Assignment | Blockzero Multi-Chain - A Future for Flash v3

Blockzero Multi-Chain

(A Future for Flash v3)

Overview

The future is multi-chain. A number of interesting L1’s are making strides in their quest to become competitive in the current DeFi hegemony. We want to explore which chains are most promising for Blockzero to expand into. Which ones will accumulate and maintain significant market share? What will the DeFi L1 landscape look like in 2-3 years? Help us predict these trends and guide our decision where to focus upon.

Team Flash is evaluating the viability of going mult-chain and we want the community involved in the analysis for this potential strategy. It’s an important decision that will be data informed and that we want to ensure we have clean inputs for.

To do so please take the following steps:
1. Step: Choose and prioritize factors to base a decision on.
2. Step: Collect and add data to compare.
3. Step: Apply and draw your conclusion!

Get some additional insight into this assignment in this video:

We’ve prepared a framework around what we see as the important factors when evaluating potential L1’s. Look at the framework prepared:

Step 1: Choose and prioritize factors to base a decision on!

In order to effectively compare different solutions we have to decide which dimensions to consider? Describe how you would take this decision and why you think this makes sense.
(When thinking about Flash v3 specifically we have to work with some assumptions. We do not yet know if the protocol will be fully cross-chain compatible or if it can only live on different chains in parallel.)

The framework linked (google sheet) below shows a number of dimensions to compare.

  • Which combination of dimensions would you evaluate to take a decision for bringing Flash to a new L1?
  • What is your rationale for this?
  • How would you prioritize the factors?
  • Do you see any factors that are missing?

Step 2: Collect and add data to compare

The framework linked in the google sheet has many missing fields. Please add in those you feel are most important to consider. If possible work directly within the google document. If that is not feasible for you you may also add your findings here.

  • Please add in some of the missing data fields in the framework. (Also provide relevant links.)
  • Maybe you identify another L1 solution that needs to be added to the framework. Please add lines.

Step 3: Apply and draw your conclusion!

Using the data available, what conclusion do you come to when applying your logic described in no.1? Provide your case for your chosen L1 solution!

Now that you’ve gone through the framework and put together a thought process for using it, apply the framework using the combination of factors you’ve prioritized for and build up a case for including an L1 of your choice in the Flash roadmap.

  • What is your conclusion? How do you reach it?

extra credit – additional questions:

  • In your view, what would be the main benefit in choosing something other than Ethereum?
  • Why would we want to stick with Ethereum and not expand to any other chain?
  • Are there other advantages in using different chains? (Why Layer 1, why not Layer 2?)
  • What are some good resources to research and compare different Layer 1 chains?
  • Add in some additional data (resource links) into our framework.

This Mental Mining Assignment is quite challenging. Our findings will help position Blockzero for the future. A total of 10,000 XIO is up for grabs and to be shared between all participants relative to the value provided. The discussion will be open for one week. This time the collective allocation of rewards will not start before Friday 24th.

[ again the link to the google sheet if you want to work on the framework ]

5 Likes

This is really a super interesting assignment. I am really looking forward to the various contributions. And much appreciated that you provide a good framework to follow. Given the depth of required research this is feels really important.

Some additions, the contributions in the Google Sheet are difficult to follow, I’ve made several incognito ones marked with FdT.

I also find it important, that posts are made with clear on your technical expertise in the field. A vetted Web3 developer should be more listened to than a party guy like me.
And we should refrain from spreading half truth or unreliable sources.
Perhaps a core member could highlight if technically false information appears?
Noteworthy, that should not limit people from posting their ideas and thoughts :slight_smile:

  1. Risk spreading and future proofing

  2. Higher security

  3. Better functionality for Flash smart contracting

  4. Lower gas fees - high efficiency

  5. Riding a hype wave

  6. Positioning XIO as blockchain agnostic

  7. Node diversification

  1. Loyalty & Nostalgic motives

  2. Focus for scaling

  3. Talent acquisition, assuming that most programmers are within ETH

Sorry, missed that q1 was just ONE argument. Find more reasons there.
Main differentiator between L1 and L2 to me is gas cost. Or the cost of verification. This breaks down to energy costs and here L2 would make a good case.
Number of transactions per minute might also be come a future concern depending on how many transactions you see coming for FlashV3?

