What Makes a Smart Contract Platform “The Best”?
I'm a blockchain security specialist and writer living in NY.
The question of “what makes the best smart contract platform” really depends on who’s asking it as there are many variables which will taken into account or not depending on who is asking the question. An investor will usually only consider the value of the underlying token, which isn’t necessarily an indicator of “the best.” As we know by now, token prices can rise and fall in minutes off the back of rumors and speculation. Just look at the value of Tron
each time Justin Sun ends up in the press.
Users, developers, and anyone interested in the long-term future of a particular platform or application will have to dig a little deeper to answer the question of what makes a platform great. While there’s no exact scientific answer, there are a few indicators that can help in shortlisting the likeliest candidates.
Number of dApps
Of course, anyone can be working behind the scenes, but the number of applications on the product is a powerful indicator of a platform with longevity. In this scenario, Ethereum wins out. According to State of the Dapps
at the time of writing, it currently has over 2,500 active dApps running on the platform, compared to runner-up EOS with a little under 300
However, in assessing smart contract platforms, this indicator shouldn’t be taken in isolation. Firstly, Ethereum has been around longer than any of the other platforms, having launched in 2015. Secondly, as Ivan Golovko, CMO of LTO Network
“Number of dApps simply shows the number of service providers who funnel users. This is, of course, important, but does not guarantee there are any users.”
and he explains further that:
“It depends on what your platform intends to do. If it’s focused on smart contracts, which are currently used to programme the exchange of value, which on-chain can arguably only be represented with money - then the metric should reflect the amount of money. A sum of all assets locked up in a contract better demonstrates the value of the underlying platform. For example, DeFi applications, like lending, have at this point over 1.7 million Ethereum locked.”
Number of Developers
Alongside the number of applications and the volume of staked tokens, there’s a compelling argument to support the case that a thriving blockchain ecosystem depends on the developer community that surrounds it. Tal Muskal, CTO at LiquidApps
, certainly holds this view, stating:
"It’s all about the developers. In my opinion, the best measure of a platform’s success is not the number of apps, the transaction volume, or even the number of users, but the number of active developers. Where developers congregate, teams get created, code gets written, brands emerge, apps get built, and public interest follows."
Again, Ethereum leads the pack here, as 18 of the top 20 projects on Github with the most activity are based on the platform. However, it’s another indicator where Ethereum’s longevity plays in its favor.
Along with the number of developers, the quantity and quality of developer documentation and the availability of support is another critical factor, as it will encourage new developers to join the community.
Daily Active Users and Transaction Volume
As Muskal points out above, public interest tends to follow an active developer community. Therefore, the number of daily active users transacting on dApps is also a reliable indicator of acceptance and adoption and should be considered in any argument about what makes a platform truly great.
Currently, games tend to win out in the DAU rankings. Taken together, gambling and games account for the biggest share of transactions across all Ethereum dApps. Overall, this is reflective of the types of dApps available on EOS and Ethereum as the two biggest development platforms.
However, Ethereum’s speed hampers its lead here. While it wins out on the number of daily active users overall, the transaction volume is actually higher on Steem at the time of writing.
Layer 1 vs. Layer 2 Solutions
There was a time when everyone decided they need their own blockchain, and so we now have an ecosystem with literally dozens of development platforms such as Lisk, Waves, Holochain, Tron, Zilliqa and many, many more. However, in some cases, developers have decided they don’t need to reinvent the wheel, building a layer 2 solution on an existing platform instead.
For example, Matic Network
is leveraging Plasma side-chain technology to bring Ethereum up to speeds of 65,000 per second. Building a second layer solution doesn’t just mean that the platform benefits from the underlying infrastructure. Layer 2 projects can also leverage the existing loyal communities and reputation of Ethereum and Bitcoin.
User experience is a difficult metric to quantify, but that doesn’t mean it should be disregarded - especially since it’s a sticking point across most of the major blockchains. In the main, dApp users tend to be those who are familiar with blockchain technology. Unfortunately, UX is currently at a level unacceptable for many mainstream users. For example, to use an EOS dApp, users need to create an EOS account and have some EOS tokens, which is a massive barrier to entry for the average casual user.
Matic currently appears to be the only project out there with a focus on improving this with its Wallet Connect protocol. This protocol connects web-based dApps with crypto assets, enabling users to interact with dApps and sign transactions easily. The Matic team is also investigating the potential of ether-less transactions, in a further big to boost adoption.
None of these metrics should be taken in isolation, but by looking at them in combination, you can make a pretty reasonable assessment of the viability of a smart contract platform. Just as an investor weighs up all the fundamentals of a project, developers, and users as well should look at the big picture before making a decision.
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