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Ethereum [ETH] wouldn’t be where it is today without infrastructure like Infura, MetaMask & Truffle, says Felix Feng




Ethereum wouldn't be where it is today without infrastructure like Infura, MetaMask & Truffle, says Felix Feng
Source: Unsplash

Felix Feng, the Co-founder and CEO of SetProtocol, recently elucidated the reason why cryptocurrency projects usually chose Ethereum, a leading smart contract platform, over other smart contract blockchains, including Proof-of-Stake chains of players such as Tezos and Tron Foundation.

Feng stated on Twitter that one of the most frequent questions he’s asked was whether SetProtocol would be built on other chains. The CEO stated that there were several factors, such as developer infrastructure, decentralized exchange infrastructure, standardized token standard, non-volatile asset, and oracles, influencing the decision.

Under developer infrastructure, Feng commented that Ethereum would not have reached the point it has today, without infrastructures like Infura, MetaMask, and Truffle. He added that the leading blockchain had “an ecosystem of other tools that make a smart contract,” and enabled DApp development. This was followed by Feng speaking about teh projects which “mimic” the Ethereum Virtual Machine. He said,

“[…] it’s possible to simply copy/paste your smart contract code and deploy the bytecode generated by truffle. However, it gets a lot more challenging when existing tools are incompatible, and you have to think about underlying blockchain assumptions.”

He further stated that building tools “slow down development significantly”. For this, he cited the example of projects like MakerDAO and Augur Project which took years to launch, contrary to projects like dYdX Protocol which only took months. Feng also commented that MakerDAO and Augur contributed “greatly” to the Ethereum ecosystem. He went on to state,

“Also, an understated consideration is security. Projects such as the DAO and @ParityTech have provided precedent for common security issues. If you build on a new chain, you risk being the guinea pig for a new bug. And, good luck finding an auditor to review your code.”

The CEO also spoke about the second factor, decentralized exchange infrastructure. He stated that SetProtocol relied on “solid decentralized exchange infrastructure”. This included infrastructures like Kyber Network, Uniswap Exchange and Ox Project, enabling users to gain access to the token “without a trusted counter-party”. He said,

“Not only does the infrastructure / APIs need to be robust and solid, there must be sufficient liquidity between the main trading pairs that Set’s strategies include.”

Under standardized token standard, the third factor, the CEO stated that a token standard, agreed upon by the community and which enabled protocol compatibility was “an under-appreciated requirement”. He added that it was important for a developer to build features without worrying about “incompatibility with other systems”.

The fourth factor was non-volatile assets, which was about stablecoins. On this, Feng stated that stablecoins were “vital for proper functionality” of several financial applications, including payments, lending, margin trading, and non-correlated base assets. He added that “without projects like MakerDAO and Dai – we wouldn’t be able to build certain strategies”.

He went on to state,

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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.


Coin Metrics data reveals inaccuracies in Kik’s claim of being as dominant as BTC, ETH blockchains




Source: Pixabay

Upon investigating Kik’s claims in response to SEC’s lawsuit filed earlier this month, CoinMetric data reported inconsistencies in the on-chain activity and adoption rate of its native token, Kin.

In a study dubbed, “An Analysis of Kin’s On-Chain Activity,” the crypto-asset elaborated on the two assertions made by Kik in its letter to the US Securities and Exchange Commission.

Kik’s first claim was regarding its blockchain activity. Its in-house token, Kin, supposedly exceeded Ether and Bitcoin to record the fifth highest daily blockchain activity. This was debunked by CoinMetric’s investigation after taking into account its “Operation Count” [the same metric used by Kik to support their claim] and “Transfer Value.”

In terms of the Operation Count, the report explained,

“According to Kik’s source for the metric, “blockchain activity” is defined as “the number of operations on the blockchain in the last 24 hours.” Operations are broadly defined as any type of action that could be recorded on chain. But operations are not standardized across blockchains which makes comparing across chains difficult.”

Besides, drawing parallel comparisons across blockchains with radically different use cases and operations is difficult.

Although Kik’s original research showed a high number of account creations, Coin Metrics data revealed that many of these accounts were empty.

Additionally, Kin’s “create account” operation has a fee of .001 Kin. The report highlighted that a metric such as “operations count” for the purpose of blockchain activity cannot be used as a measurement tool since Bitcoin and Ethereum blockchains do not track account creations on-chain.

In terms of Transfer of Value, the report elaborated,

“Theoretically, high daily transfer value should signify high activity. But transfer value is often quite noisy, especially on low fee blockchains where there are minimal costs to sending transactions. Some transfers might simply be users moving money around between addresses they own”

Instead, Coin Metrics contrived “adjusted transfer value” metric to eliminate what it called, “noise and certain artifacts like self-sends, or deliberate spammy behavior.” Coin Metric noted that this gives a clearer picture of the on-chain activity, resulting in a decreased transfer value when compared to other blockchains, even if it had a high number of daily blockchain operations.

Additionally, Kin’s average transaction value was also low, when compared to other blockchains. For the first claim, Coin Metrics concluded that the Kin platform had more micro-transactions than Bitcoin and other dominant blockchains, while highlighting the fact that the latter blockchains are not primarily used for such transactions.

Regarding Kik’s second claim that said that over 300,000 users were earning and spending Kin as a currency, Coin Metrics assessed its blockchain usage. The number of addresses is not necessarily equal to the number of users since a single user could have multiple addresses. Hence, Coin Metrics took the number of active users into account, which the report defined as “the number of unique addresses that were active in the network [either as a recipient or originator of a ledger change] during that day.” The report noted,

“Kin 2 has significantly more originating active addresses than Kin 3. Although Kin is in the process of migrating to Kin 3, it appears that Kik is using data from the Kin 2 chain to support their claims about usage.”

Further, Kin 2 and Kin 3 had more active addresses that received payments than originated payments, which meant that there were more “earners” on Kin than “spenders,” also noting that only 35,000 addresses held over 10,000 kin [nearly $0.23]. The report added that the figures are lower than other blockchains which have a minimum of 1,000,000 addresses with at least $1.

After examining multiple critical aspects, Coin Metrics concluded that Kin fell below dominant blockchains in terms of daily active addresses, despite maintaining steady growth. It said,

“A majority of Kin’s active addresses have small account balances. While this makes sense for a network built around micropayments, when viewed across multiple metrics, our data show that Kin is not more widely used than dominant chains such as Bitcoin or Ethereum.”

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