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IOSG: Breaking down modular blockchains and expanding executive layer innovation

IOSG Ventures

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Who's next? Layer3 is coming

The original title: "IOSG Weekly Brief | chain and the expansion of executive innovation modular blocks # 105"

原文来源： IOSG

Part.1 Insight

Modularized blockchain and expanded executive layer innovation

Source: IOSG 2021 Summit

A popular way to understand ZK Rollups and Optimistic Rollups

First let's talk about Layer 2. Layer 2 has no concept of blocks, no nodes, and no consensus mechanism, so blocks are not visible on the Layer 2 block browser. The Layer 2 operator is only responsible for sorting transactions and processing them. The key to a layer 2 network is the sorting of transactions.

2021 saw the rise of the market for Layer2 and more liquidity/projects. There are now more than 19 generic or single application Layer 2 applications on Ethereum. Among them, StarkWare and ZkSync are leading the way in ZK Rollups with zero-knowledge proof. Arbitrum and Optimism are leading projects in Optimistic Rollups.

ZK head chain StarkWare's TVL is worth $1.20 billion and handles over 55 million transactions. Currently, StarkEx technology solutions are used in projects such as dYdX, ImmutableX, DeversiFi and Sorare. In terms of OP, Arbitrum has dealt with more than three million transactions in total. At present,TVL exceeds twice that of Optimism, reaching $2.25B (while Optimism only deals with more than two hundred thousand transactions,TVL is $1.1b). We can't ignore projects that are moving in the direction of cross-chain mobility, such as Celer, Hop Protocol, and Connext.

In brief, the differences between the two Layer 2 (ZK and OP) schemes can be classified as follows:

ZK encrypts the result and the proof of the result and sends a small part of the data to the main network to prove that the result is ok. OP is also to upload the results and original records to the main network, if there is a challenge can have evidence to check.

As the Layer 2 infrastructure becomes more mature, we can expect a richer ecosystem at Layer 2. We expect that over 80% of the traffic on the Layer 1 main chain will migrate to Layer 2 in the coming year, and this is just the beginning of the Layer 2 migration.

Modularize the three layers of blockchain

Source: IOSG 2021 Summit

The Modular Blockchain concept offers a better solution to the expanded "impossible triangle". By separating Execution from Security and Data Availability, the Ethereum main chain will provide better underlying compatibility design, while the innovative L2 Execution layer will provide higher TPS and lower fees.

Simply put, a blockchain has three responsibilities: execution, security, and data availability. For a long time, these responsibilities have been assigned to a single blockchain itself, which has led to scalability issues. Under the modular blockchain concept, the execution layer, security layer and data availability layer will be separate.

Execution, Security, and DA are separate components of the Modular blockchain concept, of which the Execution layer is the most notable development in 2021.

For Security, this layer is limited to BTC/ETH/Polkadot due to competitive difficulty. BTC also has no plans to compete with ETH anytime soon. In DA, ETH is still ahead, mainly due to the large amount of data availability brought by the large number of sharding chains. Also don't ignore the potential DA Chains. As ETH2.0 evolves, as more data availability becomes available to Rollups, TPS for the main chain will increase significantly and fees will decrease.

From the perspective of security layer, BTC and ETH are the only two chains that target decentralization from the point of view of nodes. The security layer is the most important, because anti-censorship and the degree of decentralization are the most important qualities of a chain. BTC has no plans to offer higher data availability than ETH in the short term, so Ethereum remains the primary provider of Layer 2 security.

In terms of data availability, a sufficient number of blocks guarantee the possibility of more data storage. ETH is currently ahead because of its shard chain plan, so it can provide enough data availability for Layer 2. However, competitors such as Celestia, Polygon, Near and Tezos have the same plans as ETH. With the development of ETH2.0 (a term recently dropped by the Ethereum Foundation), the TPS of the main chain will increase significantly and the handling fee will be reduced as more data availability is provided to the rollup process.

Finally, trading and smart contracts occur at the executive level. All smart contracts, dApps, and users also communicate at the executive level. The executive layer should focus on handling as much execution as possible while outsourcing security and data availability to the project. Current Layer 2, such as Arbitrum, Optimism, StarkWare and ZkSync are all focused on developing more effective execution layers.

