A Multi Chain Future: chains as modules.
Krishang Nadgauda / August 05, 2021
5 min read
Ethereum is an existing giant, both, in terms of its grasp on the market, and the masses. It is an 'infinite machine', the 'world computer' — a blockchain with a Turing complete language to build any imaginable application on it.
That said, Ethereum comes with a given set of constraints that favor the operation of some applications over others.
Enter — a tsunami of feature focused blockchains.
The number of blockchains in production continues to increase, year by year.
Each new blockchain fronts as focused on delivering what existing giants haven't, can't or won't. A few are even explicit about sacrificing some 'orthodox' blockchain philosophy to serve a specific feature of blockchains really well.
These blockchains are set on unclogging a whole new category of applications by picking something a giant like Ethereum doesn't do well, and doing that thing really, really well.
Let's discuss using these feature focused blockchains as modules for a main chain like Ethereum.
Bootstrapping a blockchain is hard. In some sense, blockchains are implemented with a built-in Lindy effect. That's why for most of the general public, all of crypto is pretty much "Bitcoin" and "Ethereum".
In that spirit, we can take the categories of applications the feature focused blockchains unlock, and bring them to Ethereum.
Smart contracts on Ethereum can leverage these feature focused blockchains by communicating with them. One must be able to trigger a read or write operation on a feature focused blockchain, by calling a function on the main chain, Ethereum, and vice versa.
This is accomplished by 'passing messages' between chains.
Cross chain communication: Chainlink VRF
Here's an example of cross chain communication where ethereum smart contracts leverage a feature focused blockchain to unlock an entire category of applications on ethereum.
Chainlink VRF is a random number generator that operates on a request ←→ response model, where a smart contract can request a random number from the Chainlink VRF system in one transaction, and the Chainlink VRF system fulfills that request in a subsequent transaction with a random number.
Generating a random number costs gas. Chainlink VRF aims to be a self-sustainable service, so it collects a fee from the contract requesting a random number, which is supposed to pay for the gas used in generating the random number.
It is expensive to use Chainlink VRF on Ethereum mainnet. A contract is charged 2 LINK (i.e. ~$40 at current prices) in fees, on every random number request. This renders Chainlink VRF impractical to use, despite it being a reliable solution to a long standing problem of generating or using truly random values on-chain.
So here's the problem at hand — Chainlink VRF is great, but expensive to use. Why is it expensive to use? Generating a random number is estimated to take up to 2 LINK of value in gas, which is then slated as the fee to pay to use Chainlink VRF.
Here's a solution — off load the generation of the random number to a blockchain where it is inexpensive to generate the random number.
In comes Polygon — a blockchain focused on being gas cheap. Generating a random number on Polygon is inexpensive. Chainlink VRF charges a 0.0001 LINK fee, which pays for the gas cost of generating a random number on Polygon, as opposed to the 2 LINK fee on Ethereum mainnet.
Here's what cross chain communication makes possible — a contract on Ethereum can request a random number from Chainlink VRF on Polygon in one transaction, and Chainlink VRF on Polygon can relay the random number generated to the requestor contract on Ethereum mainnet, in a subsequent transaction.
Does this make consuming randomness less expensive on Ethereum mainnet? Yes — it cuts the cost by more than half. Even though that's still not as dirt cheap as consuming randomness on Polygon, it's a significant drop in costs.
Of course, there are limits to how cheap these cross chain operations can be. A call to another smart contract on Ethereum costs 21,000 gas, and cross chain operations, on Ethereum's end, generally are two step processes — sending a request, and pulling back a response. This gives us a (less than) base gas cost for cross chain operations, which is 42000 gas: ~$2.5 at avg. prices.
Directionally, using feature-focused chains as modules for contracts on some other main chain, like Ethereum mainnet ,unlocks a new category of smart contracts to exist on the main chain.
In the case of Ethereum mainnet, till date, this means smart contract designs that involve heavy computation can off load computation onto gas-cheap chains.
Modules across chains instead of clones across chains
Some projects on Ethereum genuinely benefit from deploying their clones on feature focused networks. For instance, a DEX like Uniswap genuinely benefits from deploying clones on gas cheap chains like Arbitrum or Optimism.
That's because the job of Uniswap is to move fungible tokens as quickly and efficiently as possible, and leveraging cross chain communication — as it is now — like in the case of the cross chain Chainlink VRF, would perhaps only slow things down.
That said, as cross chain communication continues to improve, I wonder if we may see a single canon implementation of a major protocol spread across different chains, rather than having copies of an implementation, each living in a different chain.