According to a Coindesk publication, there were about 350k token smart contracts on the Ethereum chain alone from 2020; a figure which has almost double in 2022. Like Ethereum other smart contract chains are also experiencing massive growth. All of these growths are reflected in market capitalization growth, which has also been soaring, across all market categories.
A closer look at the blockchain industry’s activity in a 10-year timeline will reveal quite a lot of changes in the technology’s development priorities, applications, and categories. Consequently, all of these changes have led to a more diverse market, with a plethora of financial instruments and asset classes.
Before the era of smart contract chains a major developmental hurdle projects were faced with was that developers had to deploy fully-fledged blockchains if they wanted to innovate with the technology. For example, Masternode chains like Dash had to be deployed for little features like instant send service and private send. Similarly, The Monero chain has its entire utility hinged on anonymous transactions.
Fortunately, Vitalik’s smart contract genius brought an end to the need for new blockchain networks anytime a new utility was needed; this paved the way for an age of smart contract blockchain infrastructures. With smart contracts, other on-chain transactional scenarios could now be executed without needing a third party.
At the time of writing, there are 156 smart contract blockchains, currently listed on Coingecko. These chains go on to deliver millions of cryptocurrencies and decentralized applications, accounting for the multi-trillion dollar crypto market. On the contrary, this diversity is not short of its own challenges, most notably, chain and smart-contract interoperation problems.
With hundreds of smart contract blockchain infrastructures and millions of cryptocurrencies built across these platforms, the need for a seamless and transparent standard for cross-chain interoperation is necessary for the future of blockchain economies.
Chain specialization has always been a design trend and best practice for smart contract chain developers. For example, Ethereum, similar to Bitcoin, is skewed towards, network distribution and block consensus decentralization type of decentralization and security that Ethereum offers. On the contrary, a chain like Solana is built for speed and low fees; however, does come with its own tradeoffs.
Infographics showing 4 leading chains and their design and function tradeoffs as well as their specialization
Binance Smart chain
Also, given how blockchain economies are designed to operate in isolation, multichain solutions are necessary to allow project owners and users to leverage as many chains as they possibly need to achieve their developmental and usage aims.