DApps should pay to use platforms - not the reverse
I’ve now heard a few decentralized application (DApp) development teams suggest that platforms should pay DApps to build on top of them. I posit here that this type of incentivization scheme is what drains resources from Layer 1 development and funnels it to Layer 2, further stunting the already meager incentives to develop base layer protocols.
Changing Philosophies
There exists a general migration in philosophy away from the idea that maintaining blockchains is free, and towards the realization that having people and applications pay for what they use results in shared infrastructure that can better cater to the needs of users. This change in thought is in part because the tragedy of the commons (or free rider problem) has ballooned the cost of maintaining full nodes in major smart contract platforms. The status quo is that deploying a smart contract costs some money, but once it is deployed all nodes in the network have to store this state forever. This is why state pruning and state rent are becoming popular ideas and a must have for novel platforms to have from the start.
Blockchains as nation states
The closest associative in my opinion to blockchains are nation states. Nations provide much of the shared infrastructure and services businesses rely on. In return, they ask that corporations pay some tax. In this example, corporations are the application, nations are the platform. Nations unable to enforce their tax regime and collect taxes will eventually fail to provide basic infrastructure and services for their citizens. This is the tragedy of the commons in action. The analogy is exactly what we’re seeing today in Web3: little maintenance or direct incentive for developers to build out protocols.
In Polkadot, applications and protocols (corporations or states) must lock-up DOT tokens to gain access to the shared security and interoperability benefits of the Polkadot platform (the shared infrastructure). Lessees get their DOTs back at the end of their lease, but the opportunity cost of locking up DOTs lowers the outstanding circulation and thereby benefits other owners of the platform. This is a non-direct tax for using the shared infrastructure.
Incentives
It is understandable why application developers would argue that DApps should be paid to build on a specific platform. DApp teams are used to raising tens of millions of dollars in public initial coin offerings. Many of these DApps have held ICOs and are now the best capitalized projects in the space. This trend has effectively transferred wealth from platform owners and shifted incentives to build to the upper layers of the stack. This focus on applications is premature given the outstanding issues in shared infrastructure around scalability, developability, governance and interoperability. The reality is now that now most developers of open source base layer protocols don’t know how they will be paid post-deployment. This makes holding and ICO much more appealing.
Building a great platform
The reason why Aragon is exploring their own Layer 1 blockchain is because scalability, interoperability and governance are open issues in Web3. We at Web3 Foundation are focused on delivering a platform called Polkadot that we hope will solve all of these obstacles. And while we have a grants program and would consider any project that is developing usable, open-source software, our focus is making Polkadot a multi-client system that delivers a great protocol. Delivering a great product should be the focus of any base layer protocol. The DApps will come when scalalability, interoperability, developability and governance are solved.
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