Thread by @adrian_brink, Both models are weak in the long-run, since interoperability and validators as [...]

Both models are weak in the long-run, since interoperability and validators as a service aren& #39;t a moat and extracting value from them doesn& #39;t work.

I& #39;ll unroll my thoughts on both models:

1/18 https://twitter.com/RyanWatkins_/status/1384289142863892486">https://twitter.com/RyanWatki...

https://twitter.com/RyanWatkins_/status/1384289142863892486

Polkadot has a very clear technical offering for parachains. It provides a validator set and the ability to communicate with other parachains. And for those two benefits it charges them rent.

2/18

Cosmos will have effectively the same offering. It allows chains to communicate with each other and it seems that starport allows renting a validator set.
https://twitter.com/zcpeng/status/1384292606876680198

3/18">https://twitter.com/zcpeng/st...

https://twitter.com/zcpeng/status/1384292606876680198

The two things both chains are selling (or want to sell in the future) are:
1. Validator set
2. Communication with other chains

These two things are both commodities which are trivial for competent teams to create themselves.

Let& #39;s start with interoperability.

4/18

Interoperability isn& #39;t a moat. A lot of chains are positioning themselves like AOL did in the early days of the internet. Come to my interop solution and you& #39;ll be interoperable within my walled garden, and only my walled garden.

But ...

5/18

a protocol like IBC doesn& #39;t require a hub. Modern BFT chains will do p2p routing because it& #39;s the model that requires the least amount of trust. In it you trust the source zone of the asset, and the chain you have the asset on. With a hub you also have to trust the hub.

6/18

Of course this only applies to modern chains with efficient light-clients. For legacy chains (Ethereum1, Bitcoin, ZCash, Cardano, ...) a hub makes sense to translate legacy tech to modern BFT. This is probably a good place for the Cosmos/Polkadot hub to add a ton of value.

7/18

Fundamentally it is important to understand that IBC which is by far the best interoperability protocol isn& #39;t a value capturing protocol. It& #39;s like TCP and doesn& #39;t special case any specific chain. The reality is going to be that Near will connect to Solana via IBC directly.

8/18

As a side note, because even prominent VCs that I talked to didn& #39;t understand / know this. IBC isn& #39;t specific to the cosmos-sdk. Any chain can implement IBC in any language as long as it& #39;s efficient light-clients on either side.

9/18

Now coming to Polkadot interoperability. It& #39;s a slightly less general model than IBC, because it makes the assumption that all connected chains are secured by the same validators (it& #39;s effectively the same as Eth2).

10/18

It may have some lower latency, as in transaction can cross between chains on the same block, but even with IBC that latency is at most 1-2 blocks (~10 seconds).

11/18

In concl. on interop. It isn& #39;t a moat except for bridges to legacy chains. All modern chains will connect to each other point to point because it& #39;s the model with the least points of failure. Interop protocols don& #39;t capture value; they& #39;re like TCP or UDP (just a standard).

12/18

Now let& #39;s quickly tackle purchasing a validator set. A competent validator set is a commodity. There are 100s of excellent organizations that will secure any chain as long as they can make money.

13/18

There isn& #39;t going to be a single best validator set, because all chains are at this point secured by the same validators without any cross-chain validation. It adds complexity where there is no need for it.

14/18

In conclusion on the whole thread. Interoperability and Validator Set are both commodities. Chains for which these are the only features aren& #39;t going to capture large value to the underlying asset (outside of course speculation by the unknowing).

15/18

Generally chains will need to offer useful things to assets on top of them. State machines will compete on things like:
- private transfer of value
- computational speed and efficiency
- cost of execution

16/18

- locality of the chain (Berlin chain and Shanghai chain)
- ability to trade complex objects
- ability to trade privately
- providing access to legacy assets
- and lots of other things

17/18

I& #39;m writing a blog post to go in-depth how interoperability between chains and ecosystems (hint: there aren& #39;t going to be multi-chain ecosystem) will look like in a world of modern BFT chains. It should be ready sometime next week.

18/18

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