Derek Yoo From Moonbeam Believes Someone Had to Do Something About Ethereum’s Gas Prices

Derek Yoo From Moonbeam Believes Someone Had to Do Something About Ethereum’s Gas Prices

Moonbeam, with a website that looks like something out of a detective novel, is a highly specialized Layer 1.5 chain, Ethereum-compatible developer platform targeted to Ethereum and Solidity developers. It is also a parachain on the Polkadot, which means it benefits from the shared security and interoperability that the Polkadot network provides. Many chains are pursuing a multi-chain deployment strategy which often includes deployments to Ethereum and also on BSC and Moonbeam.

Moonbeam extends the base of Ethereum’s feature set with extra features such as on-chain governance, staking, and cross-chain integrations. The full package. According to the CEO, Derek Yoo, somebody had to do something about the impracticality of Ethereum’s main challenges.

Derek Yoo

We spoke to Derek Yoo from Moonbeam to discover their angle.

IM: Hi Derek, what is Moonbeam all about?

Given the sometimes outlandish gas prices, projects are motivated to find an environment with cheaper transaction fees. We aim to provide the easiest development environment and the richest set of developer integrations on Polkadot. By making it easy for developers to build on Moonbeam, we are able to attract and onboard new and existing applications to the Polkadot ecosystem very quickly, which promise transactions at a snippet of the cost.

IM: Why are developers looking for different solutions outside of the Ethereum chain?

We have been talking to a lot of Ethereum based projects and protocols. At this point, a majority of projects are looking to expand via a multi-chain deployment strategy. Our value proposition for these projects is that they can use their existing Ethereum codebase, and with minimal-to-no changes deploy it to Moonbeam, and in doing so have a Polkadot based deployment. Projects are interested in having Polkadot based deployments to be able to serve different users and use cases than they are able to serve on Eth mainnet. And at the same time they are interested in access to Polkadot based assets, and to be a first mover in this new and quickly growing ecosystem.

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IM: What advantages can building with Moonbeam bring?

Moonbeam is designed to simplify the experience for Ethereum developers as they expand to Polkadot. This has a few key components:

Minimal Codebase Changes: if you have an existing contract, it will work right away with no need to rewrite or reconfigure Language Support: write smart contracts in Solidity or anything that compiles to EVM bytecode Use Existing Tools and dApp Front-Ends: connect popular tools like MetaMask, Remix, and Truffle via a complete set of Web3 RPC endpoints. Use well known Javascript libraries such as Web3.Js or Ethers.Js. Core Developer Integrations: integrations with the most-requested developer tools and services like APIs (The Graph, Biconomy, Covalent, OnFinality), assets (Ocean Protocol), bridges (ChainSafe, Interlay, and an NFT bridge in the works), DeFi protocols (SushiSwap, IDEX), oracles (Chainlink, Band Protocol) and many more. Unified Accounts, Addresses, and Signatures: use your existing Ethereum H160 accounts & ECDSA signatures to interact with Moonbeam

IM: Why would I build on Moonbeam rather than creating my own parachain or parathread on Polkadot?

By far the most important decision a project makes when building on Polkadot is this question of whether to build your own parachain/parathread or whether to build on top of an already existing parachain. Your options are:

Building a parachain which involves using the Substrate development framework that Parity provides to build your own blockchain. This blockchain will connect to the Polkadot relay chain for shared security and cross-chain communication. Building on an already-existing parachain (like Moonbeam) which will largely take the form of building your application using smart contracts, leveraging one of the smart contract parachains that are connected to Polkadot. There are multiple smart contract parachain options available supporting different smart contract programming languages. Building a parathread which are Substrate-based runtimes that run in shared parachain slots reserved for parathreads. They are very similar to parachains from a development and responsibilities perspective. The key difference is that you avoid the upfront cost for the parachain slot, but you need to pay for each block you want included on your chain. So there will be a market-based fee model for transaction inclusion similar to how smart contracts chains work. From an implementation and responsibilities perspective, they are similar to parachains. From a scalability and cost perspective, they are similar to smart contracts, as they execute in a shared environment and the deployment and ongoing transaction costs are smart contract-like.

Many teams just starting out on Polkadot are opting for a smart contract based approach. This makes sense as smart contracts are much easier, faster, and cheaper to implement. This fits well for teams that want to get going quickly and prove out product market fit before making more investments. These teams always have the option of migrating to a full parachain if and when required. In this case they can take advantage of Polkadot interoperability to make this a smooth transition.

