chandanCrypto Applications Product Market Fit Analysis
In Crypto, there are a lot of applications that haven’t found product-market fit. But there is also a handful of applications that have a product market fit and are growing stably Here I will just explain my thoughts on which applications have Product-Market-Fit. Storage of Value (an asset that maintains or increases its value rather than depreciating)Bitcoin is the dominant product-market fit for this, followed by ETH. However, BTC has questionable long-term sustainability properties. Thanks...
chandanHow to Protect Your Crypto Wallet 95% of the Time
Always keep your private key and seed phrase offline, such as by writing them down on paper and storing them in a secure location that only you have access to. Do not save them on any device or cloud storage, as these can potentially be hacked and your wallet compromised.To further increase security, you can consider leaving out a few words from your seed phrase when writing it down, and memorizing or securely storing these words separately. This way, even if someone gets hold of the paper wi...
chandanAre Layer 2s Superior to Alt-1 for Scaling Capabilities?
Traditional monolithic execution layers rely on 1000s of block producers and non-producing full nodes, requiring a majority of them to act honestly. In contrast, layer 2s only require a single honest "Sequencer" to guarantee network integrity. This asymmetric trade-off suggests that layer 2s will consistently deliver high throughput and significant performance advantages, even when the same hardware is employed by both layer 1 and layer 2. This is due to the inefficiencies of synchronization ...
Researching Layer 1/2s, DeFi, and modular ecosystems.
chandanCrypto Applications Product Market Fit Analysis
In Crypto, there are a lot of applications that haven’t found product-market fit. But there is also a handful of applications that have a product market fit and are growing stably Here I will just explain my thoughts on which applications have Product-Market-Fit. Storage of Value (an asset that maintains or increases its value rather than depreciating)Bitcoin is the dominant product-market fit for this, followed by ETH. However, BTC has questionable long-term sustainability properties. Thanks...
chandanHow to Protect Your Crypto Wallet 95% of the Time
Always keep your private key and seed phrase offline, such as by writing them down on paper and storing them in a secure location that only you have access to. Do not save them on any device or cloud storage, as these can potentially be hacked and your wallet compromised.To further increase security, you can consider leaving out a few words from your seed phrase when writing it down, and memorizing or securely storing these words separately. This way, even if someone gets hold of the paper wi...
chandanAre Layer 2s Superior to Alt-1 for Scaling Capabilities?
Traditional monolithic execution layers rely on 1000s of block producers and non-producing full nodes, requiring a majority of them to act honestly. In contrast, layer 2s only require a single honest "Sequencer" to guarantee network integrity. This asymmetric trade-off suggests that layer 2s will consistently deliver high throughput and significant performance advantages, even when the same hardware is employed by both layer 1 and layer 2. This is due to the inefficiencies of synchronization ...
Researching Layer 1/2s, DeFi, and modular ecosystems.
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Fragmentation is becoming a bigger problem than ever with the launch of new Layer2s and App Chains every day.
Currently, there are 46 active Layer2s listed on l2Beat, with 34 upcoming projects. While these Layer2s and Roll Apps improve the user experience in terms of lower gas fees, faster transaction speeds, and no MEV, they have also made asset management and the overall user experience worse.
Here's my personal experience:
If I want to buy a token that is only available on a Layer2 I don't use, or if I want to mint an NFT or mirror post on a Layer2 I'm not familiar with, I have to bridge my tokens, bridging between Layer2s is still not natively supported on most wallets, and the wallet user experience when moving between networks is poor. Additionally, I have to leave a small amount of native ETH on all these Layer2s to pay for gas.
As more App Chains and Layer2s launch, this problem will only worsen. In the long run, we may have only a few dominant rollups due to the power law effect, but currently, we have many rollups building network effects in different areas, such as Zora for artists, Aevo for perpetual trading, and PGN for public goods. It's an important problem that needs to be solved.
