Bridges, not platforms
(Update: This is an older view on the potentials for bridges for crypto. For an updated perspective, check my thoughts on The Spelunking Podcast Ep. 21 about how we are moving to a “zero-knowledge everything” world, or this piece on ZKP Bridging.)
Cosmos and Polkadot, which were both born to ensure interoperability among different chains, are in a race to maintain their relevance.
Wormhole helps transfer tokenized assets across Solana, Ethereum, BSC, Terra, and Polygon.
AllBridge covers Near, Aurora, Avalanche, Houbi, and Celo on top of those.
ThorChain will allow cross-chain swaps, and might even work if they ever stop getting hacked.
Cosmos’ IBC might be stillborn, and Substrate may end up becoming more important than Polkadot’s Relay Chain, since Substrate’s whole edge is to let projects design even their own consensus mechanism. Even if Tendermint and Substrate are valuable for developers, the economic value is likely to accrue on whatever is built with them (eg. Terra) and not in ATOM or DOT, because their value would derive from securing the relay.
While bridges are currently clunky and inconvenient, fixing a usability issue is easier than building entire new platforms and then growing ecosystems around them. Cosmos and Polkadot also very much depend on the solution to any problem being “build a new blockchain”, which I would wager does not fit the vast majority of cases. Even if that were the solution, once you build it you’d only get access to other Polkadot- or IBC-based chains.
Building on an existing chain and then bridging if people are interested on moving value elsewhere seems much cleaner, faster, and a flat out better way to piggybacking on existing communities.
Meltem Demirors pointed out as much on her Breakpoint 2021 talk. Her key argument: you don’t care what chain your transactions settles on, you only care that it settles.
This raises an unspoken point: how much is being bridged to each platform is likely a more interesting metric of platform financial usage than TVL.