is the leading smart contract platform and will likely stay at the top for the foreseeable future. At the same time, it’s becoming increasingly obvious that we’re going to live in a multi-chain world where many different ‘layer 1’ blockchains complement each other’s unique capabilities. But which ones are most likely to succeed?
Before we go further, it’s worth mentioning that you’ll notice we’ll talk a lot about validators in this article. Validators may not look like the most interesting topic at first glance, but they are one of the most important aspects of a blockchain. In essence, the nodes (computers) that validate truth on the blockchain control the blockchain. Code can be forked, but a set of decentralized validators can’t.
In addition, we won’t talk about ‘layer 2’ solutions like rollups or sidechains. There are also other layer 1 blockchains in various stages of development we’ve omitted such as Algorand, EOS, Tezos, NEO, Tron. If you’d like to file a complaint with the content department for leaving out your favorite blockchain, send us a furious message on Twitter.
Binance Smart Chain (BSC)
Binance Smart Chain was the first non-Ethereum chain to kickstart the multi-chain wars with an explosive move over the last few months. CZ’s relentless, unstoppable marketing machine and an easy onboarding experience for one of the largest user bases in crypto quickly gave BSC a giant advantage over other Ethereum competitors. Not too surprisingly, the ability to withdraw to BSC from a Binance account and instantly get access to the BSC ecosystem is a pretty large convenience.
So why isn’t everyone moving over to BSC? Well, BSC is basically a clone of Ethereum with a few key differences – the most significant being the smaller validator set. BSC runs on only 21 validators, most of which likely belong to Binance.
While acts of censorship haven’t happened yet, the trade-off BSC makes to achieve lower fees and faster transactions is undoubtedly taking away from its decentralization, which may become an issue over the long term. Even so, BSC is thriving, and with much of the activity on it subsidized by Binance’s war chest, the UX is among the best when it comes to DeFi.
BSC’s success stems from the realization that many users don’t seem to care about decentralization and just want to participate in yield farming. It’s worth noting, though, that users follow developer activity, and developers tend to be more ideologically aligned with the base layers they develop for.
Some of the biggest dapps on BSC are PancakeSwap, Venus, Beefy, and Autofarm. If you’d like to check out more, go to defistation.io for a more comprehensive list or read our article about BSC tools.
Solana promotes itself as one of the most performant blockchains out there. According to its creators, it can process around 50,000 transactions per second (TPS). If you try it out yourself, you’ll realize that it’s, indeed, really fast.
While many unlaunched blockchains throw around similar numbers, Solana is already up and running and proving that its technology is far from vaporware. With such impressive throughput numbers, it shouldn’t come as a surprise then that Solana has pretty high hardware requirements for validators.
The biggest apps on Solana are the Serum DEX, the automated market maker (AMM) Raydium, the Bonfida DEX, an on-chain margin trading platform called Mango, and another AMM called Orca.
The ecosystem is rapidly growing, however, and with the backing of Sam Bankman-Fried and potential future CEX integrations thanks to the connection with FTX, Solana is easily one of the primary Ethereum competitors.
Polkadot’s main value proposition comes from its unique architecture and an already large ecosystem of products, even though the chain hasn’t launched yet.
The architecture of Polkadot is similar to how you would imagine Ethereum once sharding is implemented in ETH 2.0. In short, there’s a ‘main’ chain called a relay chain that other blockchains in the Polkadot ecosystem called parachains connect to. This, in theory, should lead to a lot of scalability and strong security guarantees.
So, what’s a parachain? Unlike Ethereum or Solana, applications can spin up their own app-specific chains with customized parameters. This allows them to do much more than you could potentially ever do on other chains. Good luck trying to change basic parameters of the Ethereum protocol as an application developer.
Polkadot allows developers to create custom blockchains tailored to the specific use cases they are targeting with their product. Since each of these parachains is connected to the relay chain, they inherit the high security guarantees shared by the entire Polkadot ecosystem.
With the impending launch of Polkadot in 2021, we’ll have to see if it lives up to the high expectations.
Cosmos is a decentralized network of independent blockchains. It isn’t necessarily a blockchain, it’s more of a protocol to create blockchains, each powered by a consensus protocol called Tendermint. These different blockchains in the Cosmos ecosystem also have a way to talk to each other through something called the inter-blockchain communication protocol (IBC).
The idea is that the Cosmos ecosystem doesn’t have a shared validator set like basically all others in this article. If someone wants to develop a blockchain based on Cosmos, they’ll need to ensure their chain’s security by spinning up their own validators – it’s not like there’s a main Cosmos chain they can plug into for security. This should allow for added flexibility both for infrastructure projects and the application stack.
Much has already been built using Cosmos, such as the programmable stablecoin platform Terra, Binance Chain (the chain that powers Binance DEX), and cross-chain liquidity protocol THORChain.
In a similar way to Cosmos, Avalanche is also essentially “a platform of platforms”. It’s made up of multiple interoperable networks and uses a unique proof of stake (PoS) consensus mechanism to achieve sub-second transaction times and an estimated 4,500 TPS.
With Avalanche, developers can deploy blockchains that fit their own applications’ needs. They can use existing virtual machines like the Ethereum Virtual Machine (EVM), WASM, or create their custom ones. This just means that similarly to Polkadot or Cosmos, different chains can have functionality specific to the use cases they want to support. They can also set their custom requirements for the validator set.
Avalanche also has a cross-chain bridge with Ethereum, aiming to make it easy for Ethereum projects to come over to Avalanche.
Near Protocol (NEAR)
Near uses proof of stake with a sharded model. The network is split into different segments so that computation can be done in parallel instead of every node having to process every single transaction. Near says that thanks to their design choices, their nodes can still have relatively low hardware requirements, which may increase the decentralization of their ecosystem.
Near aims to be highly scalable and developer-friendly. Development is run by an organization called the Near Collective – they want to make Near more like a community-run cloud platform.
Near also has a bridge with Ethereum called the Rainbow Bridge.
Cardano has been in development for a while and touts itself as a believer in the academic process and a scientific approach. The team behind Cardano has created an abundance of research papers and the proof of stake protocol Ouroboros, however, the blockchain doesn’t support smart contract capability yet, so we’ll have to see how it performs.
If we take a look at valuations, the ADA token is among the highest in market cap from this list, so the market prices in a heavy premium for the possibility of Cardano becoming one of the top smart contract platforms in the future.