Last week I wrote about my expectations regarding the relationships between smart contract platforms as Ethereum (ETH), Cardano (ADA) on Solana (SOL). Then I wrote that working together in the form of interoperability would be a more logical development than a battlefield between different projects. Despite the fact that these platforms have more or less the same goal, there are a number of major differences that cannot simply be ignored. In Timo’s take this week, I look at one of these factors.
Compete but don’t wipe out
But first I will mention some interesting statements from Solana founder Anatoly Yakovenko that fit nicely with my column from last week. This week he spoke in an interview about the competition between the different networks. He himself stated that his Solana is by no means an “Ethereum killer”, a label that many people (including myself) are only too happy to print on smaller altcoins every now and then.
The various crypto projects involve large groups of developers and other individuals who have a bigger vision for the future of crypto and the world. While the networks are technologically different from each other, they are “extremely resilient to anyone — or things — they try to kill.” According to the founder.
“Many people are passionate about both approaches [Ethereum en Solana] and are fine with competing. It just makes us both better.”
Ultimately, it will be the users who determine which networks work best for them. And as I said, I don’t believe there is one winner takes it all situation will be. Yet there are aspects that we cannot ignore when we compare the networks with each other. One was nicely exposed this week by Messari researcher Ryan Watkins.
Credibility and neutrality
Blockchain is largely about decentralization and neutrality. That these are extremely important factors is apparent from the fact that the inventor(s) of Bitcoin, Satoshi Nakamoto, is/are unknown. As a result, Bitcoin’s origin has no point of contact and so Bitcoin in principle belongs to no one and everyone at the same time.
There are some striking differences with smart contract platforms when it comes to decentralization and neutrality. These platforms loved token sales to realize the launch of the network through, for example initial coin offerings (ICO). But the distribution of these tokens differs from project to project. Watkins showed this tweet this week:
As the smart contract wars heat up, its important to keep in mind power and wealth distribution on each blockchain.
Initial token distribution may not be everything, but eventually we may find these early decisions had lasting effects on the credible neutrality of these systems. pic.twitter.com/ii3W6yOp52
— Ryan Watkins (@RyanWatkins_) August 31, 2021
Blue marks the percentage of tokens sold during public sale rounds, rounds that anyone could participate in. Red is the percentage of tokens intended for insiders (persons within a project). We see some networks with a nice big blue area, which means that the vast majority of the tokens in these networks have been sold during public rounds. A good sign in view of decentralization and neutrality.
Networks such as Solana, Binance Chain, Flow and Terra, on the other hand, have large red areas. Insiders have their hands on a large part of the tokens here. Of course, these distributions don’t say everything. However, it is something to keep in mind as we seem to be entering a period in which these networks will start to compete more strongly with each other.
Insiders are those who work on the project or contribute in some other way. It is therefore in their interest that the network develops properly. And those with the most value in their hands have a measure of power. Moreover, one can often vote with the tokens on developments within networks. Is this a factor that could have a major impact on the future of the various smart contract platforms? The real crypto and blockchain those hards will say yes.
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