Overview of the current executive level

Layer 2 will skyrocket in 2021

Source: IOSG 2021 Summit

Even though Layer 2 has only been online for a few months, their TVL has already reached $7 billion. Arbitrum has the highest TVL among the existing Layer 2. Since Arbitrum has EVM, it is easier for developers to deploy applications on it. Binance recently announced that it began to support the withdrawal of funds on Arbitrum Layer 2. This will also greatly increase the use of Arbitrum Layer 2. Then ZK Rollups (StarkWare) had more transactions in the last 7 days, showing a stronger expansion advantage compared to Optimistic Rollups. In addition, most DeFi applications such as Uniswap and Sushiswap have already been deployed on L2.

Some Layer 2 applications, such as dYdX, have achieved TPS performance comparable to CEX and L1 applications. DYdX had more trading days than Coinbase and Uniswap combined in the first 2 months of its launch! So Layer 2 has a lot of potential.

One area of controversy at Layer 2 is transaction fees. The Layer 2 transaction fee is not cheaper than the Layer 1 transaction fee, but after the developers optimize the network, the Layer 2 transaction fee should be much lower than it is now. The competitive advantage of Layer 2 in transaction fees will gradually show up. Currently, the transaction cost of Layer 2 is at least 10 times lower than that of L1. In the future, transaction fees will be less than $0.10 per transaction. In the near future, ethereum Layer 2 will not only have transaction fees below 0.1, but will also have more market share than BSC, Polygon and other Layer 1. So, in the next 3-5 years, we expect most applications and users to migrate to Layer 2.

Who's next? Layer 3 To Da Moon!

Source: IOSG Ventures

If you think Layer 2 is the best solution for scaling, you're wrong! While Layer 2 can scale up and reduce the cost per transaction, some applications need more customized services that better fit their needs. Layer 2 retains its advantages in terms of decentralization and other general purposes, but Layer 3 further increases the efficiency of the application.

Layer 3 is to Layer 2 just as Layer 2 is to Layer 1. Layer 3 publishes validity certificates on Layer 2, just as Layer 2 publishes validity certificates on Layer 1 by performing bulk transactions. When Layer 2 is able to support validation of inspector smart contracts (such as after StarkWare launched StarkNet), this multiple packaging structure can increase the data utilization of validation. In addition to capacity expansion, Layer 3 will have more development directions, such as privacy. In this case, the proof of validity will be replaced by the proof of zero knowledge.

conclusion

We've been paying close attention to the development of Layer 2 in recent years. We are pleased to work with many of L2's leading projects, such as Arbitrum for Optimistic Rollups, StarkWare for ZK Rollups, and Celer, a cross-chain bridge mobility solution.

We believe that Layer 2 networks will become more competitive than Layer 1 in terms of transaction fees /TPS in the near future.

In addition to generic Layer 2, custom Layer 2 and Layer 3 will further extend blockchain, such as infrastructure provider StarkWare's SaaS business.

At the infrastructure level, there are some attractive investment opportunities in new technologies, such as Celestia for data availability track and Movr for cross-chain mobility Transfer Track.

We also expect to see significant innovation on the application side, with new technology application design driven by Layer 2 technology. Layer 2 features such as capacity expansion and privacy are sure to lead to more innovations in dApp design!

Reference

https://wayneti.substack.com/p/-layer2-

https://polynya.medium.com

https://medium.com/starkware/fractal-scaling-from-l2-to-l3-7fe238ecfb4f

https://l2beat.com

https://l2fees.info

Part.2 Investment and financing events

GearTechnologies completed a $12 million round led by Blockchange, with three arrows capital and Gavin Wood contributing

* Boca smart contract development

Boca smart contract developer Gear Technologies has announced a $12 million funding round led by Blockchange, Three Arrow Capital, Lemniscap, Distributed Globals and other executives from the Web3 Foundation and Parity Technologies also participated in the round, including Polkadot founder Gavin Wood. Gear aims to provide a fast track for the development of smart contracts in the Boca ecosystem, with the next step planned to launch the test network in early 2022, pass third-party security and financial audits, and go live in the second half of the year

Multichain has closed a $60 million funding round led by Binance Labs

* Cross-chain protocols

Multichain (formerly Anyswap) raised $60 million in funding from Binance Labs, Other investors included Sequoia China, IDG Capital, Triple Arrow Capital, DeFiance Capital, Circle Ventures, Tron Foundation, Hypersphere Ventures, Primitive Ventures and Magic Ventures and HashKey. The funding round will be used to support the Multichain ecosystem and its internal teams, including research and development, audit and services. In addition to financing support, Multichain has also established a partnership with Binance Smart Chain (BSC), Binance Labs said.

