I recently read content from Moralis ‘Academy’. Some of you may already be familiar with Moralis due to the ‘SDK’ product.
They have a perplexing summary on the differences between Blockchains by Layer types 1, 2 & 3.
‘Layer-2 (L2) networks help the blockchain industry to scale by taking computations off-chain and minimizing fees and latency. That said, layer-2 networks don’t address the issue of interoperability. Thankfully, layer-3 (L3) networks exist to enable various blockchains and protocols to communicate.
Though the concept of a “layer-3 network” is mainly theoretical, the umbrella term refers to protocols that supplement layer-1 (L1) and layer-2 (L2) networks. In the future, many expect layer-3 networks to play an essential role in connecting the Web3 ecosystem and facilitating the mass adoption of blockchain technology. In addition, the ability of layer-2 networks to reduce congestion and layer-3 networks to facilitate interoperability between protocols enables the interconnectivity the Web3 landscape needs to flourish.’
A lot of content about Web3 presumes the ‘to-market’ consumer/collectible end, almost as if there is no other aspect to blockchain integration.
In this area, most especially, consumers should be more concerned with security, and with keeping highly personalized virtual content safe, which underlies a need to focus on security and decentralization aspects of the blockchain trilemma, not transaction speed or cost.
The main use case for high transaction rates, and super low cost, is mass data being managed at scale, industrially, commercially, and in organisations. Excluding exchange activity, this is usually not of transferable value, and is often ‘soulbound’.
If we are to believe any of the content being created out there, the consumer tradeable area is the one of most concern to ordinary individuals.
The Blockchain Trilemma features the conundrum of the variable features of a Blockchain – Security, Scalability and Decentralization. They are like a 3 sliced pie, making any slice bigger, diminishes the slice of the other two.
The Moralis perspective mentions interoperability and interconnectivity, but fails to highlight any progress in the Security or Decentralization credentials of infrastructure beyond L1 at all.
We’re not specifically ‘Moralis Bashing’ here ; this is a widely held perspective.
I remind myself of a statement by Gracious John, which I extracted from an online post more than a year ago –
… $12.3 BILLION IN LOSSES— THAT’S THE AMOUNT RECORDED DUE TO SMART CONTRACT VULNERABILITIES
Smart Contracts and Bridges should be kept very far away from Web 3 tradeable and collectible retail, in particular when it comes to highly liquid assets like memecoins and fungible tokens for retail-end networks.
But the centralization problem isn’t only about Technical Structure. It is also about ownership. Owners can be incentivized through tokenomics to take an initial share as ‘just’ return for the birth of an ecosystem. But then they should walk away and leave it operate autonomously.
People are greedy. They are prone to want more than they deserve. They are also vulnerable to coercion by criminal elements or heavy handedness from regulatory powers. Autonomous public structures operating with ZKP (Zero Knowledge Proof), mitigate against these challenges.
New coin issuances are getting wiped superfast, and the most recent demise – Mantra OM has shown a spectacular demise, although most recent news is that an OM Buyback & Burn Program is incoming after the wild price dip, ref: owner – J.P. Mullin.
But all that just leads to one issue, if ecosystem autonomy could prevent these insider ‘mishandling’, in the first place, wouldn’t systems be more decentralized and robust?
One of the redeeming aspects of FIAT currencies, is that every nation can have only one of them, and there is only roughly 190 of them there. New slap-together coins/tokens are coming out all the time and there seems no end to the pump and dump.
Perhaps the new discomfort with these ‘disposable’ cryptos will see a resurgence in authentic PoW BTC styled architectures like ERG, HNS and RVN, with their autonomous nature, mining communities, and with lots more appreciation headroom than Bitcoin?
They were expensive and time consuming to make, made fairer division between community and creators, and share an enduring maximum circulation and robust decentralized build structure with Bitcoin, which hasn’t been seen in releases since 2020.
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