From: thepipeline_xyz
The blockchain industry is rapidly advancing, with a significant focus on addressing performance and scalability to enable mass adoption and support complex applications. Experts note that while the technical challenges are being met, the industry is poised for a new phase of growth focused on real-world use cases [00:21:12].
Current Landscape and Challenges
Historically, the Ethereum Virtual Machine (EVM) has been characterized as “slow, clunky, and broken,” making it difficult to work with [00:01:13]. This has led to issues where, even with 50,000 users, gas fees on networks can “go through the roof” and become “literally unusable” [00:02:26]. For example, when high volumes hit applications like GMX, Arbitrum’s gas fees can increase to the point of being prohibitive for average users [00:09:37].
A major concern is that current infrastructure, including Solana, would “break immediately” if a single application reached the user base of a successful Web2 app like Instagram or Facebook [00:11:04]. Beyond performance, security remains a critical issue, with approximately $4 billion lost annually due to smart contract hacks [00:24:03]. The user experience is also noted as a bottleneck, with complexities around wallets and seed phrases deterring new users [00:36:26].
Another challenge is the developer ecosystem. While Solana is doing well, getting builders to write in Rust is difficult [00:07:03], and there’s a financial disincentive for developers not to use Solidity due to existing volume and Total Value Locked (TVL) on EVM chains [00:07:13].
Emerging Solutions and Innovations
New projects are emerging to address these challenges by focusing on high throughput blockchains and enhanced infrastructure:
Movement Labs (M2)
Movement Labs is building a network of Move-based blockchains, launching M2 as the first Move rollup on Ethereum [00:01:37]. M2 leverages Ethereum’s security and liquidity as a Layer 2 solution [00:04:01]. Key components include:
- Move Virtual Machine (MoveVM): The execution environment, originally developed by Facebook’s Diem project, offers strong security features like formal verification, which can prevent many common hack types [00:24:01].
- Celestia for Data Availability (DA): Partnering with Celestia helps avoid high gas fees associated with traditional rollups on Ethereum, offering Layer 1-like performance with low fees [00:04:13].
- Decentralized Sequencer Set: Utilizes Snow Consensus (from Avalanche) for a decentralized sequencer set with low hardware requirements and financial incentives for validators, ensuring network uptime [00:04:47].
- Fractal (Transpiler): Allows any Solidity code to be mapped to Move opcodes, making Movement’s MoveVM compatible with existing Solidity projects [00:23:39]. This ensures “backwards compatibility” similar to running PS4 games on a PS5 [00:23:30]. While not 100% the same security as native Move, it offers significantly enhanced security compared to traditional EVM [00:26:45].
Monad
Monad aims to make the EVM fast by changing underlying components like the database and consensus mechanism, operating as an L1 [00:29:26]. Monad is “fully EVM bytecode compatible” [00:31:17] and seeks to contribute improvements back to Ethereum via EIPs [00:30:25]. They plan to address security flaws by:
- Reducing development costs so developers can implement more checks and avoid compromising security for gas optimization [00:33:41].
- Adding special instructions to the VM (e.g., to mark contracts as non-reentrant), which is possible due to their L1 architecture [00:34:12].
Focus on Collaboration and Growth
There is a growing consensus that the blockchain ecosystem needs more collaboration and less tribalism [00:14:45]. The execution layer, particularly among different VMs like Monad VM, EVM, MoveVM, and Solana VM, is seen as a “friendliest layer” where builders are not engaged in “Twitter Wars” [00:15:00]. Projects are focusing on “growing the pie, not fighting over the pieces” [00:32:27], aiming to enable more use cases and allow developers to choose the best environment for their needs [00:32:40].
Future Potential of Blockchain Applications and Adoption
The industry is reaching a point where infrastructure is “99% there” [00:21:05], making it ready to unlock actual applications [00:21:14]. Key areas identified for disruption include:
- Payments: Blockchains are poised to disrupt cross-border payments, offering more efficient and affordable alternatives to traditional services like Western Union [00:35:57]. Innovations like account abstraction and better wallet experiences are crucial for mass adoption [00:36:33].
- Retail Trading: On-chain order books for retail trading are becoming viable, offering slippages that make sense for both users and market makers [00:37:19].
- Gaming: While previous attempts often involved Ponzi mechanics, the future of Web3 gaming lies in building “fun games” first and then integrating blockchain components for asset and state tracking [00:38:47]. The goal is to move beyond speculative models to sustainable economics and unique social coordination experiences that do not solely revolve around financial gain [00:40:46].
- Social Applications: Unique use cases like Friend.Tech, while perhaps not long-term, have prompted thinking about how to leverage blockchain for social attention and experiences beyond traditional finance [00:42:51].
The breaking down of tribalism and the focus on collaborative development of high-performance blockchains indicate a maturing industry ready for broader adoption and the deployment of “killer apps” [00:10:47].