There are a number of blockchains out there competing for market share. Some chains are generalists with a focus on growing the greater ecosystem, while others focus on scaling or changing the financial landscape.
Even as a handful of the big ones compete for the top slot, some think that working together toward a multichain world could be the answer to the bigger problems in the space.
“A multichain world makes it much easier for us to start moving the technology forward,” Grace Torrellas, VP of product and product lead at Polygon zkEVM, said during a panel at TechCrunch Disrupt 2023. Polygon is a layer-2 blockchain, which means it’s focused on scaling, in this case, the layer-1 blockchain Ethereum. “We are building an ecosystem of multichains that will be interoperable.”
Mo Shaikh, co-founder and CEO of layer-1 blockchain Aptos Labs, agreed. “I do think it’s a multichain world for sure. I think we’re starting to see the deep work that all of us have done really come to fruition.”
While that may be a view some blockchains have, others don’t feel the same.
“To keep things spicy, I’ll say there’s going to be a single chain,” said Anatoly Yakovenko, co-founder and CEO of layer-1 blockchain Solana, explaining that there’s going to be a single execution environment, so it won’t really matter how many other settlement environments there are. “It doesn’t matter which bank USDC actually settles in, but what matters is where all the peer-to-peer or merchant-to-consumer transactions occur.”
Stressing that he’s not saying so only to be a contrarian, Yakovenko added it’s a real possibility because the main purpose for blockchains today is to move all crypto transactions, and a large portion of financial transactions, into one “single unified layer-1” chain.
“Within 20 years, we are going to see 1,000x improvement in hardware, so we’re gonna see 1,000x more capacity on a layer-1 that’s a single giant atomics state machine,” Yakovenko added. “So you can imagine that you can fit everything into one place, and usually, things are cheaper and faster and kind of more composable when they’re in one place.”
While having everything in one place sounds nice, I think it could be a bit too . . . unified. Let’s take Google as an example: Sure, we use Google’s search engine, email, cloud storage and other services, but I don’t want it to be my banking app, too. We look to Google for a number of things and use other companies’ products for others . . . and that’s okay.
It’s important to make sure that each chain offers a use case that is well prepared for that particular chain, Torrellas said. “I feel like that’s where the users will have better possibilities to interact in a blockchain space or in web3 space. Not just thinking about how I can bridge assets to this network versus another network, but just going there and having a seamless continuity within the network. We call it an unlimited blockspace.”
An example of such a focused blockchain is Sei, a layer-1 blockchain that’s focused on trading and not built as a general-purpose network that developers can build on top of. The team at Sei comprises former employees from Goldman Sachs, Databricks, Robinhood, Google and Nvidia, which is fairly fitting given the chain’s focus.
Enterprise growth
Whether or not one believes blockchains should be focused on a multichain world, we’re seeing multichain integrations happening at both crypto-focused companies and mainstream big name brands.
“I do think that distribution from large enterprises has been interesting; they’ve all dipped their toes, they’ve all experimented in previous protocols, but they just don’t feel comfortable with the infrastructure being where it needs to be,” Shaikh said. “We’ve seen hints of product-market fit in some applications, but nothing has actually been sustainable for the long term.”
This is where leaning into enterprises makes a lot of sense, he added.
In the payments space, MasterCard has teamed up with a number of blockchain-focused foundations like Aptos, Polygon and Solana to bring the set of standards to developers in each ecosystem. Aptos has integrated its technology with companies like Microsoft, NBCUniversal and Coinbase Pay to grow its ecosystem and improve technologies for those businesses. And last month, Solana integrated its plug-in with Shopify to offer USDC payments.
“I think the industry has gotten a lot better with its attempts to build credible things that get to market, to consumers,” Yakovenko said.
Polygon is no stranger to big brand adoption either. It has partnered with brands like Disney, Reddit and Starbucks, to name a few, which expands the blockchain’s exposure to a bigger demographic while also potentially making the technology more accessible. “Enterprise partnerships are big at Polygon, and this is something that has made us really just go over that sort of chasm,” Torrellas said.
As more large enterprises enter the crypto space, there’s potential for “not only millions of users, but billions of users using web3 without having to even realize it,” Shaikh said.
The next wave
Looking to the future, some companies are wondering whether the next big killer use case and mass adoption will come from a crypto-native company or through a big brand adopting the technology.
The general sentiment from the panelists was that it would be the former.
“I generally focus on crypto-native companies to be the disruptors,” Yakovenko said.
Torrellas echoed that comment: “I think the next wave of disruption is definitely going to be within crypto. There isn’t an appetite for traditional companies or web2 companies to change their business models too much.”
Indeed, that’s where it seems likely for blockchain technology to come in. Why would a company like Disney craft its own blockchain infrastructure when it can easily use a network developed by professionals within the industry?
That’s not to say enterprises aren’t thinking about it, though.
“We do feel there is interest in enterprises bubbling up in a very aggressive way in the background,” Shaikh said. “It may not appear that way today, but there are companies that are building some very interesting products that I’d love to talk about in the future.”
The companies, whether in the crypto space or not, that will take the lead will be the ones that disrupt themselves, Shaikh said. “Think about Netflix. They used to mail DVDs to your house and they realized this doesn’t work.” The company could have flatlined or collapsed, but instead it changed its model and now has a market cap of $170 billion.
“Large enterprises are absolutely willing to disrupt themselves,” Shaikh added.
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