We continously research the technology & ecosystem strengths to provide the most accurate, up-to-date information and help you pick a secure base for your project, a great partner to collaborate with or expand to & onboard users; and ultimately become future-proof.
A simplified overview of the blockchain ecosystem
Key Value Proposition
Layer 1 blockchain protocols have to be decentralized, secure & scalable.
L1 blockchains will always be the bottleneck to scaling. L1 protocols need to achieve high throughput and it must be economically viable to run nodes & validators while being sufficiently decentralized and secure to remain credibly neutral infrastructure.
This is called scalability trilemmaand Certik conceptualized a pyramid as scaling does not matter without decentralization which doesn’t matter without a secure blockchain.
Ecosystem Analysis
Today’s leading smart contract blockchains have some technical differences but for most use cases these are not decisive yet.
More important is tooling, ongoing tech development and maintenance, financial and development support, composability with other apps as well as transaction costs.
The (adoption of) innovation in the ecosystem is a key driver until the blockchain network is ready for mass adoption and the lower protocols become hardened protocols with very rare changes.
Picking the right Blockchain
Depending on the use case and your projects’ time horizon, different blockchains (layer 1 or layer 2) may be better suitable for you today.
In the short-term, your project may launch in a cheap environment first or go multi-chain to onboard as many users as possible and provide them the best experience.
In the long-term, you should be part of the best ecosystem. That can be a shared shard with composable DeFi apps or your own chain/rollup for a metaverse game or trading app.
Assessment of blockchains and crypto ecosystems
Fundamentals
We look at a variety of factors to detemine the security, performance, usability and traction of blockchains.
Security: Security practices & controls, validator sets, token distribution, dependencies
Performance: Throughput (tx/s), liveness, finality, ledger growth, hardware requirements & costs
Usability: Dev tooling, explorers, wallets, onramp/offramp, apps, costs of usage, value-add
Traction: Users, Liquidity, Sustainability of economy (Validators, Users, Projects)
Important: Security is weighted heavier than other fundamentals. New chains incorporate tech advancements but need to stand the test of time in the market.
Ecosystem Strength
In order to determine the strength of blockchain ecosystems, we look at key stakeholders & data.
Core contributor: Retention of top people, # top/innovative apps
Stakeholders: Dev companies, governance participants, individual contributors
Financial Support: Funding, investor network & programs, marketcap, liquidity
User: Daily users of apps, sector-specific KPIs
Sentiment: Attractiveness for good projects, growth of contributors, happiness
Important: Frequently update KPIs & use advanced KPIs to analyze traction. In order to find DAU, look at active daily wallets, subtract clusters & cross-check them w/ top app users.
Criteria & Final Scores
New tech may look technically better but it has to prove itself and stand the test of time. Most blockchain tech architecture designs are slowly converging towards the Cosmos vision & the Polkadot model in practice: A truly decentralized settlement layer which enables additional secure block space through offering shared security.
* Projects in the testnet phase or in the process of making the move towards their own l2/app-chain do not yet have a rating.