Next Stages for Moonriver & Looking Forward to Moonbeam
Polkadot’s launch didn’t kill Kusama, so why would Moonbeam’s launch kill Moonriver?
There have been some concerns from the community that the launch of Moonbeam will be end of Moonriver. I disagree. New functionality will first deploy on Moonriver to be tested in a real economic environment before deployment on Moonbeam. This means that new things like XCM (HRMP) between parachains, Liquid Staking, and performance improvements will launch on Moonriver weeks or months before Moonbeam.
Let’s have a look at some of these exciting new developments coming to Moonriver in the near future.
XCM (HRMP) between Moonriver and Kusama
In recent announcements, the Moonbeam team has hinted that XCM functionality will soon be enabled between Moonriver and Kusama, which would allow Kusama based assets, specifically KSM, to be “bridged” to the Moonriver parachain. The bridged version of KSM on Moonriver is called xcKSM, which would act like an ERC20 token and appear in Metamask or other wallets. Once launched, this would allow DEXs on Moonriver to launch liquidity mining activities for xcKSM, and unlock some exciting new functionality with liquid staked KSM.
Liquid Staked KSM (Lido)
MixBytes, the team building the Kusama/Polkadot liquid staking derivative, have been testing their liquid staked KSM on Moonbase (Testnet) since at least November 2021. xcKSM was the final piece of the puzzle before they could deploy their solution on Moonriver. With 4.9 million KSM currently staked on Kusama, worth $1.2B at current prices, there is a huge opportunity for liquid staked KSM on Moonriver.
XCM (HRMP) between Moonriver and Statemine (and other Parachains)
Karura recently proposed to open an HRMP channel between Karura and Statemine, which would allow Statemine-based assets to be “bridged” to the Karura parachain. This proposal has been approved, and looks to be enacted in the coming days.
With XCM between Moonriver and Kusama launching in the near future, the Moonbeam team have also submitted a proposal for an HRMP channel between Moonriver and Statemine. Opening this channel would allow tokens minted on Statemine, specifically RMRK, to be represented on the Moonriver parachain. Currently the only platforms to trade these assets are centralized exchanges like Kucoin, so enabling the trading of RMRK on DEX’s like Solarbeam, Sushiswap and Zenlink will be an exciting milestone and the beginning of the multi-chain vision for Kusama.
Once HRMP between Statemine is functional, it’s likely that Moonriver will open up HRMP channels between other parachains, such as Karura, Shiden and Bifrost. It will be very interesting to see the asset flow and collaboration efforts between these parachains, and how a native multi-chain ecosystem will work in the real world.
Network Throughput Improvements — Contextual Execution
Moonriver is currently operating in a reduced performance state of around 5 transactions per second. This limit was hit several times during the Zenlink trading event and some other major events on Moonriver. According to Derek of Moonbeam, this is approximately 10% of the networks possible capacity, and the reduced performance is mostly due to issues relating to block production on Kusama. A major fix, called Contextual Execution, is currently being developed by Parity and could possibly launch in Q1 2022.
Governance Interface
The Moonbeam team is currently developing a Governance interface to make it easier to propose, vote and discuss Governance proposals for Moonriver. There aren’t many details around this, but I’m assuming it could be similar to Polkassembly or other Polkadot-specific Governance interfaces. This will be very important for Moonriver, as it is a very community-focused chain with a Treasury of 50,000 MOVR awaiting distribution via onchain Governance.
Moonriver First, Moonbeam Second
All of these developments will first be deployed and tested on Moonriver before being deployed on Moonbeam. Looking at the launch process of Moonriver vs. Moonbeam, Moonriver took around 8 weeks to go from the chain producing blocks to full launch, whilst Moonbeam has taken around 3 weeks to go through the same launch process. The development of Moonriver is helping to drastically reduce the development time of Moonbeam.
Looking Forward to Moonbeam
The development on Moonriver is exciting. The most active community of developers and users, highest TVL of all parachains, and constant deployments shows the massive potential for Moonbeam, which should be a larger, higher valued network in terms of TVL, project deployments and other metrics. Moonriver is the entree, and Moonbeam is the main course.
Strong Retail Interest in Moonbeam Crowdloan
According to the Moonbeam team, over 200,000 individual contributions were made to the Moonbeam crowdloan, substantially higher than Acala (81,000), Parallel (4,000*) and Astar (27,000). According to data from Parallel, contributions made via Binance and Kraken accounted for ~46% of total crowdloaned DOT, showing strong retail interest in Moonbeam.
