1. Why do we need a decentralized index?
The inscription data is on L1, but the calculation process and data results are on the index, and the index is essentially an off-chain server, which is no different from the website servers of web2. That is, the inscription's currency holdings and transfer records are all on a website server. Once there is a problem with the index service, the assets based on this index service will have problems, and in serious cases, it may even cause the entire protocol ecosystem to collapse (there have been bugs in a certain protocol index before, and additional issuance out of thin air, and the data between the two index parties could not be aligned, causing the entire protocol to stagnate, causing huge losses to the community). Therefore, the decentralization of the inscription index must be achieved.
2. Indexing Status of Existing Protocols
Indexes can be divided into the following categories based on their degree of decentralization:
Purely centralized index: There is only one index and it is not open source. (Most new protocols are in this state, including many new protocols such as#btcand#evmchain.)
Open source centralized index: The index is open source, but it relies on 1-2 companies (main representatives: #eths, #orc20).
Multi-center index: The index is open source and cross-validated by multiple indexes (main representative: #brc20).
Incomplete decentralized index: decentralized, but incomplete. (Main representative: #atomicals)
Decentralized index: The index code is unified and anyone can run it. Fully functional (no protocol has been implemented yet. Currently#unisatis promoting the decentralized index of #brc20, and the decentralized index of#ierc20protocol of#ethchain will be online for testing around the end of this month)
3. How does the realization of decentralized indexing promote ecological explosion?
Problems with existing indexes and their impact on the ecosystem:
1. The degree of decentralization is insufficient, and there are always security risks. For example, if several indexes work together to commit evil, the cost of fraud is too low, and they can only rely on the human nature of the indexers, which is extremely unreasonable.
2. Poor flexibility. If the protocol is upgraded, all indexers must upgrade according to the new rules. Because each index is self-developed and uses different development languages, it is easy to have inconsistent logic details during the upgrade. Even if the data is consistent, it takes a long time for multiple indexes to verify each other before they can be used. Moreover, the development speed of each team is different, and the time for proofreading and adjustment, as well as the complexity of coordination, are relatively high. This has an impact on other service providers using the index.
3. For protocols with a small number of indexes, developers often need to develop a set of indexes on their own to ensure data security, facilitate their own dapp use, and prevent data falsification. For ecological projects with higher requirements, the development cycle will be significantly extended.
Benefits of decentralized indexing:
1. Decentralized indexes are similar to nodes in public chains. The codes are unified, and the data obtained by anyone who downloads and runs them is consistent. There will be no problem of joint fraud by several indexes. The data security is high.
2. You only need to uniformly upgrade the decentralized index code to quickly upgrade the protocol, greatly improving the flexibility of the protocol.
3. Ecosystem developers do not need to develop a set of indexes by themselves, they only need to run the open source decentralized indexing program, which can be used very conveniently. (The decentralized indexes planned by Unisat and IRC20 also have incentive mechanisms, which make more people willing to build indexes. Further improve the degree of decentralization.)
4. The logical impact of inscription tokens on large exchanges:
At present, exchanges, especially large exchanges, need to build their own indexes to list inscription tokens for fund security reasons (it is impossible for exchanges to hand over the currency holding data to others for decision). However, there are dozens of protocols, large and small, emerging in an endless stream. If they all use centralized indexes, it means that for each token of a protocol, the exchange has to make a new set of indexes by itself, which is a very stupid method (although some exchanges are already doing this). After the decentralized index is implemented, the exchange only needs to download the index program, run it, and then it can directly list the currency. The process of listing the currency is greatly simplified, and the decentralized index is also very friendly to the exchange, especially the large exchange (it is said that IERC20 is already connected).
Based on the above, after the decentralized index is implemented, security and efficiency can be greatly improved, and more ecological applications can be built, thereby promoting the next round of ecological explosion!
Finally, the impact and prediction of decentralized index implementation on protocols:
The earliest protocol to realize decentralized indexing will quickly occupy the top echelon of the ecosystem, because the protocol ecosystem can develop rapidly, with more gameplay and stronger sustainability, which can attract more traffic.
The fastest progress is the decentralized index of ierc20, which will be put online on the test network for testing at the end of the month. Once the whole system is operating normally, other evm chains only need to switch the index rpc to perfectly use the ierc20 protocol standard. If the ierc20 market supports other chains, it only needs to switch rpc to be compatible with the ierc20 standard protocol of all evm chains. This kind of efficient influence is very huge. It is possible that ierc20 will become a universal standard for evm chains like erc20. And ierc20 will become one of the de facto (not a slogan) eth expansion solutions, directly targeting L2.
Once a protocol implements decentralized indexing, the distance between protocols will be quickly widened. It is worth noting that whether it is the BTC chain or the EVM chain, the underlying architecture of the decentralized index is similar, that is, the entire architecture of ierc20 can also be used as a reference for non-EVM chain protocols.
