While many sweat on the ever-delayed “merge” that will see Ethereum, the predominant first-mover smart contract blockchain, upgrade from an energy intensive proof-of-work to proof-of-stake (aka: Ethereum 2.0) network, Polkadot Parachain Moonbeam already does Ethereum 2.0 out of the blocks, and much more besides.
Ethere … ummm?
As the Ethereum Foundation have gone to great lengths to prove, the perennially delayed upgrade to Ethereum 2.0 is a challenge to ship. Analogised as akin to “changing all four engines on a 747 mid flight,” what was first proposed in 2015, and forecast to arrive the following year, was recently scheduled to arrive in April of 2022. That date has now been revised to August.
The explosion of DeFi in 2020 skyrocketed the gas fees on Ethereum, in effect pricing most of the world’s population out of participation.
While layer 2 solutions such as Plasma and ZK-Rollups offer some relief for developers and more literate users, this added complexity, coupled with ongoing concerns over its sustainability and governance credentials only exacerbate Ethereum’s “existential” scalability and use case limitations.
In the interim a raft of so-called “Ethereum Killer” Layer 1’s have stepped into the breach, gaining market share relative to their respective speed, cost, agility and security trade-off’s.
Yet it is Polkadot’s solution for a scalable, interoperable, secure and inexpensive multi-chain ecosystem that has fostered, as one of its first Parachains, a marquee Layer 1 smart contract protocol to eclipse all others.
To the Moonbeam!
Moonbeam is an Ethereum compatible smart contract platform built using Polkadot’s native Substrate coding language. It provides developers using Solidity, Viper or any other language compatible with the EVM bytecode the ability to migrate, with minimal changes, to the superior scaling, governance, interoperability and security of Polkadot.
Enabling EVM-based projects to continue using familiar tools such as Truffle, Waffle, Remix and most importantly Metamask, as Guy from Coin Bureau mused in March of this year:
“Imagine a top Ethereum based DEX such as Uniswap for instance, being able to seamlessly migrate and operate on Polkadot. With Moonbeam that could become a reality. Now that really would be something.”
As it happens, a Uniswap ‘V3’ proposal called ‘Mulitchain Uniswap’ passed this week to deploy on Moonbeam.
By offering an easy onramp to Polkadot, Moonbeam’s premise is that it can attract existing Ethereum-based projects, currently painted into a corner, a way out of their endemic adoption and scaling predicaments.
Given the vast majority of projects in this space are built using Ethereum-based tooling, Moonbeam’s MVP of EVM-Substrate compatibility will, according to founder, Derek Yoo, “give ourselves access to the largest market of existing blockchain developers.”
Yet, Moonbeam does much more than simply connect Ethereum to Polkadot. To see why we need to dig a little deeper.
Polkadot: What’s the Point?
In 2016, the co-founder, CTO and person most responsible for coding Ethereum into existence, Dr. Gavin Wood, left the project frustrated by the lack of development on Eth 2.0.
Keen to pursue his “dream” of an “open, transparent, jurisdiction-neutral techno-legal system,” Wood sought to “deliver on the promises Ethereum could not” via the creation, from scratch, of what he inimitably describes as “the blockchain of blockchains.”
Wood’s vision for Polkadot was founded on the premise that no single blockchain works optimally for every use case. His idea was to succeed the limitations of customary ‘general purpose’ blockchains by devising an underlying ‘Layer Zero’ framework for seamlessly linking multiple specialised chains together.
First, Wood designed Substrate, a novel blockchain-specific programming language. Using Substrate, he built Polkadot’s Layer Zero ‘Relay Chain’.
The Relay Chain enables multiple specialised chains, called ‘Parachains’, also written in Substrate, to run atop it.
By shortcutting much of the work of building new blockchains from scratch, Polkadot’s “innovation maximalist” value proposition is to serve as the nexus for attracting builders to its promise of a multi-purpose, multi-chain future.
You can read more about Polkadot in a related post here.
Clearly enamoured with Polkadot’s vision, execution and potential for garnering a new taxonomy of network effect, after a spectacularly successful crowd-loan, Moonbeam is one of the first Parachains to launch on Polkadot.
Using Moonbeam, EVM-based protocols can similarly gain exposure to and exploit the virtues of Polkadot. These include two other unique features that place Polkadot, and by-proxy Moonbeam, in a class of their own.
The Future is also ‘Cross-Chain’
One of the most innovative and promising of all of Polkadot’s innovations is its novel ‘Cross-Consensus Messaging’ (XCM) format.
XCM facilitates the seamless communication, transaction and transferal of data and assets between Polkadot Parachains.
