The competition among L1 in today's blockchain market is increasingly fierce. Mainstream public chains such as Ethereum and Solana have occupied a major position in the industry with their huge ecology and network effects. If emerging public chains want to stand out in this pattern, they must make breakthroughs in technological innovation and ecological construction. With the development of the market, many projects have begun to pay more attention to community building and market operations, while the investment in underlying technologies has been relatively reduced, which makes public chain projects with real technological innovations extremely valuable. Alephium has emerged in this context. It is committed to integrating the advantages of Bitcoin and Ethereum, using a unique PoLW consensus mechanism, an innovative sUTXO model, and the self-developed Alphred virtual machine, providing a new solution for the scalability and security of blockchain.
Related reading: 《In 5 years, Alephium will improve POW performance to the extreme》
During the Token2049 conference, the BlockBeats team had the honor of interviewing Alephium's founder Wang Cheng and COO Maud Bannwart, and talked with them about how Alephium found its core competitiveness in the current fierce public chain competition environment and continued to build user-oriented ecological projects. Technical support is the background of Alephium, and how to achieve more sustainable value accumulation on this basis is a more worthy direction of attention. I hope that through this dialogue, we can have a deeper understanding of how Alephium insists on technological innovation and creates a unique ecological system in the fierce public chain competition, bringing new possibilities to the blockchain industry.
The following is the full text of the interview:
BlockBeats: Please introduce yourselves, why did you choose to enter the crypto field, and how did you join Alephium?
Wang Cheng:I used to work in a large company, but gradually felt that this working model could not allow me to realize my personal value. It happened that I had been following the development of Ethereum at that time, especially their sharding technology. I realized that I had the ability to design a system that was better than their original solution. So starting in 2017, I tried to verify this idea. As my ideas gradually matured, I decided to devote myself to this project full-time, and finally the Alephium project was born.
Maud:I joined the team in 2021, and it was still some time before the project was officially launched. I had worked with Cheng and several other core contributors on a startup project before, and later I left that project. I'm like a Swiss Army Knife, mainly responsible for operations.
I entered the crypto space in 2017, initially working for a small cryptocurrency exchange. It really started in December 2017, when Bitcoin first hit $20,000. That was also the first time we felt the scalability challenges of the industry, especially the skyrocketing transaction fees caused by the Cryptokitty phenomenon on Ethereum. This was a painful first experience for me in the blockchain world, but it also made me clearly aware of the many challenges that the industry still needs to overcome.
Left: Wang Cheng; Right: Maud Bannwart
Technological Innovation: Alephium's Fusion and Breakthrough
BlockBeats: How do you understand that Alephium combines the advantages of Bitcoin and Ethereum? How to balance the different advantages of the two in design, and how to avoid their respective disadvantages.
Wang Cheng:From a technical perspective, Bitcoin is simple, secure, and easy to maintain; Ethereum, with its powerful programming capabilities, has become the first blockchain platform to successfully introduce smart contracts. However, the complexity of Ethereum brings many potential security risks. When we designed the system, the main goal was to combine the advantages of the two while trying to avoid their respective shortcomings. From the results, we basically achieved this goal, and the entire design process followed several key first principles.
First, we adopted the UTXO model to handle all assets. The biggest difference from the account model is that the UTXO model allows users to fully control their assets and has greater advantages in security. In addition, this model is also more convenient for sharding expansion, which facilitates the future expansion of the project.
Secondly, we introduced the programming capabilities of the account model, which enables smart contracts to have variable states, thereby providing extremely strong expressive power. In this way, almost all applications that developers want to implement can be completed through this model. Our core goal is to successfully combine these two features into one project.
Although other projects have tried similar integrations before, they often encountered various problems. Ours is the first project to successfully combine the two, and we can further discuss the technical details later.
BlockBeats: There are relatively few projects that use the PoW consensus mechanism in the market now, mainly because Ethereum and Bitcoin each have a strong "geek culture" in culture, so it is difficult to see other similar projects. Although the Bitcoin ecosystem does have a trend of recovery at present, when developing public chains, it is generally believed that the PoW consensus mechanism is a bit outdated. In the Ethereum community, concepts such as sharding technology are no longer widely mentioned. How do you view this issue? Why do you still insist on PoW consensus and these technologies?
