The Multi-Chain Future
Different communities that form around blockchain projects view other projects in the crypto space primarily through the lens of competition and one-shot-winner-takes-all games. This is good because it drives innovation. However, it is shortsighted. In the long-term, the wider crypto ecosystem will thrive by experimentation, diversity and synergies. Hence, I argue that the future is multi- rather than single chain and should be viewed as a repeated, cooperative game. A multi-chain future with monetary value and trustless data flowing freely and inter-chain, would be more adaptable to changing conditions in the environment, more scalable, more resilient and naturally synergies would emerge. Let’s go through it one by one.
The whole is more adaptable. The decentralized instantiation of blockchain networks precedes test nets and waterfall-like phase gates. Design choices like Proof-of-Work, Proof-of-Stake or Proof-of-Space-Time consensus are fundamental and can’t be easily changed after mainnet instantiation. This means that a single-chain future inhibits experimentation. In a multi-chain world, however, each blockchain can be its own one-shot experiment competing in a multivariate selection process driven by market forces.
The whole is more scalable, because in a multi-chain world, the chains balance traffic between one another. You have similar chains specializing for the same use case/target audience. Vega and Serum on Solana both provide decentralized fast derivatives markets. If one of them reaches its maximum throughput of transactions or orderbook size the unsatisfied demand would shift to the under-utilized competitor.
The whole is more resilient, because a single-chain is ironically a central point of failure which is vulnerable to e.g. hacks (flaws in the low-level runtime or consensus implementation), decreasing adoption (aging language e.g. Solidity), and miner/validator support (mining, staking becomes unprofitable). Here a competitor chain could easily step in as a fallback. Analog to having a risk-spread basket on different (e.g. collateralized, synthetic) stable coins on one chain, one could easily imagine utilizing different chains (with their own unique securities characteristics) to de-risk chain-wide failures.
And most importantly, synergies will emerge. Different chains, each with their unique characteristics can work together to build something that wouldn’t be possible alone. Bitcoin is the reserve crypto currency. It has by far the most proof-of-work securing it as well as the longest track record of operation as a crypto currency. In it’s wrapped form it has been used on automated market makers, as collateral for stablecoins or loans. It's even possible to take a leveraged position on bitcoin without touching a centralized exchange, have a look at Sovryn. This wouldn't have been possible two years ago.
I hope that I could convince you with these brief examples. They are just the tip of the iceberg. With this article, I’d like to encourage a view that embraces diversity within groups and shared commonalities among groups alike. A view that helps us better understand shared values and visions and to have mutual respect and cooperate with one another.