Bitcoin has a brand name and world-wide recognition. The Bitcoin image is continually growing larger, and it’s known to almost everyone in the financial industry, whether they support it or not. But, in its simplest form, Bitcoin is just a dApp or decentralized application. The primary purpose of Bitcoin as a decentralized application is to store and transfer value. Essentially, Bitcoin is the dApp equivalent to digital gold. And digital gold is just the first of many new decentralized applications. As dApps grow and become more complex, the most successful networks will have millions of daily active users and process millions of transactions per day. Protocol layer chains like Ethereum cannot handle dApps with this many users or transactions without a 2nd layer scaling solution.
The Future of Ethereum
It’s not enough to have a faster blockchain and cheaper transactions if you don’t have capital, liquidity, traders, DeFi apps and users. There are faster smart-contract platforms than Ethereum, but their capital is insignificant compared to ETH. The majority of blockchain users focus mostly on ETH because it has the capital and liquidity possible for elevated DeFi applications.
Ethereum is expensive, but people pay the fees because it’s where the greatest financial opportunity currently lies. Ethereum is growing exponentially because there are so many projects building on top of this platform. While ETH is the largest smart-contract marketplace, it still lacks interoperability - the ability to exchange information between different ecosystems.
The faster blockchains are lagging because most crypto users store their capital on Ethereum. Many ETH users deem it risky to move their capital to younger, smaller market-cap blockchains. This doesn’t bode well for the holistic progress of smart contract platforms. In its current form, Ethereum is not designed to support millions of daily active users. But millions of users and transactions per day is exactly where blockchain is headed.
In order to solve these problems, users need cross chain bridges between blockchains. While other platforms need ETH’s capital and liquidity, ETH needs faster transactions and lower fees. The win-win solution is bridging every chain together and creating a multi-chain future. Thus, a middleware layer called DAPP Network has emerged to solve this problem.
DAPP Network & DSPs
For those not familiar with the LiquidApps team, they’re building DAPP Network as a middleware suite of developer tools. This middleware allows dApp service providers or DSPs to offer their services across any blockchain. As mentioned earlier, Ethereum has the most capital and accessibility of any base layer blockchain. The growth in DeFi, however, boosted the urgency for Ethereum to solve its scaling challenges. The future dApp user will not tolerate high transaction fees or long waiting periods between transactions.
While other base layer protocols might process faster transactions with lower fees, Ethereum still maintains the majority of capital and liquidity, top brand name-recognition, and easiest account creation or token access. When ETH developers build their own DSPs on the DAPP Network, they’re able to combine the best features of ETH with the best of other blockchains as well. These developers are no longer restricted to building a product for one base layer protocol or lone blockchain. Instead, they’re building out services and dApps across all blockchains.
Updated EdgeDSP Model:
Bitcoin miners validate its network transactions while proof-of-stake chains use elected or appointed validators. But these miners and validators are required to have the proper infrastructure and tech savvy to run a full node on their respective chains.
The LiquidApps new EdgeDSP technology slashes the barrier to become a validator on the DAPP Network. If you can access a web browser, you can run an EdgeDSP. Since EdgeDSP is based on WASM technology, which runs in every major browser, this feature is blockchain agnostic. It allows users to connect with single or various chains of their choice seamlessly.
LiquidApps technology is far more than just a 2nd layer solution. DAPP Network is on track to become the glue between chains. This middleware is really a suite of services for developers to build upon and expand their applications. The DAPP Network connects every developer and application over the vast majority of smart contract platforms. Teams implementing a multi-chain bridge through DAPP Network are laying the groundwork for the next great wave of decentralized applications and smart contracts.
Bancor <> DAPP Network <> Polkadot:
Polkadot is one such project that will need bridges to work efficiently. The Bancor team, recognizing both the potential of Polkadot and the future interoperability requirements, recently announced they’re using LiquidApps to build a cross-chain bridge to Polkadot. The bridge will enable cross-chain swaps between ERC-20 and DOT tokens.
Bancor’s cross-chain bridge is the first step to enabling true decentralization across multiple blockchains. Other notable teams, like YUPIO and Dapp Account DAO, are also currently building their own bridges using the DAPP Network.
"the creation of this ETH<>DOT bridge will be the first step towards making Bancor a multi-chain liquidity protocol. This will be the foundation for the development of both Bancor and Polkadot in the future." - dotmarketcap.com
The DAPP Network could potentially become the foundation for development on both Bancor and Polkadot. This bridge will allow developers to expand from building on one chain. The technological limitations and centralized issues met while building on a single protocol layer ultimately hinders the potential for decentralized applications.
The Implications of Lightweight Middleware:
The power of EdgeDSP will allow transfers of stablecoins and wrapped Bitcoin (wBTC) from one chain to another. These tokens could be swapped across chains and utilized on various DeFi applications stretching over ETH, DOT, EOS and other emerging smart contract platforms.
The implications of anyone with a web browser running a validator are endless. Projects using the DAPP Network could now stake to a multitude of DSPs, further decentralizing their services. DAPP Network’s EdgeDSP technology ensures decentralized exchanges avoid protocol layer barriers while offering cross-chain, peer-to-peer swaps.
Until now, there’s always been a slight barrier to running a DSP across multiple blockchains because developers still needed to run a full node on each respective chain. When using the EdgeDSP technology, however, neither the DSP nor their users would need to run a full node on those separate chains. For the first time, developers could allow their EdgeDSP to provide oracle services to any other protocol without the infrastructure headache or excess cost related to operating nodes on each base layer.
The Future of Bitcoin and Blockchain:
Bitcoin has caught the attention of the world, but it’s not where blockchain ends. We’re still in the early stages of smart-contract development. The holistic goal of blockchain is enabling peer-to-peer, decentralized transactions and applications. In the near future, developers will not be restricted to building on one blockchain. They will also have the ability to migrate their projects to other smart-contract platforms. The next step, beyond Bitcoin, is bridging every base-layer together and creating a multi-chain future.
This article was prepared and accomplished by Wes Carmichael in his personal capacity. The opinions expressed here are my own and do not reflect the views or opinions of LiquidApps.
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