This really depends on the level. For starters the educational part on coinbase, cmc are good. Reddit has some good threads for courses. Whitepapers are the most relevant I guess, but they are technically also tough.

Done.

6 Likes

Which combination of Dimensions would you evaluate to take decision for bringing Flash to a new L1

I premise all my comments with the disclaimer that I have no technical background, my comments are based on being an investor and what I look for when using a product.

The key criteria in order of importance are:

1.Size – as measured through a combination of users, volume, TVL. I see no point expanding to a new protocol if it will not give us access to a growing market place. The exception to this point would be emerging protocols that have deep support such as Cardano.

  1. Marketing – a protocol will live or die based on its market exposure. There are thousands of projects in the crypto space and many projects with great potential die on the vine due to a lack of exposure. Marketing is also critical to ensure that you stay ahead of the competition. Even a successful protocol will lose market share if it can not remain relevant in the market place and defend its position from new projects that hit the scene with a marketing flourish.

  2. Transaction cost – It needs to be a protocol that has low transaction costs which will allow more frequent trading. Lower transaction costs will also allow the entry of people that have small amounts of money to invest. Low transaction costs will open BZ to a tier of the crypto world that can not afford gas fees in uniswap. The world bank has a ranking of countries by income, there are over 100 countries that are not considered high income earners (annual income greater than $12000). With the growth in crypto many investors from the 100 poorer countries will be locked out of using protocols that have high transaction costs. If you have just $100 to invest you can not afford to burn up to half of that in gas fees.

  3. Team – to remain ahead of the pack you need a team that can address the future challenges that a protocol will face. The team needs to have a broad range of skills that will cover the key areas of maintaining and future proofing the protocol.

  4. Functionality – Dex’s typically have no functionality compared to a CEX. To buy a bargain you need to watch the market and buy in real time – snooze you lose. A Dex that allows buy and sell limit orders will allow people to enter and exit the market more efficiently. An example of this is quickswap on polygon, low transaction costs and has limit order functionality.

I will leave the technical assessment criteria to those that have the knowledge.

I noted functionality is not listed in the spreadsheet as an assessment criteria.

Extra Credit

Main benefit in choosing something other than Ethereum

As mentioned above the transaction costs on Uniswap really kills trading activity and is a significant barrier to entry to new users. Also it is important not to have all our eggs in the one basket. By having exposure in several environments it enhances our chance of attracting new investment.

BZ benefit rather than Flash issue

With the current explosion in launchpads many people see an investment in a launchpad as a dual stream investment – upside growth in the value of the underlying tokens plus access to the new projects being launched. The barrier to entry is the large number of tokens you need to buy to hit a guaranteed allocation tier.

BZ has the opportunity to leverage the growth in this area as you don’t need to buy a certain amount of tokens to get an allocation in future projects. This is a great advantage compared to a traditional launchpad and we could attract investors that don’t have the capital to get into a launchpad. However with Uniswap this is not viable for small amount of capital and we need a low cost solution

Why would we want to stick to Ethereum

I see no reason to limit BZ to Ethereum

Are there other advantages in using different chains

I think we should look at all viable options, in my comment on functionality I mention quickswap, I believe this is L2 and this is one of the best Dex’s I have used.

What are some good resources to research

I will need to look into this.

5 Likes

Ok, I will need some time to provide a real feedback on this one, but in the meantime I want to say this (I will psot my full response in a couple of days) :

We must use other chains. Eth is just impossible to use as a defi platform right now, for anyone that doesn’t move 100k $ per transaction.