Recently buttressed by the addition of Moonbeam’s XC-20 token framework that is mimetic of and operational with the ERC-20 token standard, XC-20 provides the ability to move assets not only cross-Parachain, but securely bridge to other chains outside the Polkadot ecosystem.
Unlocking both Substrate and EVM-based developers ability to reach new users and assets, XCM/XC-20 are game-changing technological developments from which unprecedented new value propositions and revenue streams are beginning to emerge.
Moonbeam, therefore, is much more than simply ‘Ethereum on Polkadot’. Expanding EVM capability significantly, its comprehensively rich toolkit offers developers the opportunity to both experiment with building new cross-chain applications and/or add new features to expand the use cases of existing ones.
Moonriver: Moonbeam’s “Wild Cousin”
Among all of Wood’s innovations with Polkadot, however, what can be considered perhaps most unique, and potentially impactful, is the addition of its complementary ‘Kusama’ chain.
Named after the Japanese ‘Polkadot’ artist, Kusama is a sovereign, tokenized canary test-net designed to implement real-world, skin-in-the-game value-signal conditions.
Kusama’s core purpose is to provide Parachain projects the ability to not only test their code, but run experiments with new ideas and features before deploying to Polkadot’s higher value main-net.
It is Kusama’s ostensible ‘secondary’ purpose, however, is where things get interesting.
While sharing the same code and design as Polkadot, Kusama is configured to run four times faster. Optimised to push harder at the boundaries of what is possible, Kusama and its Parachains also have their own tokenomic structure distinct from Polkadot and its Parachains.
Attracting a different persuasion of developer and user, this dual-network (‘Dotsama’ aka: Polkadot and Kusama) approach fosters different kinds of communities and constituencies who will natively self-determine different governance mechanisms and trajectories.
Moonbeam’s Kusama network ‘Moonriver’, is no exception.
Moonriver’s tokenomics are considerably more community oriented than the institutionally weighted Moonbeam.
Moonriver bears all the hallmarks of Kusama’s “fast moving, no promises, expect chaos, make it or break it” character. Still leveraging all the sophistication of Moonbeam’s developer toolkit, Moonriver is more suited to gaming and NFT experiments that don’t require the same level of security as the more financially oriented, institutional-grade offerings on Moonbeam.
Saying that, as the founder of Moonbeam, Derek Yoo, reveals of his experience launching Moonriver:
“This network doesn’t always want to be second fiddle to Polkadot … these things tend to have a life of their own, and a way of expressing their own collective will … and we’re seeing teams that are targeting Kusama as their final deployment destination … they’re like, ‘no that’s where I want to be’, and don’t even want to go to Polkadot.”
While both Moonbeam and Moonriver remain distinctly unique, the benefit of running on two different networks is, according to Yoo, axiomatic:
“We’re in the business of creating blockspace … that’s the scarce resource we have that developers are trying to get access to … Dotsama projects are the shovel to dig that blockspace up … [put simply] having two blockspaces doubles our capacity to bring products to market.”
Decentralisation’s Promised Land
Only launched in January of this year, with the first iteration of its XC-20 token framework made available this April, Moonbeam is still under development and far from reaching full operational potential.
Nonetheless, more than 90 APIs, bridges, oracles, dApps, DeFi components, explorers, storage providers and Web3 wallets have deployed to Moonbeam to date, not to mention Uniswap’s V3 proposal having passed community vote only yesterday.
These projects, just starting to reap the benefits of Polkadot’s multi-chain architecture, will in time compound these advantages as Polkadot’s game-changing XCM cross-consensus messaging gathers momentum.
Having the potential to supercharge the disparate components of the broader ecosystem in ways hitherto unseen, Moonbeam is a lighting rod for not only EVM-Substrate compatibility, but a much-more-than-the-sum-of-its-parts cross-chain network effect.
This is the real “merge” the market should be paying attention to. Not an upgrade to the quotidian, but a salient path toward the seamless integration of an Internet of blockchains capable of delivering humanity genuine sovereignty over its digital interactions and decisions.
If the holy grail of crypto mass adoption is to occur, it must do so on a multiplicity of super-rails working together under one, easy to navigate hood. Polkadot’s, and by extension Moonbeam’s, technical prowess in understanding how to abstract away all of this complexity so you don’t have to, is Web3’s killer app: It’s Ethereum 3.0, today.
Polkadot Parachains are now live! Stake with StakeBaby.
Russell Hughes has a PhD from the RMIT School of Architecture and Design, and is an Honorary Fellow of the University of Queensland Faculty of Engineering, Architecture and Information Technology.
