Ethereum is congested, is there an opportunity for other public chains?

As Ethereum is moving towards 2.0, the explosive growth of DeFi in the summer has caused the Gas fee on the platform to skyrocket. If there are some scalable public chain platforms that can surpass Ethereum, then now is the best time. Despite all the talk about the "Ethereum killer", none of those platforms were as successful.

Why is this so? Most people think it is the first-mover advantage and network effect of Ethereum. Other platforms believe that they are still in the early days and have not yet entered the zero-sum game state. Highly anticipated protocols like Polkadot and Dfinity have either just launched or are about to launch mainnet, so there is still a lot of "game" to be played before we declare any "winners". This "game" is important because it sets the stage for mass adoption of our decentralized future.

If Ethereum is leading, by how much? The purpose of this post is to use a quantitative model to weigh and score Layer 1 smart contract platforms by different "usage" dimensions. In terms of usage, I looked at the following aspects.

Dapp activity (50% weight) - the total number of Dapps, the number of daily active-zce users and the number of contracts, and the current usage is displayed through the interaction of end users.

The locked-up volume of Optimism on the Ethereum L2 network is 974 million US dollars: Jinse Finance reported that L2BEAT data shows that as of June 5, the total locked-up volume on Ethereum Layer 2 was 5.06 billion US dollars. Among them, Arbitrum, the expansion plan, has the highest amount of locked positions, which is about 2.47 billion US dollars, accounting for 48.89%. Followed by Optimism, the lock-up volume is 974 million US dollars, accounting for 19.22%. dYdX ranked third, with a lock-up volume of USD 964 million, accounting for 19.02%. [2022/6/5 4:02:45]

Developer Activity (25% weighting) – Indicates potential future use as the space is still new.

Transactions (15% weighting) -- Shows raw usage by 24-hour transaction activity.

Market capitalization (10% weight) -- shows interest based on native token demand

If you are interested in scoring methods, they are listed below. Each platform was awarded an index score from 0 to 100. To reach 100, the platform needs to have the highest score in each dimension. Below are the scoring results.

Data: The Ethereum network has currently destroyed 1.038 million ETH: Jinse Finance reported that according to Ultrasound data, up to now, the Ethereum network has destroyed a total of 1,038,593.43 ETH. Among them, OpenSea destroyed 113116.78 ETH, ETHtransfers destroyed 101224.84 ETH, and UniswapV2 destroyed 96445.42 ETH.

Note: Since EIP-1559 was introduced in the upgrade of Ethereum London, the Ethereum network will dynamically adjust the BaseFee of each transaction according to the transaction demand and block size, and this part of the fee will be directly burned and destroyed. [2021/11/28 12:37:13]

Not surprisingly, Ethereum is number one

While it’s no surprise that Ethereum is in the lead, it’s by how much. The protocol’s years of first-mover advantage and network efficiency have allowed it to build an impressive lead, scoring more than double that of second-place platform EOS. This tells me that Ethereum needs a lot of time to be surpassed, so that it can be given enough time to launch Ethereum 2.0.

Where are some of the other competitors?

Although Polkadot, Cosmos, and Solana are not in the list, I included them in my analysis because it is too early to rate them. As much as I've looked around, I can't find any solid information on the number of dapps, daily active-zce dapp users, and number of contracts. If I use the median scores for these dimensions, Polkadot, Solana, and Cosmos rank 4th, 5th, and 6th in a row.

There are 208,435 unconfirmed transactions on Ethereum: Golden Finance News, according to OKLink data, there are 208,435 unconfirmed transactions on Ethereum, the current network computing power is 680.40TH/s, the network difficulty is 9.13P, and the current currency holding address is 63,891,608 , a year-on-year increase of 95,185, the 24h on-chain transaction volume is 1,578,416ETH, and the current average block time is 13s. [2021/10/1 17:18:48]

Cardano

Cardano launched the Shelley mainnet in the summer, and they won’t be able to run smart contracts until Goguen launches later this year. They have very few transactions running on their mainnet and 0 Dapp activity, so how come they are ranked 3rd on the list? Because I gave developer activity a 25% weight, and Cardano has the highest activity in this category, the platform scores as high as all platforms, vying for a far-flung third place overall.