And the reason in simple: gas fees.
Gas fees is what count. It is 99% of what matter in defi, believe me.
99% of normal crypto users don’t want to pay 70$ for a transaction.

Even I, every time I have to use the dropzero app, claim my rewards, move them, maybe swap them, end up paying 120$ in total fees, and sometimes the value I move is not even that.

I found myself using BSC (binance smart chain) literally 10 times more than eth. Paying 0.10$ per transaction with 10 seconds confirmation time. There is no real competition. Bsc wins hands down on eth.
Decentralisation? Cmon, who really cares in the crypto space? Maybe 5% of people here cares about decentralised protocols. Other 95% just want to save and make money.

Having said that, I think bsc is the easiest L1 to integrate and use (it is basically identical to eth and one can use it with metamask with no problems). Other L1 might be more difficult to use and integrate and people coming from eth might find them difficult to use.

See you later guys!

I’m tight with time this week. I’ll be quick.

Step 1: Choose and prioritize factors to base a decision on!

  • Transaction time
  • Efficiency
  • Safety

  • In your view, what would be the main benefit in choosing something other than Ethereum?
  • Why would we want to stick with Ethereum and not expand to any other chain?

Main benefit and why we would not want to stay with Ethereum are definately gas prices and its a lot slower than the new technologies. We might want to stay on Ethereum because its well known and a lot of developers are in that pool. As we already know avalanche has a lot of benefits. Although solana has higher TVL it still has some problems to date.


This image tells 1000 words.

  • Are there other advantages in using different chains? (Why Layer 1, why not Layer 2?)

If we start on the wrong path (Layer 1) there are no good solutions to scale it (Layer 2).

  • Add in some additional data (resource links) into our framework. :+1:
8 Likes

It’s about time BZ to expand…
I suggest Avalanche with closed eyes!
Everyone’s looking for cheaper, faster, and more reliable ones!

What problems does Avalanche solve?

  • There are three main problems Avalanche attempts to solve. These are related to scalability, transaction fees, and interoperability (as they do).

6 Likes

Why not adding BSC in your image?

Anyway, I am not a bsc fan boy or anything, my main capital is still on eth, but I want to add a thing on the bsc option ; FREE HIGH LEVEL MARKETING

let me explain. This is a huge opportunity.

Binance itself often sponsor or tweet about new and interesting defi project on the bsc chain.
Just image what would happen if flash v3 appeared on the binance twitter account. Also, other big bsc project like pancakeswap often integrate and sponsor new defi team and platform or tokens… This could be a huge opportunity for visibility

4 Likes

although at first sight this assignment looks very technical and i was going to skip it since i don’t have much of technical expertize; i reconsidered this option, and i’m thinking that if @jorn was looking for real in-depth hardcore technical analysis he wouldn’t have brought it here :slight_smile: … we are in the Mental Mining Crew, not Devs Team :slight_smile:

so, i will try to look at it as a user and not as an engineer.

Step 1: Choose and prioritize factors to base a decision on!

  • the 1st critical factor for me would be “gas fees” ; lower fees should reflect in participants quantity.
    there are some good projects out there, but to participate one needs to pay like $2-3hundred … for a 10-15k investment is not a problem … but if one has $1000 or less to invest each month and needs to do one or two transaction … is like 20% of the investment … and the majority of the people willing to invest in such projects are left behind because of this high fees.
    this money are invested in other places with higher returns… apy is not the only important indicator.

  • 2nd it’s “community” , with strong and devoted community it’s easier to create hype for a newly lunched project.
    as an example, Flare Finance just sold around 5k NFTs for a total of around 2M in like 1week … now, FlareFi doesn’t have anything released yet, but they managed to do so using the community of Flare Networks, who missed all the deadlines for the main network till now, but they used the Ripple community (#xrparmy baby :muscle: :slight_smile: )

  • 3rd should be “security”.