Wang Cheng:Developing a public chain is indeed an extremely difficult thing. We have been working on this project full-time since 2018, and it has been several years now. In the early days, we spent a lot of time on the development of protocols and infrastructure. At that time, if you didn't have something substantial for everyone to experience and feel the progress of the project, many people might think you were just making big promises or even suspect you were a liar.
However, fortunately, our design idea is to simplify the system as much as possible, similar to Bitcoin. Therefore, our small team completed the development of core functions in a relatively short period of time, including sharding technology, virtual machines, and the implementation of smart contracts. As the project went online, the situation began to slowly improve, because everyone could see with their own eyes that the technology had been implemented and was no longer just a concept.
On the other hand, this was also a very risky process. We set very ambitious goals from the beginning, and what we did was almost unexplored at the time, and many things were explored while doing. This was the biggest challenge we faced, but it also made me feel that this thing was very interesting. As I mentioned before, when working in a large company, the model is relatively fixed and the space for innovation is limited. And doing this project, especially in the early stages, is almost every day to solve new problems, and the brain is in a state of high fatigue every day.
Especially in the highly complex field of system engineering and blockchain development, a small design detail, if not handled properly, may lead to security risks, or even ruin the entire project.
This situation is particularly common in smart contracts, where a vulnerability may cause all funds to be emptied. Similarly, in the development of public chains, L1 has extremely high security requirements. If the security is not up to standard, the entire project may suffer a fatal blow. Therefore, during the development process, we must always remain highly focused and pay attention to every detail to ensure the security and stability of the project.
BlockBeats: Since we are talking about technical security, I think another issue that needs to be discussed is the direction of the consensus mechanism. Because in the underlying public chain, the consensus mechanism is a very critical part. Many readers or video viewers may not know much about consensus mechanisms such as PoW and PoS. Can you briefly introduce what these mechanisms are, how they work, and how they resist security threats?
Wang Cheng: First of all, regarding PoW, our original intention of introducing it was to solve the energy consumption problem in the proof-of-work mechanism. I can give a simple example. Suppose that Bitcoin now uses 3% of the world's electricity for mining. If we can reduce this electricity from 3% to 2%, how much impact will it have on its security? From the user's perspective, the impact is actually minimal. Users will hardly feel any changes, and security has almost no impact on them. However, from the perspective of energy consumption and environmental protection, a reduction from 3% to 2% is a huge change. Therefore, when we introduced PoW at that time, our main goal was to control energy consumption within a reasonable range without compromising the security of the system.
At that time, an article was published in the Bitcoin community specifically discussing this issue, although it did not attract much attention because Bitcoin's consensus algorithm is very difficult to modify, and any suggestions for changing the Bitcoin algorithm or core protocol are usually difficult to adopt. But after reading that article, I thought the idea was very good, so I made some adjustments and applied it to our project, which is the core method of our PoLW (Proof of Less Work).
The basic principle of PoLW is that when mining, not only electricity is consumed, but also tokens are burned to increase security. That is to say, when you mine a new block, not only energy is consumed, but also tokens are consumed. The benefit of this mechanism is that the overall energy consumption is reduced. Just like the example of Bitcoin's power consumption dropping from 3% to 2% mentioned earlier, our design goal is to reduce power consumption to a reasonable range.
Related reading: "In-depth analysis of proof of stake work (PoLW): an in-depth conversation with Alephium founder Wang Cheng"
Specifically, our design parameter is to reduce energy consumption to about one-eighth of the original. In this process, we replace part of the energy consumption by burning tokens, which greatly reduces the dependence on energy. In the end, such a mechanism can not only ensure the security of the system, but also greatly reduce energy consumption, thereby achieving a more environmentally friendly consensus mechanism.
BlockBeats: Yes, this is indeed in line with the current trend. You just mentioned that the native algorithm of Bitcoin is difficult to modify, and only teams like BTC Core can touch these underlying protocols. Alephium has also made some adjustments in this regard. As you mentioned, it has innovated in algorithms and sUTXO models. After the recent recovery of the Bitcoin ecosystem, people have made more interesting attempts and innovations in the UTXO model. Can you briefly introduce your thinking when designing these models?
Wang Cheng:Yes, in fact, the research and extension of the UTXO model has a long history. Before this Bitcoin boom, projects like Cardano and Ergo proposed the eUTXO model, as well as some other similar projects. However, from what I have seen, their dissemination effect is not particularly good, and I think there may be two reasons.
