uncertain for now.

Some viewpoints are:

1) Ethereum will become the de facto global settlement layer, surpassing Bitcoin in the process and attracting most competitors’ funds (excluding Solana, Cosmos, or any formidable competitors).

This isn’t a radical viewpoint as it’s already happening.

2) For Ethereum, zero-knowledge proofs and optimistic rollups (with the new Data Availability Layer) reduce the need to launch application chains over a longer timeframe (currently not mature enough). Projects can customize releases on ZK Rollups with high throughput and low fees, which can address most needs.

3) The narrative war will shift upstream. The focus will be on where applications are deployed and which community is the best: ZkEVMs vs ZkVMs vs optimistic rollups. Eventually, the technology will mature, making it a competition of business development.

Over time, there may be 1-2 ZkEVMs and 1-2 ZkVMs that emerge as winners.

4) Few new applications are being built on Ethereum L1, primarily through Rollup.

5) Solana will continue to be the fastest scalable shared global state machine. Despite the adversities with SBF, the community is becoming stronger and upgrades are underway (Firedancer, Jito, and ZK!).

6) Cosmos will definitely provide services for specific application chains, and in the years leading up to the full establishment of Zk technology, these applications will likely create large communities that can seamlessly communicate. dYdX’s trading volume has reached $1 trillion, while Thorchains’ trustless cross-chain exchange has created its own world.

7) From what I understand, IBC on Cosmos is severely underrated. As for trustless ZK L3 bridging, progress in this area is still far from mature.

Ironically, Cosmos has already solved the bridging problem while ZK L3 is addressing throughput and latency issues. They both rely on each other’s success to achieve greater breakthroughs.

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