I was a very early supporter of IOTA back in 2017 and still am a big fan of the technology behind the Tangle. While our ways parted in 2018, I maintained sporadic contact with developers and fans from the community — one of the most loyal and passionate I have seen elsewhere.
This community is a real, rock-solid backbone — the foundation underneath the Foundation. And I believe it is a real power that kept IOTA going over the years.
However, as with all the good things, there is always a flipside. Passion should never turn into blinding fanaticism. In the same way that patriotism should never turn into exceptionalism. Both unavoidably lead to a skewed perception of reality and dangerous isolationism.
I see Shimmer EVM as a crucial step in the right direction for several reasons.
The future is multi-chain
I have heard this statement again and again over the past two years, and I genuinely believe that this will be the case not only because a single chain would never be able to handle the sheer amount of transactions and data that the future brings but also for other reasons like logical independence.
Imagine there was a global, single chain that existed. Imagine it had side chains and sharding, which allowed it to overcome the storage limitations and grow indefinitely in size and volume. What would happen if the base layer had technical issues or was hacked? It could have a disastrous effect on the decentralized infrastructure dependent on this dominant network.
A multi-chain world with weak dependencies and logical separation from each other makes the whole crypto space sturdier and more anti-fragile.
EVM is here to stay
Being the first adopter, the Ethereum Virtual Machine has attracted the initial developers that contributed to the ecosystem’s growth, which, in turn, attracted more users and more projects. A virtuous circle.
In some way, it can be compared to the early days of smartphones, where different OSes and markets were doing everything they could to attract developers to build on their platforms because more apps in the store meant more users and sales, which would naturally attract even more developers and users.
Once technology is so widespread, it is impossible to ignore it. A new startup will select a technological stack with the most available resources. Chances are higher that such a project would work with Solidity using EVM than, for example, Plutus on Cardano.
And it is hard to replace such a predominant technology with something else unless the alternative is so much better by orders of magnitude. This leads us to the next point.
Ultimately, technology will converge
None of the long-lasting technologies are static. They evolve. And any seeming advantage of one technology is canceled out by the next upgrade of a perceived rival.
One could descend into meta-discussions about how a backend API built in Golang has a three milliseconds advantage in stress-test benchmarks compared to NodeJS. But these discussions seldom affect the end-user.
Does John Doe care that site A opened in 270 ms instead of 250? Does it make a big difference if a transaction is confirmed in 3 seconds instead of 5? The difference in perceived advantage has to be huge for a project to change its preferred technology stack dramatically.
But this is the point where elements of the game theory come into play. Any huge advantage is perceived by any rival who will try to minimize this effect with the next update. No active tech is static, remember. This is evolution.
Hence, all the technology will be able to deliver similar results. Even if there is a slight variance, it will not be enough for an undecided user to go with a lesser-known tech, which comes with additional risks of resource bottlenecks in maintenance and development.
Coming back to the chain technologies, when it comes to tokens and smart contracts, EVM chains are the predominant force, and convincing the market to use anything else could be nearly impossible. Any technological advantage is a short-lived argument.
Transaction fees are a weak argument, too
I am a big fan of free or nearly-free transactions. However, when a chain is deployed on a big scale and runs for decades, the node maintainers ultimately need to cover their expenses somehow — by charging direct gas fees or having indirect benefits, because you need a node to offer a service that you are charging for. In this case, the service would have a markup to offset the expenses of running the node. The end user would pay for the transaction one way or the other.
Hence, ultimately, the (direct or indirect) fees will converge to a similar value that makes the network sustainable while not being overly huge to drive out the user base.
By the way, a chain with a more extensive user base can afford higher network fees without any negative consequences simply due to the network effect.
How to thrive in such an environment
There are almost triple-digit EVM-based chains out there right now. A lot of options to choose from for tokenization and on-chain logic. How to survive and thrive in such an environment, considering that neither the technology nor the fees could be used as an argument for very long?
A chain must make the transition as painless as possible to attract most users and projects. This entails adhering to standards that have established themselves as the predominant ones. That is why EVM support on IOTA is such a big deal. A developer wanting to build something on Shimmer EVM would have a flat learning curve. In most cases, the same code base could be deployed.
Having free and inbuilt tokens and NFT support on the base layer is an excellent feature, but this is a secondary argument for attracting projects. Painless onboarding by using known technologies is paramount. You can always have a token bridge from the base layer to EVM and convince the developer to do neat things with that feature at a later stage. But easy onboarding comes first.
