Public chain success model: Who will be the next winner?
By: Frank Sun
Tags: Ethereum, Binance Smart Chain, Bnb

Through numerous studies, individuals have summarized a public chain success model. The success of a public chain requires four elements: “positioning”, “technology”, “ecology” and “user”.

First good positioning is half the success. Technological innovation, ecological development and user growth are the core elements of success

The sound development of an enterprise requires a good competitive strategy. For the currency circle where public chain competition is so fierce today, a good public chain development also requires a strategy. There are many schools of strategy, the most important of which is the positioning school. The positioning theory believes that the most important thing in the development process of an enterprise is to find out the positioning. Positioning is the top priority of the company. Positioning is your value proposition and determines what the company does. , Do nothing, use limited resources in the core direction, positioning determines the core value, the same is true for digital currency.

Taking the field of digital currency as an example, from the perspective of the entire blockchain, there are only two most successful public chains, one is Bitcoin BTC and the other is Ethereum ETH. Their value positioning is clear, and Bitcoin’s positioning is very clear. Clear, one sentence can be summed up: “a point-to-point electronic cash system”. The value proposition of Ethereum is a “decentralized smart contract system.” Bitcoin and Ethereum are pioneers in their respective fields, and the value proposition and positioning are very clear, and it is easier to spread among users.

Although Bitcoin and Ethereum occupy the leading positions in their respective fields due to their first-mover advantages, latecomers have also achieved good results by positioning. For example, Litecoin, which has always been in the top ten in the currency circle by market value, has a lot of projects to copy and modify the Bitcoin code, and most of them are no longer visible. Why does Litecoin still have such a high status today? The core is “Bitcoin”. “Gold, Lite Silver” positioning, Litecoin’s positioning is very smart, and it did not scream “Beyond Bitcoin” slogan, but with a low profile to rub the traffic of Bitcoin, after all, if Bitcoin If the big brother succeeds, Litecoin can have soup. If Bitcoin fails, the foundation of the currency circle will be lost, and Litecoin will have no room for survival. The Litecoin team has great wisdom in this regard.

The other two are relatively successful in positioning, one is China’s NEO and the other is Japan’s ADA. These two coins are particularly popular in the West, especially NEO, which rose from 1 yuan to 1,000 yuan during the 2017 bull market. Very important reason. NEO’s positioning is China’s Ethereum, ADA’s positioning is Japan’s Ethereum. Many new leeks don’t know neo and ada, but they know eth, compare the price difference, and naturally buy the cheaper one. Ethereum is now.

In addition to accurate positioning, the success of the public chain also requires technological innovation, ecological prosperity and a large number of users. The success of Ethereum is definitely not only based on positioning, continuous technological innovation, growing ecology and millions of users, there is no second public chain that can compare. From 2017 to the present, the old coins will find that many public chains that claimed to be better than Ethereum or surpassed Ethereum, many of them were silent. Some are technically difficult and cannot be done; some are lack of funds and the team is separated; others are developed, but the ecology is not established, lack of ecological projects and traffic users, and become an unused person with a weak sense of existence or self-entertainment The main reason for the lack of ecological projects and flow in the public chain of China is the insufficient funds of the foundation and insufficient funds to support ecological projects.

Second: According to model predictions, the next successful public chain is: Binance Smart Chain (BSC）

Binance should have the most thoughts about decentralization and the earliest layout among many exchanges. The dex deployed in 2018 has been launched in 2019. This year, we will accelerate the deployment of another public chain BSC. CZ has expressed in public channels more than once that in the future, digital asset transactions should be decentralized, and most centralized exchanges will disappear. However, as 99.99% of traditional legal currency assets have not yet been chained, centralized transactions are required. Make a converter, but the centralized exchange is temporary and phased, and it will eventually be revolutionized by decentralized defi. Therefore, instead of being revolutionized by others, it is better to self-revolution and rebirth. BSC is the core of Binance’s self-revolution.

So, what is the value proposition of returning to Binance Smart Chain? Is it beyond Ethereum? No, things that surpass Ethereum are left to TRON TRX and EOS (it seems that projects that surpass Bitcoin and Ethereum are currently not doing well). Changpeng Zhao, the founder of Binance, expressed on Twitter that BSC is not a direct competitor of Ethereum, but aims to be compatible with Ethereum and provide smart contract creators with more choices through cheaper gas fees.

