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Talking points
Let’s start here. I made this point in a recent episode about blockchain based social networks.
We know that Metcalf’s law exists, the idea that the value of any network is the number of participants squared.
That’s why Facebook has an effective monopoly. The value is in the size of their network and the number of connections.
That’s why the Internet is the dominant global network. How are you going to get enough people to switch to your new Internet? It’s unlikely.
In the episode on blockchain based social networks though I spoke about how Metcalf’s law is still establishing itself in the world of blockchain based social media.
First off, in the blockchain world, there are general purpose networks and then there are special purpose networks.
So there isn’t yet one network to rule them all with a dominant network value according to Metcalf’s law.
More than that, the special purpose area of social media blockchains, there are multiple candidates within that.
So this brings us onto today’s topic of multi-chain decentralised apps.
My take is that app developers are fully aware of the circumstances I just laid out and are trying to avoid their success depending on picking the winning network.
The current trend seems to be towards multi-chain apps, that is apps that run on multiple networks simultaneously.
However, and here’s a question, doesn’t each app have a special unique instance of itself on each network?
Take Aave for example, you could say that is a multi-chain app because it runs on Ethereum, Polygon and Avalanche, but the list of assets and the liquidity are not shared.
Not sure what the solution to that is.
I saw talk the other day about a tool that would allow you to migrate your liquidity from one Aave instance to another.
At the moment I’d have to use an external bridge to move my assets from Ethereum Aave to Polygon Aave.
That makes me think that MetaMask really needs to integrate such a feature.
What are some other examples of multi-chain apps?
How many chains do we need?
Doesn’t Metcalf’s law dictate that over time the number of chains will be reduced?
Even if a special purpose chain has amazing tech, it may lose out to Metcalf’s law based on network value imbued by the users.
Tell the Rob Miles story of “How hard does a hoover need to suck?” If the user doesn’t perceive the value, it doesn’t have value.
What are the benefits of multi-chain apps to the users and investors?
For token holders it reduces the risk of being outcompeted by better performing apps on other networks.
For users it means the apps come to them.
If you just want to stick to using the Polygon network, you can.
What’s an investor to do in the light of multichain apps?
You’d think it a safer bet to buy the network token, rather than trying to pick a winning app
When it comes to multichain apps however, the power dynamic is reversed since the app is what is attracting the user and the network is simply providing the infrastructure.
Is this eventually going to turn the networks into a commodity?
▶️ 3Speak