Ecosystem mastery, part I: Leveraging infrastructure

Let the the past decade of crypto development boost your blockchain!

Despite years of intensive development, the crypto market remains brutal and mercenary. How can new ecosystems grow, evolve, and foster trust in this unforgiving landscape?

Having occupied front-row seats in every crypto cycle since xxx, we have learned what it takes. In this three-part series, we’ll be sharing the key principles required to create strong, dynamic ecosystems that developers can harness, and users can trust.

The principles presented are based on the analysis of ecosystems, including but not limited to Ethereum, Cosmos, and Solana. What works, and what doesn’t? Find out below!

Part 2 already here.
Part 3 already here.

Intro

In this article, we will cover the foundations every ecosystem builder must construct. These are critical to the success of any ecosystem and serve as the building blocks for all future development.

To be successful, a new blockchain must have the following properties:

• Stability
• A clear roadmap that can be understood by developers and users alike

In order to accommodate these properties, strong communication channels between developers and users must be established. Failing this leads to project opacity, user mistrust, and ultimately adoption failure.

Let’s explore what a successful implementation looks like. Bear in mind these are general recommendations, and bespoke tailoring is required for specific blockchain technologies.

The basics

“The strength of an ecosystem is not measured by its TPS, but by its infrastructure, DevRel, and roadmap.”

— Vitali Dervoed

It is an attractive idea, romantic even, to build an ecosystem using only natively developed tools. This is the route of the purist — the maximalist — and is great for developing a Twitter following.

In the real world, however — the world of shipping a Web3 ecosystem users can actually use — this is a road to nowhere. The sunk cost of building every pillar of fundamental infrastructure (which we’ll list below) yourself is enormous in both time and capital.

While it may sound alluring to start with an entirely clean sheet, it is at best arrogant to disregard all of the development made in the blockchain space over the past decade, and at worst negligent to deny your developers the tools they need to build your vision.

Put yourself in the shoes of a Web3 developer who is open to building in your ecosystem, but is not a maximalist who believes your ecosystem will rule supreme over all others (i.e. the majority of Web3 developers). Why would you stay and build in an ecosystem that lacks the tools freely available to others? The answer is a short one.

In this article, we’ll explore the necessary toolkit of services required for a successful Web3 ecosystem. These are tools your developers — and investors — will expect you to have, and can be easily integrated in a partnership with established service providers. Alternatively, porting services with the endorsement of a reputable company in the market (as illustrated in each point) can also be effective in accelerating development.

A map for the uninitiated. We’ll be exploring the left two columns today.

Offchain Data

Indexers

Indexers play a vital role in providing on-chain data and analytics to users. They allow for efficient searching and analysis of blockchain data.

Some popular indexers include:

• TheGraph
• Dune Analytics

These indexers offer various features such as data querying, visualizations, and custom dashboards, making it easier for developers and researchers to gain insights from blockchain data.

Explorers

Blockchain explorers empower users to browse and explore blockchain activities, including its transactions, addresses, tokens, prices, and associated metadata. These tools typically also provide APIs for developers to access blockchain data directly.

Popular blockchain explorers include:

• Etherscan: A popular explorer for the Ethereum network that offers transaction tracking, token analytics, contract verification, and more
• Blockscout: Another Ethereum explorer that allows users to search for transactions, contracts, addresses, and blocks, and offers analytics and charts
• Blockchain.com: A blockchain explorer that supports multiple networks such as Bitcoin, Ethereum, and Bitcoin Cash, and offers real-time data, charts, and statistics

Node RPC

Node RPC, or Node Remote Procedure Call, is a protocol that allows clients to interact with a node remotely, enabling them to perform tasks such as querying data, sending transactions, and interacting with smart contracts on the blockchain. Node RPC is often distributed as a software development kit (SDK) for developers to integrate with their projects.

Some examples of Node RPC SDKs include ethers and near-api-js, which provide interfaces for developers to interact with Ethereum and NEAR Protocol nodes respectively.

Node providers

Node providers are companies that offer hosting services for blockchain nodes, which play a crucial role in the operation of a decentralized network. By providing node infrastructure, these companies help to prevent centralization while also making it easier for developers and projects to interact with the blockchain.

Some popular node providers include Infura and QuickNode. These companies offer reliable and scalable node hosting services that allow developers to focus on building their applications without worrying about the complexities of running and maintaining their own nodes.

Oracles

Oracles are a vital component in blockchain-based systems as they facilitate the flow of data from off-chain sources to on-chain decentralized applications (dApps). This data can be used for various purposes such as lending protocols, insurance, and more.