Another important consideration is if your project is considering a multi-chain deployment approach. For teams that are pursuing a multi-chain deployment approach, it is almost always the case that Ethereum is one of the deployment platforms. Projects with existing Ethereum-based deployments will naturally tend toward the smart contract approach on Polkadot and working with an existing smart contract parachain. The reason is that by working on a parachain like Moonbeam, they can leverage the same single codebase for both their Ethereum based deployment and their Polkadot based deployment (via Moonbeam). This is much more efficient than building and maintaining 2 independent implementations of their application using 2 different technology stacks.

IM: What is the difference between Substrate and Moonbeam?

Substrate is a Rust-based development framework for building blockchains. It is the technology used to build Polkadot and parachains that connect to Polkadot. Moonbeam is built with Substrate. Developers that want to build a parachain that is directly connected to Polkadot will use Substrate and Rust. Developers that want to develop a smart contract based application can use Solidity and the Ethereum developer toolchain on Moonbeam and use Moonbeam’s parachain implementation to connect to Polkadot.

IM: What kind of projects would you serve best?

Many of the project teams we are supporting are pursuing a multi-chain deployment strategy. Since Moonbeam is designed to ease the transition for Ethereum developers as they expand to Polkadot, the types of projects adopting it are quite broad. See here for a list of projects currently building on Moonbeam: https://moonbeam.network/community/projects/. Projects adopting Moonbeam include DeFi apps and protocols, NFT platforms, and even games. One thing many of the developers working with Moonbeam have in common is a preference for developing in Solidity over Substrate / Rust.

IM: Any launch dates in mind?

Launch timing is very much dependent on parachain availability coming to Kusama and Polkadot, and there are no fixed launch dates for this. Once Parity releases parachain functionality, we plan to first launch Moonriver to Kusama, which we expect in the next two months. Later this year, we expect to be able to launch Moonbeam to Polkadot.

Ethereum co-founder on why he got into crypto: Empower the little guy, ‘screw’ the big guy — ‘they already have enough money’

Before Vitalik Buterin co-created Ethereum, he first learned about bitcoin in 2011, when he was 17 years old.

Initially he dismissed it, but Buterin eventually connected with the idea of bitcoin after a second look, he told Wired in 2016. Like many bitcoin evangelists, Buterin, a Russian-Canadian programmer, was curious about the decentralized payment system.

Back then, “I had a much more cartoon mentality,” he told Wired.

“I saw everything to do with either government regulation or corporate control as just being plain evil. And I assumed that people in those institutions were kind of like Mr. Burns [on “The Simpsons”], sitting behind their desks saying, ‘Excellent. How can I screw a thousand people over this time.'”

Though his take on good and evil “substantially updated” as time went on, he told Wired, Buterin still felt motivated to get involved with bitcoin to adjust the balance of power between “the big guy” and “the little guy.”

“I think a large part of the consequence is necessarily going to be disempowering some of these centralized players to some extent,” he said in 2016.

“Because ultimately power is a zero sum game. And if you talk about empowering the little guy, as much as you want to couch it in flowery terminology that makes it sound fluffy and good, you are necessarily disempowering the big guy. And personally, I say screw the big guy. They have enough money already.”

It’s a mindset held by many who were drawn to the crypto space early on — and is especially relevant now.

Meme stocks and cryptocurrencies have become prevalent this year, with many in the space citing the same opinion Buterin talked about. Starting in January, retail investors on Reddit planned to help drive the price of GameStop stock after it was bet against by Wall Street hedge funds, calling their campaign as a “great wealth redistribution.” Since, cryptocurrencies like bitcoin have reached record-highs with supporters rallying behind the decentralized system.

“I thought [bitcoin] was something really interesting,” Buterin told Business Insider in 2019. “I started getting into the community more and more.”

Seeing value in the space, Buterin co-founded Bitcoin Magazine in September 2011 while in college. There, he became an expert on bitcoin and learned what could make the blockchain better.

In May 2013, Buterin attended a bitcoin conference that convinced him to pursue development of the cryptocurrency full-time, and by the end of the semester, he had dropped out of school to do so.

For six months in 2013, Buterin traveled around the world to meet with bitcoin developers. He realized that he could iterate on the bitcoin blockchain to create a new, potentially better, one.

Bitcoin had “too limited functionality,” he told Business Insider.

To explain his thinking, Buterin compared bitcoin to a pocket calculator and a new potential blockchain to a smartphone.

“A pocket calculator does one thing and it does one thing well, but really, people want to do all these other things. And if you have a smartphone, then you have a pocket calculator as an app,” he said. “So basically, taking that same kind of idea of increasing the power of the system by making it more general purpose and applying it to blockchains.”

As a result, he came up with Ethereum, the blockchain that powers the cryptocurrency ether. (He wrote its white paper in November 2013 when he was just 19.)