Render Network raised $30 million in funding, led by Multcoin Capital

* Distributed rendering network

Render Network, a distributed rendering Network, has closed a $30 million funding round led by Multicoin Capital, Alameda Research, Solana Foundation, Sfermion and angel investors Vinny Lingham and Bill Lee contributed. Funding will further improve its "rendering engine" integration. Render Network will also set up a Render Marketplace on Solana to enable a "frictionless one-click purchase process for NFT, 3D assets and services built with Render Network".

RSS3 closed a new round of funding, led by Coinbase and Dragonfly

* Decentralized information flow protocols

RSS3, a decentralized information Flow protocol, has announced the completion of a new round of funding, The round was led by CoinShares Ventures, Coinbase Ventures, Dragonfly Capital, Mask Network, HashKey Group, Fabric Ventures, Arweave, Dapper Labs, Avalanche Asia Star Fund, Youbi Capital, Headline VC, Formless Capital, imToken Ventures and Balaji Srinivasan, The Jiho, Miss ₿ ITcoin and other institutional and individual investors participated. RSS3 is a next-generation decentralized social and content protocol that returns data including relationships, content, and portraits to users through built-in commerce, recommendation, and storage mechanisms. RSS3 hopes to replace the traditional centralized distribution as the core of the Web2 application ecosystem, to create a more prosperous and healthy content social network. The 12th round of RSS3 Gitcoin funder airdrop has been opened for application.

Interlay closes $6.5 million in funding, led by DFG Capital. IOSG Ventures such as ginseng

*DeFi

DeFi interoperable platform Interlay announced the closing of a $6.5 million funding round led by DFG Capital, IOSG Ventures, KR1, Hypersphere, Nexo Finance, D1 Ventures and Signum Capital participated. According to the announcement, the new funds will be used to expand its operations and bring more developers to its open source platform. Currently, the company is building infrastructure for decentralized financial applications on major blockchains such as Ethereum, Cosmos and Polkadot.

MetaMall closes $4.6 million seed round

*VR Shopping mall

MetaMall, a VR shopping mall, has announced a $4.6 million seed round led by 316VC, MarsVC, WLI Capital, BullPerks, HVS Ventures, CCK Ventures, and others. The funding will be used to expand technology and marketing teams and work with technology platforms and designers to build a retail and game-focused metauniverse. MetaMall, deployed on the Solana network and with cross-chain compatible wallets, is a VR shopping and lifestyle experience zone.

Arcade has raised $15 million in Series A funding, led by Pantera Capital

*NFT mortgage lending

Arcade (formerly Pawn. Fi), A platform that allows users to borrow against NFT, announced that it has raised $15 million in Series A funding, led by Pantera Capital, Castle Island Ventures, Franklin Templeton Blockchain Fund, Golden Tree Asset Management, Eniac Ventures, Protofund, Probably Nothing Capital, Lemniscap, Zac Prince, CEO of BlockFi, Richard Ma, CEO of Quantstamp and others participated in the investment. The funding, an equity round, will help Arcade expand its team, launch the platform publicly and attract more users.

StarSharks has completed a $4.8 million private financing, with participation of Binance Labs, DAO Maker and others

*GameFi

GameFi project StarSharks completed $4.8 million private financing, Binance Labs, DAO Maker, LD Capital, Redline DAO, Everest Ventures Group, Gate. IO Labs, Kucoin Labs, NGC Ventures, Infinity Ventures Crypto, YGGSEA, 3 Commas Capital and Winkrypto and more than 30 institutions and individual investors participated in the investment. This round of funding will be used for new game development and community ecosystem development. StarSharks is a 3D NFT gaming platform set in the sea world, aiming to build a community-driven metauniverse in the future. As previously reported, Binance Labs has made a strategic investment in StarSharks.

Mystic Moose has completed a $5 million seed round to launch the metasverse platform Planet Mojo

* Metaverse games

Indie game developer Mystic Moose has announced the completion of a $5 million seed round and the release of a meta-universe platform called Planet Mojo. Animoca Brands led the round, Courtside Ventures, Republic Crypto, Alameda, AU21, Sfermion, Polygon Studios, Collab+Currency, Sky Vision Capital, Spartan Capital, HyperEdge, Momentum6, Fourth Revolution Capital, etc. The new funding will be used to further develop Planet Mojo.

