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Performance has become a bottleneck for the further development of the industry. The blockchain network has created a new, decentralized trust foundation for individuals and enterprises to conduct transactions.
The first generation of blockchain networks represented by Bitcoin pioneered a new decentralized electronic currency transaction model in a distributed accounting manner, revolutionizing a new era. The second generation of blockchain networks represented by Ethereum gave full play to imagination and proposed to implement decentralized applications (dApp) in the form of distributed state machines.
Since then, the blockchain network has started its own rapid development history of more than ten years, from Web3 infrastructure to various tracks represented by DeFi, NFT, social networks and GameFi, and countless innovations in technology or business models have been born. The vigorous development of the industry requires continuous attraction of new users to participate in the ecological construction of decentralized applications, which in turn puts higher requirements on product experience.
As a "unprecedented" new product form, Web3 must not only innovate in meeting user needs (functional requirements), but also consider how to strike a balance between security and performance (non-functional requirements). Since its birth, people have proposed various solutions to try to solve performance problems.
These solutions can be roughly divided into two categories: one is on-chain expansion solutions, such as sharding and directed acyclic graphs (DAG); the other is off-chain expansion solutions, such as Plasma, Lightning Network, sidechains, and Rollups. But this is far from keeping up with the rapid growth of on-chain transactions.
Especially after the DeFi Summer in 2020 and the continued outbreak of inscriptions in the Bitcoin ecosystem at the end of 2023, the industry urgently needs new performance improvement solutions to meet the requirements of "high performance and low fees". Parallel blockchain was born in this context.
The parallel EVM narrative marks the formation of a two-strong competition pattern in the field of parallel blockchain. Ethereum processes transactions serially, and transactions must be executed one by one in order, and the resource utilization rate is not high. If the serial processing method is changed to parallel processing, it will bring a huge improvement in performance.
Ethereum competitors such as Solana, Aptos and Sui all have built-in parallel processing capabilities, and the ecosystem has also developed very well. The market value of token circulation has reached 45 billion, 3.3 billion and 1.9 billion US dollars respectively, and they have formed a parallel non-EVM camp. Faced with challenges, the Ethereum ecosystem is not to be outdone, and they have stepped forward to empower EVM, forming a parallel EVM camp.
Sei has made a high-profile claim in its v2 version upgrade proposal that it will become the "first parallel EVM blockchain", with a current market value of 2.1 billion US dollars, and there is still greater development in the future. The new parallel EVM public chain Monad, which is currently the most popular in marketing, is very popular with capital, and its potential cannot be underestimated. Canto, an L1 public chain with a market value of $170 million and its own free public infrastructure, also announced its own parallel EVM upgrade proposal.
In addition, a number of L2 projects that are still in the early stages are also providing cross-ecological performance improvements by integrating the capabilities of multiple L1 chains. Except for Neon, which has a circulating market value of $69 million, other projects still lack relevant data. I believe that more L1 and L2 projects will join the parallel blockchain battlefield in the future.
Not only does the parallel EVM narrative have a lot of room for market growth, but the parallel blockchain sector to which the parallel EVM narrative belongs also has a lot of room for market growth, so the market prospects are broad.
At present, the overall circulation market value of L1 and L2 is 752.123 billion US dollars, and the circulation market value of parallel blockchain is 52.539 billion US dollars, accounting for only about 7%. Among them, the circulation market value of projects related to the parallel EVM narrative is 2.339 billion US dollars, accounting for only 4% of the circulation market value of parallel blockchain.
The industry generally divides blockchain networks into 4 layers:
Layer 0 (network): blockchain underlying network, processing basic network communication protocols
Layer 1 (infrastructure): decentralized network that relies on various consensus mechanisms to verify transactions
Layer 2 (extension): various second-layer protocols that rely on Layer 1, aiming to solve various limitations of Layer 1, especially scalability
Layer 3 (application): relies on Layer 2 or Layer 1, used to build various decentralized applications (dApp)
Parallel EVM narrative projects are mainly divided into single blockchain and modular blockchain, and single blockchain is divided into L1 and L2. From the total number of projects and the development of several major tracks, it can be seen that the parallel EVM L1 public chain ecology still has a lot of room for development compared to the Ethereum ecology.
The DeFi track has the demand for "high speed and low fee", and the game track has the demand for "strong real-time interaction", both of which have certain requirements for execution speed. Parallel EVM will inevitably bring better user experience to these projects and promote the development of the industry into a new stage.
L1 is a new public chain with built-in parallel execution capabilities and is a high-performance infrastructure. In the L1 camp, projects represented by Sei v2, Monad and Canto design their own parallel EVM, which is compatible with the Ethereum ecosystem and provides high-throughput transaction processing capabilities.
L2 integrates the capabilities of other L1 chains to provide cross-ecological cooperation and expansion capabilities, which is the mainstream of rollup. In the L2 camp, Neon is an EVM simulator on the Solana network, and Eclipse uses Solana to execute transactions but settles on EVM. Lumio is similar to Eclipse, except that the execution layer is replaced by Aptos.
