<\/p>\n
The utopian vision of thousands of blockchains happily running alongside and interacting with each other in an interconnected multiverse is becoming less likely, it seems.<\/p>\n
And while the rollup thesis appears to be replacing the appchain narrative of entities like Polkadot and Cosmos, Zee Prime Capital partner Fiskantes says, \u201cit\u2019s still the same thing,\u201d ultimately.<\/p>\n
\u201cThe architecture, the structure is almost the same. It\u2019s just, now we call it rollups, and it\u2019s on Ethereum.\u201d<\/p>\n
Whether its appchains or rollups, Fiskantes says he doesn\u2019t see a future where thousands of chains will crowd the DeFi<\/a> landscape. Even if it is trivially easy to spin up a rollup or appchain for any purpose, the friction of switching between them<\/a> and infrastructure costs will be too high to justify, he says.<\/p>\n But \u201cthe jury is still out\u201d on how it all resolves, he admits.\u00a0<\/p>\n Read more:<\/strong> Would Uniswap be better off on its own appchain?<\/a><\/p>\n On the Lightspeed podcast (Spotify<\/a>\/Apple<\/a>), Fiskante proposes a more likely scenario that appears to be playing out right now among the industry\u2019s leading companies. \u201cIf you own the front end\u2026and then you own the blockchain infrastructure, of course, you can use all kinds of middleware.\u201d<\/p>\n This \u201cmoat-building\u201d approach restricts composability, he admits, but many<\/a> projects don\u2019t seem to mind the trade-off. In fact, it could be beneficial to them in the end, he says.\u00a0<\/p>\n Unlimited composability creates an \u201calmost unlimited attack surface\u201d he argues, adding that the benefits are not as great as the potential risks it introduces. So many things can go wrong with components that are permissionlessly built on top of an open-ended project, he says.<\/p>\n Fiskante suggests a more likely scenario is one in which many \u201csiloed\u201d ecosystems offer competing versions of similar services.\u00a0<\/p>\n During the DeFi summer of 2020<\/a>, everyone was hailing the concept of various interconnected DeFi blocks symbiotically functioning together as a sort of \u201cLego castle<\/a>.\u201d Now, he says, most surviving projects are competing with each other by integrating vertically or horizontally, building components that already exist elsewhere for their own ecosystems.\u00a0<\/p>\n \u201cA good example of this is Frax<\/a>,\u201d he says, \u201cwhere they are trying to do LSDs and stablecoins and everything themselves<\/a>.\u201d Companies like Curve<\/a> and Aave<\/a> are also creating user moats, building their own stablecoins to compete with Maker<\/a>, he adds.<\/p>\n \u201cEverybody is trying to do everything at this point because they realize that they are not actually building Lego pieces,\u201d he says. \u201cThey are building their own little empires and they want to expand their borders as fast as possible before they are saturated.\u201d<\/p>\n The one possible exception to the trend is the integrated ecosystem of Solana<\/a>, Fiskante says. But even there, he notes, \u201cthey will need to work really hard to maintain the performance of the chain if there are so many different things being built on it that will compete for block space.\u201d<\/p>\n \u201cOf course,\u201d he says, \u201cthey have parallelization and other tools to deal with that.\u201d But even with the techno-wizardry of parallelization, a phenomenon known as the Jevons paradox might hold things back anyway, he suggests.\u00a0<\/p>\n \u201cThe more you enable new activity by scaling the infrastructure, the activity will scale with it and will always capture the free space that you enabled.\u201d<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nExpanding borders<\/h2>\n
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