Bitcoin is known for its peer-to-peer payment system, whereas Ethereum is capable of more than solely transactions — it can power and build decentralized applications, like financial tools and social media platforms, along with NFTs, or nonfungible tokens, due to its smart contracts.

“When I came up with Ethereum, my first first thought was, ‘OK, this thing is too good to be true and I’m going to have five professional cryptographers raining down on me and telling me how stupid I am for not seeing a bunch of very obvious flaws,'” Buterin told Wired in 2016. “Two weeks later I was extremely surprised that none of that happened.”

Today, ether is the second largest cryptocurrency after bitcoin and has a current market value of over $400 billion.

Buterin recently became the world’s youngest crypto billionaire at 27. On Wednesday, he donated over $1 billion to the India Covid-19 Relief Fund and other charities.

A representative for Buterin declined CNBC Make It’s request for comment.

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Don’t miss: Mark Cuban: The 3 ways Ethereum ‘dwarfs’ bitcoin

Is the Bitcoin-Ethereum ‘Flippening’ a Likely Scenario?

It has been a bad week for the crypto space. Elon Musk is widely believed to play a major role in crashing Bitcoin’s price by $12k when he tweeted that Tesla will no longer be accepting Bitcoin. He framed this backtracking as an environmental concern due to the high levels of energy consumption required in Bitcoin mining. As a result, this had a cascading effect on almost all altcoins with very few exceptions.

To set the record straight, it is very difficult to portray Bitcoin as an ecological problem. Not only do miners use renewable sources at a rate over 70% across all continents, but when put into context with other sectors, Musk’s notorious tweet makes even less sense.

Source: Hass McCook Medium

Based on this, The situation has resulted in a number of different ideas floating around as to why Musk made this decision. Some argue that the U.S. government could be the motive behind the move, as BTC could potentially threaten the USD. Remember that Musk has plenty of dealings with the government – subsidies, green credits, and a SpaceX contract. Musk, afterall, is known to leverage nearly $5 billion in government subsidies. This substantial vested interest may have exerted enough pressure for him to abandon and besmirch the predominant cryptocurrency. No doubt, his 54 million followers will remember how corrosive he has become, eroding the wealth of millions. Interestingly, the creator of DOGE, the dog coin Musk has been bizarrely obsessed about for the last half year, had no kind words to share.

In this turmoil, it is noticeable that Bitcoin brought down much of the crypto sector with it, demonstrating once again it’s gravitic force on the crypto ecosystem. However, what is also noticeable is that some projects have gone up, and they are all related to smart contracts. Cardano (ADA) is a highly anticipated direct competitor to Ethereum, promising more scalability and smart contracts with the Alonzo upgrade.

Ethereum is fast-closing to its full Proof-of-Stake (PoS) transition with the upcoming London hard fork. Together with Binance Smart Chain and Polygon (Matic), they have all outperformed Bitcoin during the last month, in terms of percentage price gains when paired with USD.

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Matic vs Ada vs ETH vs BTC performance (source: TradingView)

Although the current crypto downturn is significant, it bears exploring what this shift in trends means for the relationship between Ethereum and Bitcoin. More precisely, is it likely that Ethereum and Bitcoin will switch places? In other words, are we about to see the “flippening”?

Ethereum and Bitcoin Complement Each Other

If one were to describe the two largest cryptocurrencies by market cap – Bitcoin and Ethereum – the former is the guardian of wealth while the latter is a utility juggernaut. Bitcoin’s own utility is quite limited in scope. It can serve as a payment method, but it has instead become a store of value, with Bitcoin Cash (BCH) and Litecoin (LTC) taking the lead as more suitable crypto payment methods.

As you can see on the chart below, out of the four cryptocurrencies, Bitcoin and Ethereum are aberrations in terms of average transaction fees.

BTC vs ETH vs LTC vs BCH transaction fees (source: bitinfocharts.com)

Outside of being more popular, Bitcoin owes this drastically higher transaction fee, compared to BCH and LTC, to its block size of only 1 MB. This design decision cleared the way for the phenomenon of Bitcoin “hodling”, making it a digital asset akin to gold that draws its value as a hedge against inflation.

On the other hand, Ethereum’s 76% higher fee than even Bitcoin should be a thing of the past by the year’s end. Ethereum is slowly progressing from the less scalable Proof-of-Work consensus toward Proof-of-Stake, leaving behind congestion and enormous transaction fees. This transition did not come free of cost.

Binance Smart Chain stepped in to fill the congestion gap, achieving 600% more daily transactions than Ethereum during the same period. Such a surge in popularity from a direct competitor speaks of the treasure Ethereum holds – smart contracts. In contrast to Bitcoin, Ethereum’s blockchain is highly flexible, able to store auto-executable contracts within its data blocks. All those exorbitantly expensive NFTs that paraded across news headlines this year were mostly hosted on Ethereum.