With crowdloan rewards being distributed over a 2 year period, Moonbeam have bootstrapped a massive, long-term incentivized community through the crowdloan. It’s hard to compare Moonbeam to other Layer 1s that have launched in the past few years, which generally launch in relative obscurity whilst a developer community slowly forms and users join. Moonbeam is launching at a jogging pace 🏃
Coming Soon to Moonbeam
As mentioned above, cross-chain messaging between Moonriver and other parachains will start rolling out over the coming weeks, and we’ll start to see the promise of a native multi-chain ecosystem come to fruition. Assuming there are no major issues, we could see this functionality launch on Moonbeam in a relatively short amount of time.
As we saw with the launch of Moonriver, there are some dependencies that projects may need before deployment, notably Chainlink oracles, Gnosis Safe support and The Graph. Again we can assume that the deployment process should be greatly optimized thanks to Moonriver.
Here are some other exciting deployments to look forward to in 2022.
Liquid Staked DOT via Lido
As mentioned previously, xcKSM is the final dependency before liquid staked KSM can be delivered on Moonriver. At current prices the value of staked KSM on Kusama is $1.2B. On Polkadot this number is $15B. That’s a lot of potential liquidity that can be unlocked via Lido on both Moonriver and Moonbeam.
For reference, Lido is currently responsible for 18% of staked ETH2.0, 21% of staked LUNA, and 0.7% of staked SOL. Unstaking on Solana takes up to 48 hours, which explains the low uptake of Lido on Solana.
There is no current timeframe for liquid staked DOT on Moonbeam, but assuming a smooth launch on Moonriver it shouldn’t be too far away.
DeFi2.0 via RomeDAO
RomeDAO, an Olympus fork on Moonriver, has big plans for Moonbeam. Similar to Olympus Pro, Rome Pro will be partnering with projects by supporting bonds for projects on Moonriver and Moonbeam this month.
RomeDAO has seen great growth over the last few months, and seems to sit an interesting intersection of defi2.0 and gamefi. RomeDAO currently represents almost half of all TVL on Moonriver.
Decentralized Derivative Trading via Firefly (FKA dTrade)
Firefly, a decentralized derivatives trading platform, have recently adjusted their plans to launch on Moonriver and will now solely focus on their Moonbeam deployment. In a recent announcement, the Firefly team said that they will begin testing in a few weeks on Moonbeam. Decentralized derivatives are a fast growing market, especially with exchanges and regulators worldwide cracking down on centralized exchanges that offer the service. With a higher barrier to entry than regular DEX’s, if Firefly can see some traction it would bring a lot of TVL and network activity to Moonbeam.
Here’s what else I’m excited for:
- SushiSwap — After a tough few months, it looks like SushiSwap is starting to get back on track under the guidance of Daniele Sesta. Daniele seems to be a fan of Moonriver/Moonbeam, and Sushi has already secured GLMR incentives for their Moonbeam deployment.
- Balancer — An OG defi protocol on Ethereum, Balancer is an exchange and automated portfolio management protocol. So far they haven’t seen too much traction outside of Ethereum ($2.8B TVL), but in early 2021 it was announced that Balancer will launch on Moonbeam after a collaboration with Parity and Moonbeam, funded by Balancer Labs.
- Lending — Lending is one of the key pillars for a DeFi ecosystem. To date there has not been a popular lending protocol to deploy on Moonriver, but I’d expect this to change on Moonbeam. Looking at some of the popular lending protocols on DefiLlama, it seems that most chains have their own “local” lending protocol, such as Anchor on Arbitrum, Benqi on Avalanche, Venus on BSC, Geist on Fantom, and so on. Let’s see how this plays out.
Honorable mentions: Zenlink, Solarbeam, Linear Finance.
Curve on Moonbeam?
There is some speculation that Curve is likely to deploy on Moonbeam. With liquid staked DOT on Moonbeam, it would make sense for Curve to deploy and soak up some of that liquidity. The stETH-ETH (Lido Staked ETH) pool on Curve currently boasts $4B in TVL, making up a large percentage of Curve’s $24B TVL. Interestingly, MixBytes, the team developing the liquid staked KSM/DOT, was an auditor for Curve. Also, Andre and Daniele seem to be very close recently. Probably nothing.
The Next Major L1
The timing of the launch of Moonbeam is actually quite good. Yes, the overall market isn’t as hot as it was a few months ago, but the Layer 1 narrative is alive and well. Just look at Aurora, the Near EVM that’s trading at a +$20B fully diluted valuation only a few weeks after launch and with less than $1B in TVL.
Protocols need liquidity and users, and Moonbeam looks like it could be where they can get it. The upcoming launches of Lido, SushiSwap, Balancer, and Firefly bring instant legitimacy and liquidity to Moonbeam, plus organic projects that are likely to spring up from the community will create value for nimble apes.
If there is going to be a Polkadot season, the most user friendly and developer friendly parachain will win a lot of market share. It’s not winner takes all, but the winner will take a lot. That winner is likely to be Moonbeam.