The first problem is that many projects are too complicated when expanding the UTXO model, or completely follow the traditional UTXO model, which makes it very inconvenient when developing DApps. For developers, managing the UTXO state itself is a huge technical challenge. For example, inscriptions are very popular now, but when developing inscriptions, you need to write special code to manage these special UTXOs, which adds a lot of burden to wallets and developers.
The second problem is how to combine the UTXO model with other models and ensure that the experience of users and developers is not affected. This is also a big challenge. In the development of blockchain, we have seen many protocols that, despite having very good ideas, are often difficult to use or have too high a threshold to attract developers to join, and sometimes even encounter functional limitations.
In our design process, we attach great importance to user experience and developer experience. When designing and developing, we always prioritize how to reduce the difficulties encountered by developers, avoid those places that may "dig pits" for developers, and strive to optimize the development experience. From the final results, we have basically achieved this goal. Although we are a new public chain, we still attract a lot of developers, and the community has developed a lot of applications.
BlockBeats: How does the Alphred virtual machine help developers based on the sUTXO (stateful UTXO) model? How does it combine with the needs of developers in this regard?
Wang Cheng:The virtual machine is actually the core driver of the DApp platform, and almost all transactions that interact with DApp are executed through the virtual machine. Under the Alephium architecture, the virtual machine mainly processes transaction information related to the sUTXO model.
The functions of the virtual machine can be divided into two parts. Compared with the account model, it has two significant differences. First, since we are based on the sUTXO model, all assets are stored in UTXO, so the virtual machine must have dedicated logic to handle UTXO when processing assets. Our virtual machine does a great job in this regard. I have never seen other projects that can handle it like us before.
Most projects' virtual machines can only operate on a single UTXO, while our virtual machine can handle a large number of UTXOs at a time, which means that it can handle multiple inputs from different addresses at the same time, which greatly enhances the functionality of the virtual machine and brings great convenience in programming.
This is the first important difference - our virtual machine fits perfectly with the sUTXO model. The second difference is that we have designed a very efficient way to handle the state of the contract. In the account model, all states - including tokens and information within the contract - are stored on the blockchain through states. In our model, assets are handled through UTXOs, and the rest is handled through mutable states on the blockchain. This is different from other UTXO models because we allow a certain degree of variability. This variability makes the development experience more similar to traditional programming languages, except that special logic is required when handling assets.
Through this design, we have retained the security of the UTXO model and improved the programmability of the system. The key challenge of the virtual machine is how to combine the two, and we have found a good solution through the above two points, and the overall effect is very ideal.
Doing truly valuable things, Alephium's cultural vision
BlockBeats: We just talked about a lot of technical content, and all of this has prompted developers to join Alephium, which is a very positive signal for the project. What are the key components of the Alephium ecosystem at present? In addition, Alephium is constantly expanding the DeFi field through the support of native smart contracts. What is your long-term vision for DeFi?
Maud: Since the end of last year, our ecosystem has indeed ushered in explosive growth, with TVL increasing by nearly 2000%. As a non-EVM Layer 1 chain, it is very important to introduce native stablecoins and achieve cross-chain interoperability. Therefore, a core component of our ecosystem is the cross-chain bridge, which is based on the fork of Wormhole. The launch of this cross-chain bridge is an important turning point for our ecosystem because it enables us to transfer mainstream stablecoins (such as USDT, USDC) and other assets existing on the Ethereum blockchain to Alephium. The introduction of this key component has greatly promoted the first wave of growth of the ecosystem.
Our ecosystem really got off the ground when the first DEX was launched on Alephium by a third party in the summer of 2023. Soon after, NFT marketplaces, Launchpad, and a few smaller DeFi-related applications followed. Since then, the ecosystem has snowballed, with every project launched on Launchpad being oversubscribed and quickly selling out. Although the ecosystem is still relatively small, the mutual support and support between developers is very obvious, which is gratifying.
Another recent boost to our ecosystem is oracles. In July of this year, Alephium introduced its first oracle service, which supports the construction of more DeFi and other applications, such as overcollateralized stablecoins, native stablecoins, lending protocols, prediction markets, etc., all of which will rely on oracles. Therefore, we are very much looking forward to seeing these applications drive the further development of the Alephium ecosystem in the DeFi space and beyond.
In the future, we plan to further expand the functionality of the cross-chain bridge by adding interoperability with more chains. Currently, our next goal is to integrate into BSC.
