Competition Landscape and Development Trends of Public Blockchains

In recent months, hotspots in the cryptocurrency market have been emerging frequently, with tenfold and hundredfold coins appearing one after another, making it overwhelming even for seasoned players in the field. A careful analysis reveals that these hot projects essentially reflect the competition among underlying public chains. When a public chain is developing well and gaining popularity, it attracts a large influx of capital into that ecosystem in search of investment and development opportunities.

Since 2017, Ethereum has been recognized as the king of public chains. In terms of market capitalization performance, underlying technology, and the richness of ecological applications, it is a leader in the field of public chains. However, starting last year, major exchanges have successively launched their own public chains, competing to layout DeFi. These emerging public chains are fast and cost-effective, combined with the existing user base of the exchanges, leading to rapid development and accommodating a large amount of Ethereum's traffic overflow. As a rising star, Polkadot has also performed well, with its price surging and its ecosystem becoming increasingly rich, attracting numerous developers. Although Tron has been controversial, it is gradually becoming stronger with continuous efforts.

Blockchain practitioners have always hoped for the emergence of a phenomenal landing application, one that could become as widespread in households as Taobao, WeChat, and Douyin in the internet industry. After the birth of Bitcoin, blockchain was once simply regarded as a means for speculation and cryptocurrency trading, lacking practical use. The emergence of Ethereum introduced smart contracts for the first time, providing the possibility for the development of various applications, but a truly groundbreaking application has yet to appear.

It wasn't until the summer of 2020, when the DeFi craze emerged, that a large number of off-exchange individuals began to pay attention to the blockchain, DeFi, and cryptocurrency markets. The innovative gameplay of DeFi, such as automated collateral lending, liquidity mining, and yield aggregation, attracted many participants. Some made their first pot of gold, some achieved financial freedom directly, and others began to shout that the blockchain revolution was coming.

As the founding platform for smart contracts, over 90% of DeFi applications are built on Ethereum, such as the famous Uniswap, Compound, AAVE, etc. However, the influx of a large number of users has also posed unprecedented challenges to Ethereum, exposing some fatal weaknesses.

1. Low throughput and network congestion. Ethereum's TPS is only around 15-30, which is far from meeting the trading needs of DeFi users, often requiring over half an hour to complete a transaction.

2. Transaction fees are exorbitant. In order to complete transactions quickly, users have to pay high Gas fees, and during peak hours, there are even instances of "ten thousand dollar Gas fees." The average transaction cost also reaches several dozen dollars, which is unfriendly to both developers and small retail investors.

3. High threshold and difficulty in participation. Most projects on Ethereum have an English interface, making it difficult for ordinary investors to get started.

These issues provide opportunities for other public chains to take on the overflow traffic from Ethereum.

Since its launch in September last year, Binance Smart Chain ( BSC ) has developed rapidly, standing out due to its low cost, high efficiency, and diverse projects. The daily transaction volume on the chain has surpassed Ethereum, with the number of independent addresses exceeding 1 million. PancakeSwap has become the first BSC project with a market value of 1 billion dollars, and its 24-hour trading volume once surpassed that of Uniswap. BSC has formed an ecosystem that includes DeFi, NFT, gaming, and infrastructure, with over 100 projects launched. The price increases of projects on BSC are astonishing, with Venus, AUTO, and others experiencing over 50 times growth. The price of BNB has also continued to rise, with an increase of about 30 times over the year.

The Huobi Eco-Chain ( Heco ) has also developed rapidly since its launch in December last year. It has deployed projects across multiple sectors, including DEX, lending, and algorithmic stablecoins, with the leading DEX MDEX having a total locked value exceeding 1.7 billion USD. Heco has over 2 million total addresses, a locked value reaching 2.8 billion USD, and a single-day on-chain trading volume exceeding twice that of Ethereum. On-chain projects like HBO have surged 600 times in a short period, and the price of HT has also increased significantly.

Polkadot was founded by Ethereum co-founder Gavin Wood and is known as the "blockchain of blockchains." In 2021, the Polkadot ecosystem became a hot topic in the industry, having built diverse applications such as lending, stablecoins, and DEX. The price of DOT rose from $3-4 to $42 within six months, an increase of over 10 times.

Under the leadership of Sun Yuchen, TRON continues to make progress, and its ecosystem is constantly improving. TRC20-USDT is known for its speed and low fees, with a circulation exceeding 15.7 billion. The total value locked in TRON DeFi has reached 5 billion USD, forming a complete ecosystem that includes stablecoins, lending, DEX, and more. TRON also plans to provide unlimited scalability for the mainnet through the Sun Network project.

In the face of competition, Ethereum is also actively scaling. Founder Vitalik Buterin believes that the most urgent issue at present is to solve the Rollup problem, which can increase transaction volume by 100 times. Currently, Rollup projects such as ZKSync, Loopring, and Optimism are progressing smoothly, and several DeFi projects are already experimenting with them. Buterin stated that Ethereum can achieve 100 times scalability through Rollups and sharding while maintaining decentralization.

In addition to mainstream public chains, innovative public chains such as Conflux, NEAR, and Kortho have also made progress in their respective fields. The prosperity of the public chain ecosystem reflects the continuous advancement of blockchain applications and underlying technology. Only when more innovators join in to serve the entire ecosystem in different ways can blockchain technology truly realize its potential. Regardless of which public chain it is, as long as it can solidly improve technology, promote the implementation of applications, and contribute to the mainstreaming of blockchain, it is the best public chain.