Birdeye Exploration: A Comparison of EVM Chains
Deciding which projects to invest in can be a headache. To evaluate them, it’s important for crypto traders and investors to learn about the up-to-date scalability, security, cost, and ecosystem of the chains they are based on. Many of which are Ethereum-based or EVM chain-based.
In this blog post, we’ll explore the general advantages other EVM networks have over Ethereum, their individual advantages and disadvantages, and their current ecosystem landscape. We hope that will help you evaluate the capabilities and ecosystem quality of these networks.
Introduction to Ethereum and other EVM networks
Ethereum Virtual Machine, or EVM, is the software that executes smart contracts and gas fees for Ethereum. EVM blockchains, or EVM-compatible blockchains, include those that have been built using EVM’s common programming language (Layer 1s) or on top of Ethereum (Layer 2s). This means that a decentralized application (dApp) built on one EVM chain could be more easily developed and used on another EVM chain than on a non-EVM chain.
Ethereum’s successor chains, such as BNB Chain, Arbitrum, Optimism, Base, zkSync Era (or zkSync), Polygon, and Avalanche, have been developed to deliver better:
- Scalability: Alternative EVM-compatible blockchains can often process more transactions per second (TPS) than Ethereum as they use different consensus mechanisms (Proof of Stake, Delegated Proof of Stake) or sharding techniques (such as Key-Based Sharding).
- Gas fees: Successor EVM-compatible blockchains often have lower transaction fees than Ethereum. This is because they are less congested and have lower costs associated with block production.
- Privacy: Some EVM-compatible blockchains offer privacy features that are not available on Ethereum, such as zk-SNARK, zk-STARK, Fault Proof System, and more.
We’ll dive deeper into each chain’s transaction per second (TPS), average gas fees, security, and landscape overview in the section below.
Insights into each EVM chain: Ethereum, BNB Chain, Arbitrum, Optimism, Base, zkSync Era, Polygon, and Avalanche
1. Ethereum
Ethereum has a relatively strong security record, given its complexity and the value of assets stored on its blockchain. However, it has not been immune to hacks and other security incidents. The DAO’s infamous US$60M hack due to a code loophole in 2016 was one of the first major hacks on the Ethereum ecosystem.
However, Ethereum is still considered the most mature and established blockchain ecosystem, hosting a significant share of web3 projects, including DeFi, NFTs, and infrastructure. Moguls like Uniswap (DEX, TVL US$2.1B), Aave (lending protocol, TVL US$5.6B), OpenSea (NFT marketplace), MetaMask (web3 wallet) were all initially deployed on Ethereum to benefit from its extensive community.
2. BNB Chain
BNB Chain (also previously known as Binance Smart Chain or BSC) is a Layer 1 network that has a considerable security record, but it has been subject to a few notable hacks. In 2019, a vulnerability in the BNB Chain consensus mechanism allowed attackers to create fraudulent transactions worth US$40M. The loophole was quickly fixed and all the funds were recovered.
BNB Chain is, by far, the second-largest Layer 1 blockchain with a growing focus on DeFi and gaming. The chain has become home to popular platforms like PancakeSwap (DEX, TVL US$1.4B), Alien Worlds (web3 game), and Galxe (community-building provider).
3. Arbitrum
Arbitrum is a Layer 2 that uses a technique called optimistic rollups to bundle transactions together and process them off-chain. Arbitrum has a relatively short track record, so it hasn’t been subjected to any notable hacks or 51% attacks. However, it aims to maintain a secure and reliable network for its users, using zk-SNARK protocol to prove the validity of transactions off-chain. This makes it more difficult for attackers to double-spend coins or censor transactions.
The majority of projects on Arbitrum ecosystem at the moment, such as GMX, Radiant, Uniswap, and Aave, fall into the DeFi category. They are accompanied by Arbitrum’s good range of bridges, onramps, and infrastructure and tools to support users’ seamless onboarding. Many GameFi and NFT projects have also found their home on Arbitrum.
4. Optimism
Optimism, similar to Arbitrum, is also a Layer 2 scaling solution for Ethereum. Its robust security is contributed by the combination of optimistic rollups, fraud proofs, code audits, and an active community. Optimism is also exploring the integration of zk-SNARKs, which would provide an additional layer of privacy and security for transactions. This integration is expected to further strengthen the chain’s security posture and make it even more attractive to users.
Optimism ecosystem has a wide variety of tools in support of its growing pool of DeFi protocols, including bridges, onramps, wallets, and other tools. A few popular DeFi projects on this chain are Synthetix (DeFi protocol, TVL US$474M) and Lyra Finance (decentralized options protocol).
5. Base
Base is the most recent Ethereum L2 solution addition to the Web3 ecosystem. It’s built on Optimism’s technology, called OP Stack, with additional enhancements to security and lower transaction fees. Inheriting Optimism’s brand name and being built by Coinbase (the biggest exchange in the US), Base quickly became a formidable network, competing with other L2s.
Although only being launched this year, Base has already amassed hundreds of projects in its ecosystem. It includes some of the most infamous multichain projects like Compound (DeFi protocol, TVL US$2.2B), Curve (DEX, TVL US$1.7B), and Balancer (AMM protocol, TVL US$836M). It’s also popularly known for being the first home of friend.tech, the web3 social dApp endorsed by celebrities like NBA player Grayson Allen.
6. zkSync Era
zkSync Era, or zkSync, is a Layer 2 protocol on Ethereum. Its security relies much on the combination of Ethereum’s security, zk-SNARK, zk-STARK, and external and internal audits. Like Base, zkSync continues to evolve and improves its security measures over time.
Although recently launched, its ecosystem already has an extensive list of projects across almost all three categories one could think of, even including high-risk sectors. The majority of the projects, however, fall into the DeFi category to benefit from the zero-knowledge infrastructure zkSync has to offer.
7. Polygon
Polygon is a Layer 2 scaling solution for Ethereum that utilizes a technique called sidechains to process transactions off-chain. Polygon’s security record is commendable, and it has demonstrated resilience against various security threats. The combination of sidechains, PoS consensus, and an active bug bounty community has contributed to its robust security position.
Polygon has cultivated a well-established and diverse ecosystem, attracting a wide range of projects, including DeFi protocols (i.e., Sushiswap), CEXes (i.e., Bittrex), web3 games (i.e., Sunflower Land), and more. Starting in August 2022, Polygon has been carefully managing its growth.
8. Avalanche
Avalanche is a standalone Layer 1 blockchain that utilizes a unique consensus mechanism called the Snow Protocol. The chain’s security relies much on the combination of the Snow Protocol, subnets, and an active bug bounty community. No blockchain is entirely immune to hacks, and Avalanche social app Stars Arena was reported to have lost US$3M from a smart contract exploit recently. However, 90% of the drained funds have been recovered and the remaining amount was offered as bounty to the hacker.
The Avalanche ecosystem includes a diverse range of applications, including DEXes (i.e., Trader Joe) and DeFi protocols (i.e., Yeti Swap). Similar to Polygon, the chain has been taking a more measured approach to its growth since November 2022.
Crypto traders and investors: be on your feet every day
As the web3 landscape fluctuates every day, it is crucial to understand each blockchain's advantages and drawbacks, as well as get updates on their emerging projects and latest developments. By doing so, crypto traders and investors can make better-informed decisions that align with their risk tolerance and investment goals.
Disclaimer
Birdeye only serves as a supporting tool to help users make informed trading decisions, not giving them financial advice! Please always conduct your own research and take responsibility for all of your investment decisions.
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