Why Sidechains
Within the wider blockchain ecosystem there are various novel smart contract platforms all competing to become the best. From Cardano’s Plutus/EUTXO model, Ethereum’s EVM, Solana’s VM and more, each provides unique tradeoffs that attract developers. Each of these platforms are incompatible with one another, which is why up to this point each L1 blockchain focused primarily on their own solution.
Though many predicted that one smart contract platform would become king and knock out the rest, it is clear today that just like there are numerous programming languages outside of blockchain, there will also be several smart contract platforms within the blockchain space. This means that each L1 chain will inevitably be forced to integrate alternative VMs into their ecosystem, or be left behind as their competitors jump ahead by doing so themselves.
Cardano is well positioned to take advantage of this thanks to the abundance of easy to adopt infrastructure and tooling from the Ethereum ecosystem. The time to market for launching an EVM-based sidechain is one to two orders of magnitude lower compared to Ethereum trying to do the reverse. Thus a slow and academic approach to development of a complex blockchain ends up serving Cardano well in the current landscape, as competitors won’t have the freedom to trivially copy the work already done.
Existing sidechain projects such as Polygon have already had great success in the Ethereum ecosystem and have shown that there is a lot of interest in such projects. The following tables show the explosive growth of Polygon over a single year:
Date
Market Cap of Polygon
July 1, 2020
$66,354,841
July 1, 2021
$3,337,372,561
Date
Number Of Transactions Per Day On Polygon
July 1, 2020
1
July 1, 2021
8,228,730
Date
Number Of Unique Addresses On Chain On Polygon
July 1, 2020
27
July 1, 2021
15,364,049
Given that Milkomeda will expose multiple smart contract VMs to Cardano users over the long term while severely improving the UX, we believe similar explosive growth is possible.
The Cardano ecosystem will inevitably require sidechains to support multiple VMs, thus we believe now is the perfect moment to get ahead of the competition. With Cardano smart contracts being released within the next few months developers are primarily focused on building Plutus dApps or are still focused on Ethereum. Thus we have an opportunity to capitalize on our first mover advantage and build out the first sidechains in the ecosystem via the Milkomeda protocol.
Furthermore, with our novel innovation of wrapped smart contracts, we are bringing a new technology to the table which will allow all of these smart contract platforms to be interconnected in such a way that end users won’t even know the behind the scenes details. Whether a dApp is running on Cardano mainnet directly, on an EVM sidechain, or otherwise, the user will simply interact with the web dApp UI and issue a single transaction from their wallet.
This is something that the Milkomeda protocol is pioneering and will be a key part of the sidechain future which all blockchains are progressing towards. Merely supporting multiple smart contract platforms is a good first step, but without wrapped smart contracts the UX will never be able to compete. Users will quickly realize that jumping between wallets and dealing with multiple chains themselves takes way too many steps, therein causing them to jump ship to an ecosystem that supports wrapped smart contracts natively.
The underlying concepts that inspired the creation of our protocol and its design makes Milkomeda’s value proposition very valuable to any blockchain that doesn’t run the EVM natively. In particular, wrapped smart contracts can quicken the time to market of dApps and protocols for non-EVM based ecosystems while preserving the dApp experience that users have come to know and love.
Last modified 3mo ago
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