Why is it so important to attract developers (aka projects) first? For the same reason, it was important for smartphones back in 2008 and 2009, as mentioned above. Apps attract users, which attract apps, which attract more users.
See, there are more and more multi-chain projects that operate cross-chain. In a way, the metaverse already spans across and is built on top of many chains, not just a single one. Those projects already live on a higher-abstraction layer than a single chain.
A chain is simply an infrastructure layer that offers logistics, storage, and processing of digital assets. It could be compared to a digital country with its taxes, laws, and road infrastructure.
No country can survive without economic subjects; historically, no country has ever thrived by closing itself off entirely from the outside world. But how does it attract new capital and new subjects? By opening itself up to the world. By aligning itself with a set of international rules and laws. By making the transition for any subject as easy as possible.
So what would happen when the laws were so alien to any newcomer that they would require a massive adaptation effort? What if that country only had waterways and nothing else instead of the usual highways and roads? What would happen if there was no easy way of value exchange with other neighboring countries? It would make it nearly impossible and unattractive for outsiders to consider moving or operating in such an incompatible and detached environment.
Hence, interoperability is the first step that is not negotiable. And implementing an EVM-based layer is the best thing to happen to IOTA. Only second to getting rid of the coordinator. 😉
Now that we have established EVM support’s importance in attracting new projects let’s move on to a more concrete strategy.
Consider a subject already operating on another chain. What could make it move to Shimmer EVM, considering that there are plenty of alternatives and that the technological and financial advantages might not be sufficient, at least not in the long run?
Target cosmopolitans instead of movers
I mean here that the primary focus should be to attract projects already operating on a higher cross-chain level. It is easier to convince such a multi-chain project to add a new chain, especially if it is compatible with the already used technology, instead of moving an existing project completely.
Having a loyal community and barely any competition could suffice as an argument. Throw in a grant or other financial support to facilitate the integration, and you might have a deal.
As for single-chain projects, it would probably be easier to attract fresh startups that have not deployed anywhere than to convince an existing project to move its whole infrastructure. Ultimately it depends on the project, but starting from a blank page is always easier than doing a migration.
In this case, you also have to consider it from the perspective of the subject at hand. Why should a project choose Shimmer over any other network? The community and low competition might play a role. Even some technological perks and advantages might be reason enough, but will it suffice considering the convergence of technology and fees? Or does it make more sense to deploy on a mature EVM network with a far more extensive user base?
Target niches instead of generic subjects
I fear that even with an excellent marketing team, which the IOTA Foundation definitely has, it will be a tough battle competing against the big networks out there. Even if your treasury is full, it has to be spent wisely for the best bang for the buck. I fear that millions could be spent chasing all kinds of projects without much success for the reasons mentioned above:
- Bigger networking effect of the first adopters.
- Technology and fees are not perceived as such a significant advantage.
I think the marketing and community treasury programs should target a narrow set of projects. In the same way that it is easier to introduce a new product in a small market segment than going national or international, which would require tremendous effort and deep pockets that might turn out to be insufficiently deep. If you introduce a food delivery service, for example, it makes sense to launch it in a single city or two and expand from there.
Coming back to the point of first adopters. The actual master move would be to target niches that might not even exist yet. Create the markets. Brainstorm innovative ways to use NFTs, for example. IOTA comes from the IoT. Maybe there is a way one makes sense in the other? Explore that possibility and use cases. Perhaps even create developer libraries, tutorials, and masterclass series for that use case. Make it extremely easy for any project that wants to explore those possibilities to implement solutions. And support those endeavors financially.
Or how about software minting that we explored with our team at GAT Network? How about being the first and only chain that totally supports and promotes the minting of actual software and games instead of another set of *punks? Create and maintain libraries to make it easy for indie-game creators or web-app developers to mint their works. Boom, suddenly, you are the go-to place for everything related to software minting.
This is just an example, but I hope you get the point. Your own niche where you are the first adopter. No competition with big, established chains. And a clear strategy for whom to target. Best bang for the buck.
TL/DR Final thoughts
The future is multichain. And it is a good thing. Any advantage in technology and fees is short-lived. Interoperability is paramount, and boosting cross-chain projects is the easiest way to grow the network at this stage. Mid-term, concentrating on niche markets will have better results than spending millions on generic campaigns.
Thanks for reading. :)