BlockBeats: Which track or field are you most interested in? Is it the prediction market, or something else?
Maud: To be honest, I am very excited about the development of the entire ecosystem. What I am particularly looking forward to is that the potential of the UTXO model has not been fully explored, because the current smart contracts based on the UTXO model are not mature enough in terms of ease of use and programming. I am looking forward to seeing how the uniqueness of the UTXO model can be used to improve the security of existing applications and protocols, improve user experience, and hope to see the birth of completely innovative new protocols, no matter what field. So, my interests are broader, mainly to observe how people use the UTXO model to change the way we deal with user experience in the ecosystem.
BlockBeats: Today, community culture has become a significant trend in many major Layer 1 projects, or a very obvious marketing strategy. For example, Monad and some other projects, I have talked to a team that used to work at Ant Group, which is also a large Chinese Internet company. They also attach great importance to the construction of community culture. This culture does not refer to meme coins, but a community atmosphere similar to niche culture. I understand that Alephium also has a very strong sense of community, especially the close connection between developers, the community and the core team. Therefore, does Alephium have some specific operating strategy to cultivate this community culture?
Maud：I don't think it's strictly an operational strategy, but more of a vision, and it's also about the personalities of the core team members. When I first joined Alephium, Cheng made it very clear that we were building something useful, or at least that's what we thought was the value we were bringing. We wanted to create something useful for users and build an infrastructure that people could build on top of, and that was our main goal.
With that goal, we had to stay very close to the developer community because we were building for them. I really like the idea of starting small and building gradually as use cases and developers come on board. At the same time, we're constantly incorporating user and developer feedback to drive the protocol further. So I think it's more of a vision than a carefully planned strategy.
User experience is very important at every level, both for developers and how we interact with the community. We strive to be very approachable and engaging, and that's what resonates with people. In turn, this has shaped our community culture, where members support each other and grow together. To be honest, we are really lucky that people in the community support each other and help each other move forward together. In some ecosystems, competition can be fierce, but we are lucky to maintain this collaborative atmosphere to this day.
Feedback from the Alephium Community
Also, we really try to avoid too much emphasis on the personality cult of the core team members. Because ultimately we want to build a decentralized ecosystem that can continue to grow and be driven by the protocol itself. So it's important that Alephium is not just Cheng, it's not just me, it's the result of all of us together. Ultimately, each of us is just a drop in the ocean. We have always strived to ensure that every contributor in the ecosystem gets the attention and recognition they deserve, not just the members of the core team. We have insisted on doing this since day one, and everyone recognizes and appreciates this, which makes us very happy.
How to win in the fierce competition among public chains?
BlockBeats: The market's view on L1 has changed a lot, especially for retail investors. Many people no longer pay too much attention to the technology itself, but pay more attention to community building and project operations, which makes the role of COO more important. Do you think that the importance of technology has declined in the competition between L1s? As a COO, how do you plan to enhance your role and better participate in this competition?
Maud：I think you're right that many projects are now focusing more on community building and less on underlying technology. A lot of projects are technically similar, and their main value proposition or differentiator is the size of the community they can gather.
But I think there is a problem with this approach, and this may be my personal opinion, not everyone's. It is not a sustainable strategy because if you don't have real utility, all the efforts to attract the community will become very expensive and difficult to maintain in the long run. Such a strategy may work for a period of time, but if your only differentiator is the amount of money you invest in the ecosystem, it means that you have to keep users interested and retain them.
Alephium has made some adjustments to this trend, but from a sustainable development perspective, you need to have both: a strong technical foundation and real utility, especially in terms of user experience, which can be felt by both developers and users. At the same time, you also need strategies that attract people, because people need to know that you exist, whether that incentive is financial or otherwise, and not only attract them, but also retain them.
We did make some unique innovations on the technical level, especially in the industry trend at the time, and we were somewhat upstream. But since the end of last year, PoW has regained widespread interest, and this trend still exists in the industry. We also see that the UTXO model as a more secure asset and token system has gradually gained more attention, and proof of work is also considered a more reliable way to ensure decentralization. The industry has regained interest in these technologies, which also provides Alephium with a very favorable positioning.
BlockBeats: There are many technologies emerging at present, and leading public chains such as Ethereum and Solana have occupied many opportunities for ecological development. What opportunities do you think there will be in the future under this public chain competition landscape? Is it possible for new public chains to catch up?
