Increment — Our Vision and Theory
🌞 GM Flowverse Citizens!
The ultimate vision of Increment is to become a fundamental DeFi infrastructure in the Flow ecosystem, one that serves as a liquidity engine for fungible tokens, to efficiently release and leverage more capital, paving the way for further decentralized financial applications and innovations on the Flow blockchain.
Flow blockchain has been well-known for NFTs and the team behind it, i.e. Dapper Labs, creator of CryptoKitties and ERC721 standard, with a bunch of successful projects like NBA TopShot, Blocto, Rarible, ChainMonsters, Mynft, etc. launched on Flow mainnet in 2021.
Many people now bear the opinion that Flow is a blockchain built specifically for NFTs. This is only 50% true — the account system and resource-oriented model is very suitable to describe true ownership — instead of relying on a central smart contract storing ownership mappings, Flow allows storing the NFTs and digital assets directly into user accounts. It represents real ownership by granting users full control of their assets — this is a new paradigm that’s very suitable for building NFTs and scarce digital assets.
However, as a generalized public chain with the vision to power next generation apps and games, Flow has far more potential to be unleashed beyond NFTs. We do hear the voices from users and see the growing demand for decentralized financial products, but still the infrastructure is missing. Taking a retrospect of every boomed public chain, DeFi is one of the most important indispensable catalysts, specifically in areas like stablecoins, lending platforms, DEXes, yield strategies, etc. Increment Labs is building several DeFi protocols on Flow to solve the above mentioned problems, with Decentralized Money Market being the first product going public testnet launch on 02/10/2022, and a lot more to come 👀 👀
Why we build on Flow
There are many reasons that why we decide to be dedicated to building on Flow, we’ll just highlight some of the most important ones below:
1. Our prediction of the public chain competition: Flow being one of the dual / triple winners in the endgame
EVM has been so hot these days, but we have our own theory of the endgame landscape of public chain competition. Taking a retrospect of historical infrastructure advancement, there’s an interesting phenomenon: there are two primary mobile platforms — IOS v.s. Android; two popular graphical desktop operating systems — Windows v.s. MacOS; two widely used server architectures — Windows Server v.s. Linux; three major consumer level game consoles — Xbox v.s. PlayStation v.s. Nintendo Switch.
Thus we have a basic verdict that the similar result will happen in the public chain domain — the endgame will be ETH v.s. one or two non-EVM based chains to lead the market share and coopetition with each other. As time and technology evolves, any EVM-forked chains will finally become some kind of “testnet” of Ethereum, with majority of their values finally being captured by Ethereum, and they won’t win the game. (The Matthew effect and Pareto Principle.)
Instead, choosing another path instead of simply forking from EVM, it might be hard to bootstrap the ecosystem from the beginning due to the learning curve, path dependence, lacking of developers and projects, but Flow and DapperLabs team has made many efforts and improvements that we see in the long run these drawbacks can be overcome — the way might be twisted, but the future is determined and bright. We’d like to make the bet on Flow’s side and to be dedicated to building in the Flow ecosystem to accomplish the goal together.
2. Mass audiences besides native crypto users
Let’s take a look at NFT sales by transaction volumes and active addresses:
Flow is leading the ranking of non-EVM based blockchains and it’s getting real user traction and adoption. There’s also data showing that the user profile of Flow is somewhat different from native crypto users — starting from CryptoKitties there’s one thing DapperLabs has been keeping doing and done quite well: on-boarding more users from traditional web2 world thus bringing broader impact.
3. Scalability and low costs
It now costs tens of dollars to simply transfer an ERC20 token on the Ethereum blockchain, and even more costly to do further complicated operations like performing a swap trade, entering / exiting a liquidity pool, purchasing an NFT, etc. This hinders mass adoption and makes Ethereum blockchain barely unusable for normal users (“non-whales”).
Flow blockchain tries to solve the scalability trilemma by adopting a multi-node architecture to separate validator roles into four different types: Collection, Consensus, Execution, and Verification. Each type of nodes just tries to do one thing and does it well. Scaling without sharding ensures layer-1 composability and maintains transaction fee at a negligible level: sending one transaction on Flow mainnet costs 0.00001 flow token, that’s < 0.01 cent ($ 0.0001 to be exact) per transaction. This makes Flow blockchain extremely affordable for users and application builders.
4. User and developer friendly
Flow blockchain has also created a more friendly environment for both users and developers. Users don’t bother to understand what private keys and public keys are, FCL-compatible wallets (such as Blocto Wallet) make accessing Flow blockchain just like logining to the amazon account with email and passcode. This onboards mass-audiences from web2 world to the Flow blockchain, which is a really great achievement as the number of web2 Internet users is at least 100X more than existing native crypto users.
At the same time, there’re rich developer documentation, tools and scaffolding projects to help developers quickly bootstrapping. One thing we like most is the playground and emulator feature DapperLabs team has built, which is more like a sandbox for devs to quickly code, deploy, test, and interact with Cadence smart contracts in web explorer.
5. Rich on-chain assets and projects
From hundreds of thousands of high value collectibles & PFPs, including NBA Top Shot, Ballerz, Matrix World, Evolution, Flovatar, Hoodlums, Goated Goats, and many more; to marketplaces like Rarible, BloctoBay, MyNFT, Versus, VIV3, etc.; to games like Chainmonsters and Dark Country; to tools and middleware like Alchemy, Graffle, Flowscan; to payments and wallets like BloctoWallet, DapperWallet, MathWallet, MoonPay; to DAO and education like Emerald City and Decentology: We’re seeing tens of, if not hundreds of projects are building on Flow, spanning almost all sectors from Web2 world to Web3 universe.
Recently Circle has also announced that USDC is now available on Flow which will ramp up more customers, capitals and on-chain volumes. Along with other fungible tokens and projects, we anticipate to see huge growth very soon!
Summary
Above basically summarizes we IncrementLabs’ vision, and why we think Flow will stand out in the competition of smart contract platforms.
Of course this doesn’t mean we didn’t encounter any challenges: there’s currently no decentralized price feed available on Flow thus we have to build one ourselves. Flow’s resource-oriented programming model and smart account system are both quite different from EVM’s, which makes it unique and convenient to represent true digital ownership, however this also makes authenticated cross-contract interactions not that obvious. We’ll introduce all the challenges we met and ways to overcome these in follow up threads.
Stay tuned for future posts and our upcoming public testnet launch of Decentralized Money Market & 1st Decentralized Price Feeds on Flow 🌊!