Likewise, lending and borrowing protocols – Uniswap, Maker, Aave, Compound, and dozens of others – accumulated $75.6 billion in total value locked (TVL).

These DeFi dApps demonstrate on a daily basis that they can replace much of the existing banking infrastructure, which brings us to the key value propositions Bitcoin and Ethereum play:

To borrow a metaphor from the world’s most popular office app, think of Bitcoin as an Excel spreadsheet. This secured and distributed record tracks the number of Bitcoins in each cell.

Ethereum has the ability to do the same and beyond. Instead of just recording the number of crypto coins in each cell, Ethereum can build macros that interact with formulas among other cells.

However, the cost of Ethereum’s greater flexibility is vulnerability. While there hasn’t yet been a documented instance of Bitcoin’s blockchain getting compromised, the same cannot be said of the protocols built on top of every blockchain—and Ethereum has a lot of those. Flash loan attacks are the most common attack when it comes to Ethereum’s smart contracts, incurring great losses.

We have yet to see how Cardano performs when it unrolls its smart contract capability. This leaves Bitcoin in a special position that is not likely to be unseated. Together with its deflationary mechanism, limited coin supply, and incredibly strong network security, Bitcoin represents a peace of mind that no smart contract-enabled blockchain has yet to achieve.

Ethereum Is Entering Bullish Territory

With BSC getting six times the traffic of Ethereum, one has to ask which one is likely to be The programmable blockchain. While Ethereum’s ongoing ETH 2.0 upgrade and still-high fees leave it wide open to competition, it has powerful winds behind its sails to eventually win the smart contract wars:

Ethereum holds (by far) the largest pool of developers, according to Electric Capital. As a number of open source dev ops tools are available to make remote work easier through collaboration, managing developers remains a serious cog in DeFi development. Yet Ethereum and its developer community have thus far been dominant in this sense.

In the last three years, Ethereum has widened its developer pool by 215%. Such a network effect would be exceedingly difficult to overcome.

Ethereum is far more decentralized compared to BSC, by magnitudes of degree – there are 21 validators on BSC compared to over 70,000 on Ethereum.

Ethereum continues to hit record low ETH token supply on exchanges, indicating that BSC popularity is transitory.

In other words, all those ETH hodlers are just waiting for Ethereum’s 2.0 transition to proof-of-stake to finalize.

DeFi smart contracts hold almost twice as much locked ETH than centralized exchanges do, once again indicating high demand for Ethereum’s smart contract service.

Alongside BSC, Polkadot, Cardano, Near Protocol, and Solana are Ethereum’s top competitors, all of which have also grown substantially. Nonetheless, Ethereum has another trick up its sleeve – Polygon (MATIC). Until the ETH 2.0 upgrade completes, Matic is there to remove the congestion as a multichain scaling solution. Simply put, Polygon makes cheaper transactions possible by using Ethereum’s sidechains, which are called Layer 2 solutions.

Suffice to say, Polygon has become tremendously successful in facilitating this goal. As people try to flee high fees, Sushiswap, the competitor to Ethereum’s most popular protocol – Uniswap – managed to accrue over $350 million in TVL since it announced it will launch on Polygon. A couple of days ago, the sum increased to half a billion.

Overall, the Polygon network is currently lagging behind Uniswap by one rank, with $5.78 billion TVL compared to Uniswap’s $7.13 billion. As far as investments go, this makes the network’s native token - MATIC - enter into the 100x investment range.

(Source: TradingView)

Interestingly, one of the trending searches related to Dogecoin (DOGE) is – “will DOGE ever reach one dollar?”. Once again, the contrast between DOGE and MATIC demonstrates that fundamentals always trounce meme hype (DOGE) over the long haul.

Ethereum Is Poised to Go Up, but Not Over Bitcoin

No matter how much Ethereum is viewed as the infrastructure for digital finance, it still remains untested, with a history of smart contract hacks. While not all of this is directly Ethereum’s fault, it still affects Ethereum. On the other hand however, this cannot be said of Bitcoin. It may not be as exciting as facilitating dApps, but Bitcoin’s draw as safeguarding wealth cannot be over underestimated.

Moreover, Bitcoin is inherently deflationary, unlike Ethereum which relies on high demand to outpace inflation. This demand may bring it to a new ATH this year, but not in the Bitcoin range. As far as Bitcoin’s carbon footprint goes, this is largely a matter of perception.

Given the activity on social media, that perception is turning against Elon Musk. After all, the data is already clear that most Bitcoin miners use clean energy. In turn, this data is also clear to those who absolutely trounced Musk on Twitter, including the owner of Twitter himself – Jack Dorsey.

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