Cosmic Guild completed a $1.5 million seed round of financing, led by Binance Labs and participated by Alameda Research

* Game guild

Cosmic Guild raised $1.5 million in seed funding, led by Binance Labs, DeFiance Capital, Alameda Research, and Play Ventures. Funds will be used to expand Cosmic Guild's PORTFOLIO of NFT and digital gaming assets to provide more opportunities for Cosmic's gaming community.

DOGAMI raised a $6 million pre-seed round from Ubisoft and Animoca Brands

* Virtual pet NFT game

DOGAMI raised $6 million pre-seed round based on Tezos' Play-to-earn NFT project, Ubisoft, Animoca Brands, Co-founder of The Sandbox, XAnge, Blockchain Founder Fund, Ghaf Capital, Draper Goren Holm contributed. The new funding will help build the future of pet ownership 3.0 and the role of blockchain technology in these processes.

DeSyn agreement completed multi-million dollar financing, OKEx Blockdream Ventures, LD Capital and others participated in the financing

* DeFi agreement

The DeSyn Agreement announced the completion of a multi-million dollar second round of funding from trading platform funds OKEx Blockdream Ventures, MEXC, Mirana Ventures, Bibox and others. The investors will cooperate with DeSyn in the creation, management and distribution of THE ETF business. In addition, the DeSyn Agreement will open test net invitations on December 24, 2021. DeSyn protocol is a DeFi protocol that allows users to create and trade pool-based assets, such as ETFs/portfolios, leveraged assets, etc., through smart contracts. Other features include multi-asset liquidity pools, AMM, etc.

SPACE Metaverse raised $7 million in funding from Dapper Labs and Animoca Brands

* Metaverse platform

SPACE Metaverse, an art and business virtual world, has raised $7 million, Dapper Labs, CoinFund, Animoca Brands, Digital Currency Group (DCG), LD Capital, Hof Capital, etc. The money will be used to build various meta-universes and connect them to a parallel society, and "build the economic backbone of the meta-universe."

CHAI raised $45 million in Series B+ funding, led by SoftBank Asia Ventures and Nyca Partners

* Payment solutions

Singapore payment solutions provider CHAI has raised a $45 million Series B+ round led by SoftBank Ventures Asia and Nyca Partners, KT Investment, Conductive Ventures, Nordstar Capital and Samsung Next participated. CHAI will use the new funds to expand its southeast Asian market and develop a "fully automated end-to-end payment infrastructure" for digital merchants across Asia.

Part.3 Project progress after IOSG investment

Avalanche partnered with Alchemy Pay to provide fiat payment portals for business transactions and DeFi; EtherDrops added support for Avalanches & NBSP; C - chain network

* Infrastructure

On December 24, Avalanche announced the integration of the fiat payment portal with Alchemy Pay (ACH), a payment solution that connects fiat currency and the crypto economy. Alchemy Pay has also integrated AVAX into the global crypto gateway so Avalanche can be used more widely for business-to-business or customer-to-business payments. The Alchemy Pay payment network is currently supported in 65 countries with more than 300 payment channels. Alchemy Pay has more than 2 million merchants worldwide through partnerships with mainstream payment and e-commerce platforms such as Shopify, Arcadier and QFPay. Avalanche has also announced that it will join Alchemy Pay as a founding member of the Blockchain Infrastructure Alliance.

Telegram robot EtherDrops added support for Avalanche C-chain. EtherDrops offers users the opportunity to track and receive real-time notifications of wallet transactions, DEX and CEX exchanges, liquidity pools and more, supporting networks like Ethereum, BSC, Fantom and Polygon.

Uniswap V3 contract has been officially deployed on Polygon main network

* capacity

On December 23, decentralized exchange (DEX) Uniswap and Ethereum scaling solution Polygon announced that all Uniswap V3 contracts have been officially deployed to Polygon's main network, just days after UNI holders voted to approve the governance proposal.

The hybrid algorithm Stablecoin USDs officially launched by Arbitrum

*Layer 2

On December 24, Sperax Announced on Twitter that the hybrid algorithm Stablecoin USDs was officially launched on Layer2 solution Arbitrum, users can cast USDs on the corresponding platform through tokens such as SPA. Sperax is said to be integrating Curve collateral with USDs, which will allow USDs holders to reap the benefits.