Some of the most popular oracle solutions include:

• Chainlink: a decentralized oracle network that provides reliable and tamper-proof inputs and outputs for complex smart contracts on any blockchain
• UMA: an open-source protocol that allows developers to create synthetic assets that track the price of any underlying asset, using oracles to ensure the price feeds are accurate
• Witnet: a decentralized oracle network that enables dApps to securely retrieve and verify off-chain data in a trustless manner

By leveraging the power of oracles, developers can create more robust and reliable dApps that can access and utilize data from the real world.

Elements of the ecosystem not directly connected with the blockchain

Wallets & Custody

Wallets provide a secure means for users to have self-custody of their private keys and digital assets. This decentralized approach puts users in full control of their funds, eliminating the need for trust in any central authority and reducing the risk of hacks. Wallets also serve as gateways through which users can interact with DeFi and other web3 applications.

Here are some examples of popular wallets:

• Metamask
• Zerion
• Phantom
• Ultimate Money

Bridges

Bridges are essential components of the blockchain ecosystem as they enable the transfer of assets between different networks and facilitate cross-chain communication. By providing interoperability, bridges make it possible for users to access a wider range of services and assets, increasing the overall utility of the blockchain.

Some popular examples of bridges include AllBridges and deBridge. These services enable users to transfer assets between different networks and protocols, making it easier for them to access a broader range of applications and services.

Security auditors

Security audits are crucial to ensure the safety and reliability of smart contracts and projects in the blockchain ecosystem. They help to identify and mitigate potential vulnerabilities that could compromise the integrity of the project, instilling confidence in the users and investors.

Here are some examples of companies and services that provide security audits for smart contracts and projects:

• sec3
• OtterSec
• ConsenSys Diligence
• CertiK
• Ackee
• Neodyme

These companies conduct thorough reviews of the codebase, analyzing it for potential bugs, vulnerabilities, and other security issues. Their expertise and experience are invaluable in identifying and addressing potential risks, ensuring the long-term success of the project.

Decentralized storage

This enables the storage of large amounts of data in a decentralized manner, without requiring the data to be stored on the blockchain itself.

Here are some examples of popular decentralized storage solutions:

• InterPlanetary File System (IPFS)
• Arweave
• Swarm

These solutions utilize peer-to-peer networks to distribute and store data across a decentralized network of nodes, making it more resistant to censorship and data loss.

Development Tooling

Multisig and other abstractions

Abstractions are essential tools for building decentralized applications. They help standardize projects and simplify the development process. Here are some commonly used abstractions:

• Multisig: a tool that enables multiple parties to collectively manage a set of funds or assets. The Gnosis Safe is a popular implementation of multisig
• Upgradable proxy: a design pattern that allows a smart contract to be upgraded without disrupting the state or data already stored on the blockchain. OpenZeppelin provides an implementation of this pattern
• Contract factory: a smart contract that can create and manage other contracts. This abstraction is useful for creating new instances of a contract without needing to write new code each time. OpenZeppelin also provides an implementation of this pattern
• Royalty: a mechanism for distributing payments or rewards to contributors or creators of a project. This abstraction is useful for incentivizing and compensating individuals who contribute to a project
• Delegating, approvals, permits, locking, etc.: various other abstractions that can be used to simplify and standardize smart contract development. These include delegation patterns, approval patterns, permit patterns, and locking mechanisms

By using these abstractions, developers can reduce the amount of code they need to write, make their code more modular, and improve the security and reliability of their smart contracts.

Governance + DAO tools

A Decentralized Autonomous Organization (DAO) is a novel way of organizing people and capital in a decentralized manner. To operate successfully, a DAO requires an ecosystem that provides several underlying technologies, such as pools, protocol management, and more.

One of the most popular platforms for constructing DAOs is Aragon, which provides a user-friendly interface for creating, managing, and governing decentralized organizations. You can learn more about Aragon and explore its features here.

Token standards

In order to establish basic abstractions within the blockchain, it is necessary to have a standardized set of interface descriptions.

Some of the most commonly used standards include the

• ERC-20 : Standard Fungible Token
• ERC-721 : Non-fungible Token Standard
• ERC-1067 : Upgradeable Token Contract Standard
• ERC-1155 : Multi-Tokens Standard
• ERC-1238 : Non-Transferrable Tokens AKA Badges

You can find the most popular implementation at https://docs.openzeppelin.com/. It’s important to note that dependence on blockchain architecture standards could be extended or completely changed.

Conclusion

This article highlights the existing blockchain infrastructure that can drastically accelerate the growth and development of blockchain ecosystems.

Stay tuned for the next installment in this series, where we will explore the importance of financial services in delivering ecosystem functionality and attracting users, ultimately leading to an increase in Total Value Locked (TVL). These financial services can include lending, borrowing, and yield farming, and by partnering with established providers or integrating their solutions, builders can drive adoption and accelerate growth.

This article is a collaboration with our friends and ambassadors Arsenii Pechenkin and Boaz Shoshan.

Part 2 already here.
Part 3 already here.