According to my understanding, one sentence summarizes the positioning of Binance Smart Chain: “The super assistant of Ethereum”!

How to understand that, Ethereum is undoubtedly the most successful public chain at present, and it is also the project with the largest number of ecological projects and users. This year, due to the rise of defi, 99% of defi exists in the Ethereum ecosystem, and Ethereum has been seriously overloaded. , Causing the cost of using Ethereum to rise sharply. At the beginning of the year, the cost of using Ethereum to transfer money was only a dozen cents. Now it costs a few dollars or even dozens of dollars, which ordinary small retail investors can’t afford (*).

For example, Ethereum is like a one-lane highway with inter-provincial fees, which can only be passed on a fee. Those who pay more go first, and those who give less leave later. Because there are too many cars and there are not enough roads, the road use rights can only be obtained by paying a higher fee. How to solve it? Requires Ethereum for infrastructure upgrades. In fact, in the Ethereum white paper, there are plans for the upgrade of Ethereum. According to the plan, it can be upgraded from POW to POS in 2022, achieving 1024 shards. If it can be realized, it is expected to increase the speed by 1000 times, which means this The road will expand to 1,000 lanes, of course this is theoretical. For Ethereum, the technical difficulty of upgrading is much higher than that of directly building a new chain. It is conceivable that a highway needs to be upgraded with full load on it, and the use of the road must not be affected during the transformation process, which is much more difficult than rebuilding the chain. Therefore, the progress of Ethereum’s upgrade is not as expected. According to the latest progress of Ethereum, it is estimated that 64 shards will be used by the end of 2021, not the 1,000 planned.

Binance Smart Chain (hereinafter referred to as BSC) is equivalent to a high-speed 1.5 version of Ethereum that has been transformed. It replicates Ethereum using dpos consensus. Dpos is a highly efficient consensus mechanism with fast speed and low cost. It is fully compatible with Ethereum virtual Machine EVM, development environment is also similar, Ethereum projects can be easily transferred to Binance Smart Chain. Tokens on Ethereum can be directly mapped to the Binance Smart Chain through cross-chain technology. Currently, BSC can already see the mapping of mainstream value tokens on Ethereum, such as ETH, Link, UNI, DAI, and USDT.

BSC is like building a 20-lane expressway next to the road that is being renovated in Ethereum. When Ethereum is congested, you can switch to BSC. The highway toll is lower. You can switch back from BSC as needed. , To a certain extent alleviate the congestion of the Ethereum main network. Therefore, BSC is more like a supporter and backup of ETH, or a super assistant, not a direct competitive relationship. The development of Ethereum also requires a BTC backup like LTC. From the perspective of positioning, I think the positioning of BSC is reasonable and strategic.

Binance Smart Chain BSC is technically closely following Ethereum and cannot be surpassed, but it can just follow. But as a new entrant to the public chain, BSC’s biggest advantage is ecology and users. In terms of users, Binance is already the world’s largest digital currency spot and derivatives exchange, with tens of millions of users. These users may be potential users of BSC. If they can convert 30%, they have already surpassed many companies. Chain up. In addition, Binance is very rich and is willing to spend money on BSC as an ecosystem. Binance has established a special fund of 100 million US dollars to support ecological projects on BSC. Besides, Binance has money to support ecological projects. Ann can also support the BSC project through its own exchange listing channel. BSC’s early projects such as cake, burger, xvs, alpha, inj, bake, etc. have successfully launched the Binance innovation section. This is also not available in the general public chain. Looking at Binance’s current posture, there will be second and third phases of support funds. You must know that even for eos, which has raised billions of dollars, there is no such effort to invest and support ecological projects. After all, Binance has an exchange that continues to place golden eggs, and it can continue to subsidize BSC until the BSC ecosystem can flourish internally.

Looking back at Binance’s development from 0 to 1 to become the world’s largest exchange, bnb rose from the initial $0.15 (2017) to a maximum of $38 (2019); when Binance once again transformed like a decentralized public chain , Will BNB have the same bright return expectation? No one knows, but it’s worth the bet.

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