Boca starts its second parallel chain slot auction

* boca

December 24 - Polkadot officially tweeted that the second auction of parallel chain slots has started, and auctions 6-11 will be held in the next 12 weeks, with new auctions starting every two weeks. So far 12 parallel chains are involved.

Celer announced a partnership with ParaSwap to enable multi-chain scaling by establishing an open native asset standard

* Multi-chain expansion

Layer 2 scaling platform Celer Network announced a partnership with DEX mobility aggregator ParaSwap to build an open native asset standard for multi-chain scaling.

The 1Inch Wallet for iOS is getting an update that will include DeFi Racer games

*DeFi

Decentralized converged trading agreement 1Inch has announced that on December 21, the 1Inch Wallet for iOS will be updated with a DeFi Racer game from Nord Beaver Studios. The game is 1Inch's first entry into the Web 3.0 space, and there will be more applications based on Web 3.0 tools and mechanics in the future.

Part.4 Industry pulse

TerraUSD (UST) overtook DAI to become the largest decentralized stabocoin by market cap

*DeFi

On December 21, TerraUSD (UST) has now surpassed DAI to become the fourth stablecoin in terms of market capitalization, as UST's market capitalization surpassed $9 billion. Tether (USDT), USD Coin (USDC) and BUSD (BUSD) are all centralized stablecoin, while UST is a decentralized stablecoin, which means UST is now the most decentralized stablecoin by market capitalization.

Swiss bank SEBA applied to join Aave's DeFi platform Aave Arc whitelist

*DeFi

On Dec. 22, SEBA Bank, a Bank focused on digital assets, submitted a proposal to Aave Governance to add SEBA Bank to the Aave Arc whitelist. Aave Arc is the agency DeFi platform developed by the team behind DeFi Lending Agreement Aave. SEBA has integrated several DeFi tokens into its proprietary agency-level cold storage hosting solution, including AAVE. According to SEBA, "Aave Arc" and the launch of its licensing layer provide them with an excellent opportunity to capture the benefits of DeFi while complying with regulatory obligations. At SEBA, we believe this will directly benefit the Aave community as institutional mobility will boost TVL and agreement revenues ".

Kraken, a crypto exchange, acquired Staked, a decentralized pledge service

*DeFi

Crypto trading platform Kraken announced on Dec. 22 that it has acquired decentralized pledge service Staked for an undisclosed amount. The acquisition is Kraken's fifth in 2021. The acquisition complements Kraken's existing escrow pledge offering, enabling customers to earn rewards for their encryption while maintaining full control of their digital assets.

Google data: NFT has overtaken Crypto in global searches for the first time

*NFT

According to Google Trends, the number of searches for the term NFT surpassed Crypto and Bitcoin for the first time, with 42 searches for NFT and 39 for Crypto between December 19 and 25, suggesting that the concept of digital collectibles has penetrated the mainstream. According to DappRadar, the NFT platform OpenSea has a total transaction volume of $13.25 billion.

Rari Capital and Fei Protocol's proposed multi-billion dollar DAO merger has been approved

*DAO

The vote to merge Rari Capital and Fei Protocol was approved by two DAO members at ethereum block height 13,850,929 on Tuesday, according to CoinDesk. The two projects will be merged through token exchange, and the token code will be unified into TRIBE. A total of 103 wallet addresses were voted and the combined total lock-up value (TVL) will reach $2 billion. Under the terms of the merger, Rari's RGT token holders will be able to exchange their tokens for RGT at a rate of 26.7 TRIBE at any time during the 180-day window, Unsatisfied TRIBE holders will have three days to swap the TRIBE for a share of Fei Protocol's coffers. Fei founder Joey Santoro said the first product of the joint project is expected to be launched in "late January or early February" and the team is looking to expand further through DAO acquisitions, with automated market makers (AMM), structured products and derivatives as acquisition or expansion targets.

Gaming giant Zynga has teamed up with software developer Forte to develop blockchain-based games

*GameFi

On December 23, Forbes reported that Zynga Inc. Has signed a partnership with Blockchain game developer Forte. The two companies plan to develop a blockchain game based on Zynga's IP and user background. "Our goal is to take the quality and enjoyment of Web3 and blockchain games to the next level, while also providing a safe and reliable ecosystem for our players and community to enjoy for years to come," said Zynga's recently hired vice president of blockchain games. The companies stressed that they plan to build games that focus on safety and engagement.