Klaytn

Most people think of Ethereum, EOS, and then TRON as the leading protocols for Dapps. But who is Klaytn, and how can this platform have the same score as the better-known TRON? First of all, the two platforms have the same score of 15, which is nearly 6 times lower than that of Ethereum. But Klaytn has a huge number of daily active-zce Dapp users (22,300), which is very close to Ethereum. Klaytn is a platform created by South Korean company Kakao, which runs a large number of chat applications and cryptocurrency exchange applications on this protocol.

Data: The number of Ethereum held by miners has increased by 15,000 in the past two weeks: According to Santiment monitoring data, in the past two weeks, the balance of Ethereum held by Ethereum miners has increased by 15,000. Meanwhile, the number of addresses holding between 100,000 and 1 million ETH has surged nearly 5 percent since the beginning of the month. (Crypto Potato)[2020/6/22]

Dapp activities (50% weight)

Views on Dapp activity

In my opinion, Dapp activity is the most important indicator, which is why I give it 50% weight (25% for the number of Dapps, 15% for daily active-zce users, and 10% for the number of contracts).

Ethereum has an absolute lead in the total number of Dapps activities, and the weighted score is about 2.5 times that of the second place EOS.

The number of daily active-zce users of each App of EOS is very high, indicating high user stickiness.

Dapp liveness metrics are hard to come by - most info comes from Stateofthedapps and Dappradar. However, out of the roughly 29 protocols I analyzed, I could only find reliable Dapp information for 11 of them.

Dynamics | Top Dapp rankings on Ethereum: ForkDelta ranks first: According to DappRadar data, currently the most popular Dapp on the Ethereum blockchain is ForkDelta, an "exchange class", followed closely by IDEX of the same category. Fomo3D in the "guessing category" jumped to third place; CryptoKitties, which was previously popular, ranked fifth, and Augur, which was newly launched on the mainnet, ranked sixth. [2018/7/11]

As we get more reliable Dapp metrics on emerging platforms like Cosmos, Polkadot, Cardano, and Solana, they will obviously rise with higher index scores.

Developer activity (25% weight)

The activity of developers in September 2020 according to the statistics of Santiment

Perception of developer activity

I give dev activity second only weight to dapp activity (25%) because it is a good leading indicator of future platform usage in a race that is still in its early stages.

Interestingly, Cardano has the most developer activity, considering it went live in the summer and doesn’t have the high profile of projects like Dfinity, Polkadot, and Cosmos.

The top five are well-known protocols that have only recently launched. It will be interesting to see if these platforms displace competitors such as TRON, EOS, and Klayton in the top 5 rankings.

Number of transactions (15% weight)

20-hour trading volume on September 29, 2020

Opinions about transaction volume

In general, I'm not a big fan of this metric, as the number of transactions is affected by block time, and while it's a good metric, it's often not very directly comparable, so I'll only give it 15% Weights.

Most of the data comes from Blocktivity.info. Since they didn't have data for all the protocols I needed to evaluate, I supplemented it with information from the Coin metrics community API.

While Blocktivity's emphasis is on Operations, I'm sticking with transaction count because that's the only metric tracked by Coinmetrics and I need to compare across different data sources.

Market Cap (10% Weight)

View on Market Cap

While I don't think market capitalization correlates much with platform activity, it does indicate interest in the platform with native token demand. That's why I only give it 10% weight.

Although they only recently launched their mainnet, Polkadot has the second-highest market capitalization after Ethereum, which bodes well for potential future growth.

Similar to Cardano; it launched in the summer and doesn't have any live Dapps that I know of, but their token price makes it the third highest market capitalization protocol.

As with any model, there will be some degree of subjectivity in terms of weights. My model puts more emphasis on the amount of Dapp activity on the protocol, because in my opinion a smart contract platform needs to demonstrate that the community cares about its general computing power. If they just want to transfer Token, there are many Layer 1 protocols that only focus on this.

Let's take a look at each dimension and its respective weight.

My Model's Design and Data Source

I looked at 29 different protocols - here's a link to my full scoring spreadsheet if you care about all the details.

https://1drv.ms/x/s!AvTKSsyaojbohn8DdnDwBhGdeQvW?e=LPw5yo

Chad Hahn Author

Translated by Li Hanbo

Olivia Editor

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