Fat Hub: Why aren't we Hub minimalists

Fat Hubs: Why We're Not Hub Minimalists  

Author: Liu Yi, founder of Octopus Network

The most notable changes in the blockchain world since 2020 are: Ethereum's scalability constraints have made it too difficult for it to maintain a dominant position, and new public chains and Layer2 networks have been springing up, some of which have gained significant use and are carrying huge amounts of crypto assets, and a growing belief that The future of the Blockchain world is not One Chain Fit All, but an Internet of blockchains.

When it comes to the blockchain Internet, the contributions of Cosmos and its founders cannot be ignored. In 2015, Jae Kwon and his collaborators created Tendermint, a POS-based BFT consensus protocol that allows anyone to quickly create blockchains. They had already seen that as a number of purpose-built blockchains sprang up, they would connect into networks that would support the free flow of assets and data, creating a decentralized next-generation Internet (Web3.0) infrastructure.

In Cosmos's Blockchain Internet blueprint, there is a special class of blockchains that function as interoperable hubs (conventionally called cross-chain hubs) to connect as many blockchains as possible, hence the name Hub. Cosmos Hub is the first such blockchain and IRIS Hub is the second. As opposed to hubs, blockchains for other purposes are called zones.

Cosmos's designers borrowed its design from the Internet architectureThe end-to-end principleMany functions of the network, such as encryption, compression, verification, reply, retransmission, etc., require the knowledge and assistance of the application system at the edge of the network. Therefore, it is meaningless to implement them in the communication network.

The end-to-end principle blockchain version of the Internet is called hub minimalism and is the design philosophy of Comos network architecture. That is, Hub functions should be as little as possible, which brings three benefits: first, Hub code simplification, higher security and reliability; Second, Hub can use the limited transaction processing capacity (TPS) exclusively to deal with cross-chain transactions to achieve efficient and low-cost cross-chain; The third is to avoid overlapping functions of Hub and Zone. As Hub is the core of ecology, competition between Hub and Zone is bound to inhibit innovation of Zone.

In 2020, it was proposed that the AMM DEX should be deployed on Cosmos Hub as a base DeFi service for the entire ecosystem. The proposal is a clear violation of hub minimalism and has sparked heated debate. The upshot of the argument is that pragmatism prevails. After a year of development and testing, Gravity DEX will be available in mid-2021. The Cosmos community, however, has not given up on hub minimalism and considers Gravity DEX a special case. But the question is: So why does Gravity DEX exist? Perhaps the more general question is: Does hub minimalism have boundaries?

Looking at the interconnected topology of the real blockchain world, it's easy to see that Ethereum is at the hub of a hub-and-spoke network, bridged with all the important blockchains. For every public chain, layer2, or purpose-specific blockchain, the first requirement for cross-chain interoperability is to connect to ethereum. The motivation for all blockchains to connect to Ethereum is not because ethereum is the most "lean", but precisely because ethereum is the most "fat", accommodating the most application-layer protocols, the most crypto assets, and the most users. Ethereum has become the "de facto hub" of the blockchain Internet, and the fattest.

Polkadot has long been known as the cross-chain duo with Cosmos. While not using the same terminology, Polkadot also embraces hub minimalism. Polkadot Relay, as the hub, has no application layer services and cannot deploy smart contracts. Moreover, Polkadot is trying to move basic functions beyond shared security, including DOT issuance and on-chain governance, to a "system parallel chain" that is more radical than the simplicity of Cosmos Hub.

The minimalist Polkadot Relay means that decentralized applications, including DeFi, can only be hosted by parallel chains. The DeFi ecology of Polkadot relies on composability between parallel chains. However, there are two obstacles to interoperability between parallel chains. First, the launch date of XCMP, a cross-chain protocol in Polkadot network, is uncertain. Without XCMP, parallel chains are effectively isolated chains that can neither interoperate with other parallel chains nor interact with other public chains such as Ethereum via a common cross-chain bridge.

The second is the uncertainty caused by slot auction mechanism. When considering the protocol combination between source parallel chain and target parallel chain, the following factors need to be considered: How long is the current slot lease of target parallel chain? Can you win the auction again before it expires? Once the other party cannot renew successfully, the parallel chain is degraded to parallel thread, and its activity will be greatly reduced, which is likely to cause the failure of protocol combination.

Octopus network is the third notable multi-chain network protocol after Cosmos and Polkadot. It is designed to safely and efficiently launch and run a large number of Web3.0 applications in the form of standalone blockchains, called application chains. The core difference between the three multi-chain network protocols is the way the sub-chain (Zone/Parachain/Appchain) obtains security. In the Cosmos network, Zone is an independent Tendermint consensus blockchain, secured by its own PoS. Polkadot is a heterogeneous shard blockchain. Parallel chains are not independent consensus blockchains, but shards, with the same level of security guaranteed by the relay chain.

The octopus network's application chain is a separate consensus blockchain similar to Cosmos Zone, but PoS for all application chains are delegated to the Octopus Relay, using the octopus network's native token OCT as exclusive collateral. The application chain can determine its own security level by adjusting the amount of block reward provided to the verification node mortgoring OCT. The cross-chain hub of the octopus network is not a single layer1 public chain, but a set of smart contracts running on the Near Protocol. Before we dive into Octopus Network design logic, we need to talk about DeFi's relationship to non-financial Web3.0 applications.