…i don’t see why we should not be a cross-chain. technically wise i can understand it is challenging to put it in practice but …

till now i don’t understand why Rubic Fi is listed, seems in a different category .

Based on step1 i would incline to consider that a platform like Avalanche makes more sense for the initial release, although i would like to go cross-chain with
Ethereum - Avalanche/Sol/Dot - Algo/Vet/Ftm …as a three-way … we would reach a broader participation.

see Step1

we don’t want that :slight_smile:

1 Like

Let’s say that there’s ‘free’ marketing. What would you say are the cost of this free lunch?

Okay you made your point and i admit it sounds nice but the problem here is are they doing that for free or its sponsored to announce that kind of tweets/contests. I think binance as exchange can be pretty expensive for sponsoring etc …

I think for the ‘true believers’ of the crypto ideal - BSC is a bridge too far. It does have some history in regards to security, rug pulls and its degree of centralisation but if you want exposure it is hard to ignore one of the major platforms.

2 Likes

Perhaps it helps to differentiate the discussion between exchange and underlying blockchain?
Or if they are that intertwined weigh the tech aspects of the blockchain more?

Just added some fields about COSMOS - some of these are really hard to find.

As said by the guys above we won’t stick to ETH because of these ridiculous Gas fees. I often read that “I would like to buy XIO, but the gas charges put me off.” I myself have some XIO in the dropzero, and when I tried to do the claim recently, it was supposed to cost me $ 250 - that’s why I’m waiting for the gas to decrease (I hope to see it). Currently, the purchase of XIO pays off only with large amounts, which is why it is not profitable for small investors (which probably means that XIO loses 50% of the market) - so staying on ETH will only be an obstacle.

3 Likes

Totally agree, the cost is a major factor. I think we are losing out on more than 50% of the crypto investor pool as the amounts they have to invest would be absorbed by the gas fees. If you look at XIO stats, BZ has 6581 wallet holders, 4760 of them hold less than 1000 XIO – that is 72% of the total. I think you can roughly apply this % across the crypto market as a whole. The gas fees also prevent DCA for small amounts.

4 Likes

In order to effectively compare different solutions we have to decide which dimensions to consider?

I picked 3 options that I think matter the most:

  • User growth rate - definitely really important since it shows how fast the platform’s userbase and itself is growing.

  • Tech complexity - if you mean how good the technology is by it then it should be the most important thing.

  • Build incentives - if your platform doesn’t have anything to attract new users with then it has no true value.

Which combination of dimensions would you evaluate to take a decision for bringing Flash to a new L1?

  • Almost same as before: tech complexity, user growth rate but for the third dimension I would pick roadmap (upgrade frequency). I think so because as a developer you should see what the platforms team is planning ahead so you can prepare for it or get some kind of an idea of the platforms future. Also, I think that technology is the most important dimension of them all.

Do you see any factors that are missing?

  • Security - I think it’s important because you would like the platform to be as secure as possible.

  • Transaction time/cost - definitely really important for the users of the platform. Especially for smaller investors.

Conclusion: I think Avalanche is the clear winner here for me

  • Having used it I really like it and it’s simple to use.

  • Fast transactions with low costs.

  • Growing community and gainig a lot of popularity + interest from a lot of investors.

  • They have some incentives for smaller investors to join as staking and getting airdrops for staking.

In your view, what would be the main benefit in choosing something other than Ethereum?

  • Definitely transaction costs because they are absolutely ridiculous right now. As I saw mentioned in the comments it definitely scares smaller investors away. Also transaction speed could be improved on.

Why would we want to stick with Ethereum and not expand to any other chain?

  • I really can’t see any other reason to use Ethereum than that a lot of people are using it and a lot of projects are built on it.

Why Layer 1, why not Layer 2?

  • As I understand there’s no point to use layer 2 since it can be later used to solve problems. For example tps. I might be really off with this one.

What are some good resources to research and compare different Layer 1 chains?