Wang Cheng:In general, we can draw lessons from the development history of databases to analyze the development trend of blockchain. From the development history of databases, there are several mainstream databases that dominate the market in each period, but at the same time, new databases continue to emerge and bring innovation and change to the industry. This is also applicable to the blockchain field.
Mainstream public chains such as Ethereum and Solana have established strong network effects. If real innovation is not introduced, it will be difficult for latecomers to compete with them. However, from a technical point of view, I believe that blockchain is still in a relatively early stage. Although some people say that the encryption industry is no longer in its early stages, I believe that from a technical point of view, there is still a lot of untapped potential. If new technological breakthroughs can be brought, it can still have considerable competitive advantages, similar to emerging technologies in the database field.
Finally, the diversity of mainstream databases provides choices for different application scenarios. Similarly, the public chain ecosystem is also complex, and different beliefs and needs may lead people to choose different public chains. Therefore, despite limited opportunities and high barriers to entry, as long as you have a strong team, innovative ideas, and enter the market at the right time, it is still possible to stand out in the public chain competition.
BlockBeats: So what are Alephium's killer features?
Wang Cheng: As Maud said just now, we have not followed the trend or participated in the internal circulation within the industry from the beginning. As early as 2019, when most projects turned to POS, we realized that POW still had unique advantages, so we chose to deepen our efforts in the direction of POW. Now, the competition in POS is already very fierce, and in terms of the combined innovation of POW and POS, I think there is still greater room for development. In addition, due to the existence of Bitcoin, POW has a very large community base, and its potential has not yet been fully tapped. Although Bitcoin is currently very popular, there are many short-term hype factors. I believe that over time, the heat may gradually fade, and only truly innovative projects can survive for a long time.
First, our deep cultivation in the field of POW provides us with greater room for development. Secondly, our technical direction is also relatively innovative, solving the expansion problem through sharding technology and improving the security of smart contracts through a new virtual machine. In the long run, both aspects are crucial - one focuses on security and the other solves performance expansion. It is very difficult to achieve these technological breakthroughs. Ethereum has tried sharding expansion, but the results are not ideal.
I think we are the first to truly implement these technical solutions and propose practical solutions. As long as we can persist long enough, the project will continue to grow, the community will become stronger and stronger, and finally achieve network effects. By then, I believe the probability of success will be greatly increased.
BlockBeats: What do you want to say to the developers of this ecosystem or our readers?
Wang Cheng:From my personal perspective, I think the entire industry should pay more attention to projects that are truly innovative. However, it is not easy to judge whether a project is innovative, because there are various forms of technology today. If people do not have a deep understanding of the technology, or even if they are very familiar with the technology, they will have different opinions due to their preferences. Therefore, this is indeed a difficult question to define, but my original intention is to hope that everyone can pay more attention to some truly innovative projects.
In addition, for developers, I think everyone should pay more attention to user experience. Now many projects are very "hardcore" in terms of technology, but the final products cannot be used smoothly by users. In the long run, this not only wastes money and manpower, but is also not conducive to the development of the project. Therefore, I think developers should pay more attention to user experience and avoid excessive pursuit of complex technical implementations while ignoring the final user needs.
As for users, people often mention the need to enhance security awareness, use hardware wallets, or learn the wallet usage specifications. But from my point of view, what really needs to be improved is us developers, making the product easier to use and with higher security in design. In this regard, I think we have done a good job. For example, our UTXO model, we pay great attention to user experience when developing wallets. Therefore, I also welcome users to experience our products and feel our efforts in user experience and security.
Maud:I think it is easy to be led by the market cycle and indulge in the current trend. But I think it’s important for people to realize that there’s still a lot of work and innovation that needs to be done across the industry to make it easy for everyone to use. Today, even experienced users and developers still sometimes run into problems in the industry. And it’s easy to get caught up in the current mainstream narrative or today’s hot topics and ignore the fact that the industry needs to innovate more to achieve wider adoption.
We can’t just stay at speculation-driven user growth, but should innovate to drive the industry to true adoption. I think projects like Alephium, although we are not the only one making efforts in innovation, are indeed worthy of everyone’s attention and support. So, I hope everyone can support innovative projects in the industry, and you are welcome to ask us questions or exchange ideas at any time.
YouTube link for this interview: https://youtu.be/i7o3PCT8-_Q