Every Web3.0 application is a decentralized marketplace protocol mediated by cryptographic tokens. A variety of participants including protocol developers, investors, verifiers (miners), service providers and community advocates contribute to the establishment and prosperity of the market and receive token rewards. Crypto tokens need to be in the crypto asset market in order to have a price and complete the capital formation and reinvestment process. For example, by selling encrypted tokens, the verifier obtains fiat currency and pays the IT cost and labor cost of the verification node. Therefore, the development of Web3.0 applications depends on DeFi support.

The core advantage of application chain is to focus on specific application scenarios to achieve optimal user experience. It cannot and should not try to build its own DeFi protocol ecosystem. Instead, it should use existing, content-rich, rapidly innovating DeFi facilities with good liquidity. It is as if factories, playgrounds or animal farms do not set up their own financial markets, but instead issue stocks and bonds in existing markets.

The octopus network's underlying protocol can be seen as an incubator for decentralization. Every once in a while, Octopus Network will launch the app chain with the most community support and support the app chain for Skyward IDO. In order to help the application chain project to obtain more funds, and to establish economic ties with the application chain community, octopus network will directly to the application chain IDO investors air OCT tokens. The first 10 application chains received 200,000 OCT airdrops each, and the 11th to 100 application chains OS-IDO received 100,000 OCT airdrops each. After The closing of Skyward IDO, the Application Chain project will set up a trading pool in Ref.Finance and inject initial liquidity and provide incentives to liquidity providers as needed.

It can be seen that all octopus web application chains form a close symbiotic relationship with DeFi on the NEAR blockchain from day one. Moreover, in an octopus network, the interoperability requirements between the application chain and the DeFi protocol of the NEAR platform are much more important than the interoperability between the application chains. Over the past few months, there have been several notable IDO launches on the Skyward platform. The number of participants in Ref. Finance IDO is close to 2,000, Octopus Network's IDO is close to 4,000, and the recent Paras IDO has more than 4,000 participants. This does not mean that Paras is more valuable than Octopus or That Octopus is more valuable than Ref.Finance. Instead, every valuable recognized IDO is expanding Skyward's user base and helping the subsequent agreements to complete more successful IDO.

The TVL of the OCT trading pool at Ref reached $7 million. Imagine Octopus Network connecting hundreds of application chains in the future, generating thousands of FT and millions of NFT, all of which will go into the DeF protocols of Ref. Finance and other NEAR platforms, either for trading or as collateral. The essence of an ecosystem is that the development of a part will promote the prosperity of the whole.

Vitalik said at this year's EthCC conferenceThe Ethereum ecosystem cannot always create tokens, its function is to trade other tokens. The role of the financial system is to allocate capital efficiently for social production. If capital cannot flow into the productive sector to create utility, the financial system will have little use but to export bubbles. App chains are decentralized, production-oriented digital economies. Their relationship to DeFi is like the relationship between the real economy and the financial system. On the NEAR platform, coordinated by the Ocotpus Network, DeFi and non-financial Web3.0 applications will have unprecedented positive interactions.

There is only one Internet in the world. Even after decades of development, the meaning of the Internet is still changing rapidly. Induction usually does not work well for such singleton objects. The end-to-end principle is not a priori principle of the Internet, but should be seen as a reflection on the architecture of the Internet. As stated in the classic 1981 paper "End-to-end Principles in System Design" : "The principles discussed in this paper regarding the placement of functions have been used for many years, but have not always been clearly understood or defined." And the customary translation of the "end-to-end principle" is problematic. It's not really a principle, it's an argument, and there are plenty of themcounter-examplesandreflection.

The so-called "blockchain Internet" is more of a metaphor than a definition. This metaphor helps many people create an intuitive impression of a multi-linked network. But the claim that a blockchain Internet is the Internet, or that a multi-chain network is a communication network, is not reliable. Without a deductive basis, the application of hub minimalism to multi-linked networks is not a logical inference, but merely a comparison.

More and more people in the crypto community, includingCosmos researchers.Compare encrypted networks to cities. The shape of a successful metropolis is not the result of top-down design, but the product of historical evolution. Places with convenient transportation and abundant water gradually developed bazaars, evolved into commercial center cities, and eventually a few commercial center cities developed into financial centers, serving vast regions and numerous industries. In the real world, all financial centers are transportation centers, and all transportation centers are business centers.

In order for the new public chain to occupy a place in the future blockchain Internet, the key is to develop into a financial center, gathering a large number of DeFi protocol and crypto assets. The hubs that gathered the most resource support and community consensus among the Cosmos and Polkadot multi-linked networks, Cosmos Hub and Polkadot Relay, gave up their prospects of becoming financial hubs, Only ecological projects such as Terra, Osmosis, Acala, Moonbeam and Astar can do this.

NEAR Protocol provides a near-Web 2.0 user experience with a solid decentralized foundation. It is gathering the resources and consensus of the entire ecosystem to rapidly emerge as the financial center of the blockchain world. Given NEAR Protocol's almost unlimited shard based scalability potential, it can accommodate hundreds or thousands of times more crypto protocols and crypto assets than Ethereum Layer1, making it the fattest blockchain Internet hub. Octopus Network is becoming the best habitat for non-financial Web3.0 applications in the satellite city belt around NEAR.

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