Potential solutions:
Wallet-level solution: Wallets can abstract the Layer2s/Appchains by managing the bridging between chains, switching between Layer2s while using DApps, and providing a clear experience for users. Some wallets have already started doing this.
Creating a new layer (Particle Network): This solution involves creating a new layer that provides wallet abstraction, chain abstraction, and cross-chain execution. It tracks the state of accounts from different chains and optimizes the path for transactions. It also uses aggregator DAs, dual staking (Eigen layer), but has potential drawbacks like high overhead costs for nodes and slow updates.
Using the Cake Framework from Frontier.tech
This framework divides chain abstraction into three layers: This allows for faster innovation.
Permission layer: Holds the private key for the user and signs messages on their behalf, which are executed on-chain as transactions.
Solver layer: Estimates fees and execution speed based on the user's initial balance and intent, which is crucial in a cross-chain setting where transactions become asynchronous, and sub-transactions may fail during execution.
Settlement layer: After the user approves the transaction with their private key, this layer ensures its execution by bridging the user's assets onto the target chain and then executing the transaction.
Final thoughts:
Today, user experience (UI/UX) challenges can be addressed more quickly by developing a smart wallet with an enhanced user experience, capable of aggregating bridges, DEXs, and facilitating token purchases across multiple networks without users needing to know the specific chains in use. Moreover, the optimal approach to capturing value is by functioning as a user-facing application, rather than focusing on the lower layers.
Reference:
https://www.superchain.eco/ecosystem/chains
https://l2beat.com/scaling/tvl
Fragmentation is becoming a bigger problem than ever with the launch of new Layer2s and App Chains every day.
Currently, there are 46 active Layer2s listed on l2Beat, with 34 upcoming projects. While these Layer2s and Roll Apps improve the user experience in terms of lower gas fees, faster transaction speeds, and no MEV, they have also made asset management and the overall user experience worse.
Here's my personal experience:
If I want to buy a token that is only available on a Layer2 I don't use, or if I want to mint an NFT or mirror post on a Layer2 I'm not familiar with, I have to bridge my tokens, bridging between Layer2s is still not natively supported on most wallets, and the wallet user experience when moving between networks is poor. Additionally, I have to leave a small amount of native ETH on all these Layer2s to pay for gas.
As more App Chains and Layer2s launch, this problem will only worsen. In the long run, we may have only a few dominant rollups due to the power law effect, but currently, we have many rollups building network effects in different areas, such as Zora for artists, Aevo for perpetual trading, and PGN for public goods. It's an important problem that needs to be solved.
Potential solutions:
Wallet-level solution: Wallets can abstract the Layer2s/Appchains by managing the bridging between chains, switching between Layer2s while using DApps, and providing a clear experience for users. Some wallets have already started doing this.
Creating a new layer (Particle Network): This solution involves creating a new layer that provides wallet abstraction, chain abstraction, and cross-chain execution. It tracks the state of accounts from different chains and optimizes the path for transactions. It also uses aggregator DAs, dual staking (Eigen layer), but has potential drawbacks like high overhead costs for nodes and slow updates.
Using the Cake Framework from Frontier.tech
This framework divides chain abstraction into three layers: This allows for faster innovation.
Permission layer: Holds the private key for the user and signs messages on their behalf, which are executed on-chain as transactions.
Solver layer: Estimates fees and execution speed based on the user's initial balance and intent, which is crucial in a cross-chain setting where transactions become asynchronous, and sub-transactions may fail during execution.
Settlement layer: After the user approves the transaction with their private key, this layer ensures its execution by bridging the user's assets onto the target chain and then executing the transaction.
Final thoughts:
Today, user experience (UI/UX) challenges can be addressed more quickly by developing a smart wallet with an enhanced user experience, capable of aggregating bridges, DEXs, and facilitating token purchases across multiple networks without users needing to know the specific chains in use. Moreover, the optimal approach to capturing value is by functioning as a user-facing application, rather than focusing on the lower layers.
Reference:
https://www.superchain.eco/ecosystem/chains
https://l2beat.com/scaling/tvl
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