PS: in the google docs I’m anonymous but I added QB at the bottom. Nevermind, added it to only 1 answer :smiley:

2 Likes

[quote=“Quality_Butter, post:15, topic:1675”]
Which combination of dimensions would you evaluate to take a decision for bringing Flash to a new L1?

  • Almost same as before: tech complexity, user growth rate but for the third dimension I would pick roadmap (upgrade frequency). I think so because as a developer you should see what the platforms team is planning ahead so you can prepare for it or get some kind of an idea of the platforms future
    [/quote]
    The following is off topic, but - You make an interesting point about the roadmap. I agree it is important and something I often look at when exploring other projects. BZ does not have a typical crypto roadmap that I can find either in the discord or on the website. There are various comments/status reports,medium articles etc but not a dedicated roadmap for BZ. If we use roadmaps to get a feel for where a project is going then I assume others are also looking for the same thing when considering BZ. I will ask a question in the discord.
2 Likes

Definitely a great observation. Never thought about why the Blockzero labs didn’t have a roadmap :smiley:

Finally a much needed step in the right direction :rocket: :rocket: Becoming multichain was an inevitability, and it’s cool that we’re focusing on this right now when we’re getting close to another altseason that will push eth gas fees once again to $100+

Well first of all we should look at the TVL, the ethereum compatibility, how user friendly it is, and the hype surrounding the chain.

From this point of view I guess Cardano can be excluded from the start, sicne it uses a different programming language and it’s not very friendly to ETH developers. I would also exclude Solana, at least until they get their shit together and become more secure/decentralised. Avalanche is nice I guess, and from what I heard they also became easy to use with Metamask. Users want a simple chain that can be used with just Metamask or Wallet Connect usually, since they already use them for all their ETH DeFi transactions. From this point of view Polygon and BSC were the easiest to use for me up until now.

I added Polygon on the google sheet, since from what I know Polygon is also a L1/sidechain instead of a true L2. Maybe the team can update the fields faster? Btw I’m not used to these google sheets since I never had to use them until now haha.

Also since this is an assigment about L1 chains and not L2 I didn’t add anything about Arbitrum or Optimism, but in my opinion these should be the most important ones to focus on. If we look on https://l2beat.com/ we’ll see that Arbitrum already has a $2.2 billion TVL and it was recently launched. This to me is bullish as fuck :rocket: :rocket: Besides this, I just read this article today about Optimism: Optimism announces upgrades enabling ‘one-click’ roll-up deployment If this is true and they succeed with simplifying their onboarding procedure there’s no reason why Blockzero can’t move to Optimism in the following 2-3 months.

I would rather go with a combination of Arbitrum, Optimism and maybe Polygon and/or Avalanche as sidechains. There’s also BSC to take into consideration :wink: Let’s not forget that what we’re interested in is TVL and numbers of users. From these points of view BSC beats many other L1’s. Being stuck up with an attitude of decentralization maximalists will only hurt us in the long term.

Speed and cheap transactions are cool, but and becoming one of the first DeFi protocols on a new chain is also important. Being one of the first will bring eyes on our project for free, and we sure need that since right now no one knows Blockzero exists…

There’s absolutely no reason to do that.

Maybe if some chains help with marketing it would be awesome. Blockzero appearing on the Optimism or Arbitrum website would be nice… I would rather go with L2 tbh, cuz the security relies on ETH, but ultimately becoming multichain will be better in the long term because we’ll gain way more users this way.

Reddit I guess? :laughing:

2 Likes

I honestly just think eth gas prices are too much i have used avalanche and matic and they aren’t bad in terms of fees bsc is not bad either but i already know thats a no for us. When it comes to speed avalanche and matic are not bad either i have no facts to back my reason but i have actually use them myself. Ethereum is here to stay and seems more secure but for persons like myself who can’t afford the gas fees mattic might not be bad. Avalanche was a bit complicated at first i read a post where it says its easier now so anyone of the two might not be bad.

This is easy to follow