Dominic Williams, founder and chief scientist of the DFINITY Foundation, delivered a keynote speech on "The First Real World Computer: Internet Computer Blockchain". Williams said that to make the vision of Web3 a reality, a true "world computer" is needed, and the DFINITY Foundation aims to create the first true "world computer", the Internet World Computer Blockchain.                                                                                                                                                                                    ating a server are placed globally, this is the physical body. Then rely on icp decentralized management and development, which is called soul. ​​​​​​To put it bluntly, our current blockchain public chain operations are composed of computers. ICP’s vision is to replace these computers with large servers placed around the world to operate all blockchain projects. One is for civilian use and the other is for large-scale commercial use. Operating computers one by one can maximize decentralization, but at the same time, it is too numerous and scattered, causing congestion and clutter. Moreover, ordinary computers cannot support large applications, which has resulted in a shortage of existing applications in the currency circle. There are occlusions and bottlenecks, but it is very suitable for defi, especially in terms of financial security. Large-scale servers are placed and operated globally. Because the cost is very high and the threshold is very high, there may be more or less centralization in the early development. Therefore, this is also the reason why DeFi finance was not developed in the early stage. It also happened to be misaligned with Ethereum. . With the development of global servers, more and more servers will become more decentralized and can operate large-scale applications, making up the last link of applications for the currency circle. This is the underlying logic of ICP’s differentiated attack and dimensionality reduction attack. Moreover, this step is also what the currency circle has to take, otherwise it will never be possible to decentralize global applications. But for now, ICP is a lone wolf with no rivals. As long as the currency circle develops towards web3.0 application concepts, it can only go through ICP. You can say that Bitcoin and Ethereum will always be the boss and the second, but no one can be qualified for the third position of ICP. This is the place left for him. If web3.0 applications become popular once, it will be very simple to exceed the market value of Bitcoin and Ethereum. After all, the blue ocean of applications is there. If the market value exceeds that of Bitcoin and Ethereum, it does not mean that the status can be surpassed, but in terms of market value, web3.0 The blue ocean of applications is too huge. Just imagine, all global applications use Dfinity’s decentralized servers, and the world has officially entered the era of decentralized applications. Isn’t this the ultimate vision of blockchain? Maybe in the future, similar competing products will appear as the pie gets bigger, but at least dfinity is now at the forefront and acting as a breaker. The following are the reasons why ICP may fail: 1. Huge initial investment and broken capital chain 2. The world does not accept decentralization, or it collapsed before decentralized applications became popular 3. Problems with ICP’s value capture , the ecological server is in full swing, the currency price cannot capture the value 4. Similar competing products appear to be KO. 5. Being strangled by consortia or policies that support centralization. $BTC $ETH $ICP

When it comes to new public chains, Dfinity (ICP) must be a topic that cannot be avoided. With a huge financing of nearly 200 million US dollars, a gorgeous team of cryptographers and unique technology, ICP was once sought after by countless people; but since After the high opening in 2021, ICP plummeted all the way, from the popular "King Project" in people's hearts to the despised "Death Project", which made countless people sigh. At the same time, the thin and deserted ecosystem also makes ICP feel embarrassed in front of competing products such as Solana. Looking back at history and reflecting on the past, what are the factors that affect the development of ICP ecology? Can unique technology help ecological development? Can the "Death Project" be revived again? This article will start from the technical characteristics of ICP, then to the defects of its NNS governance system and the lack of unified token standards, briefly analyze the difficulties in its development process, and clearly show the reasons for the decline of this "king project" to readers. Technical characteristics of ICP: Decentralized AWS First, let’s introduce ICP’s smart contract system-Canister (referred to as “container” or “can” in China), which is the carrier of DAPP and allows WebAssembly (WASM) bytecode Running in it supports programs written in multiple languages. ICP allocates dedicated memory to each Canister. If ICP is regarded as a supercomputer, then Canister is a process in the computer. Each Canister process contains its own running memory. You can encapsulate smart contract-related data in in a specific container. This is ICP's unique data storage method - Canister allows you to put the program's status, database and even front-end data (such as game assets) all in this container, with the intention of further expanding DAPP. It can be said that ICP is actually a platform equipped with containers. Many Canister containers are deployed on ICP nodes through containerization technology. At the same time, Canister supports the gas fee payment function. Users do not need to own native assets, and the project party pays the handling fee. This is essentially the "gas fee payment" mechanism that many low-threshold wallets on Ethereum want to implement. This also makes many people expect mass adoption of ICP - users can get Web2-level UX without having to purchase native assets from the beginning (especially without paying high gas fees when blocks are congested).But ICP has a major flaw: it does not support global state. Ethereum has a "global state" setting. For all smart contracts, the status of all accounts is publicly visible. There is a "globally visible" state storage structure managed through State Trie; but ICP is completely different. . Specifically, the program (smart contract) in ICP has its own exclusive Canister (container). The data of different smart contracts are encapsulated in independent containers. The outside world cannot see the details of the data and can only provide it to the outside world through Canister. Interface to access internal data. In other words, ICP does not have a "globally visible" state storage structure like Ethereum. The interaction between different Canister programs is asynchronous, and calls to multiple contracts cannot be completed at the same time. Obviously, this is very unfriendly to the Defi protocol, which makes the ICP ecosystem have no connection with Defi for a long time. Some people believe that Ethereum is a "world accounting machine" that simply conducts asset transactions, while ICP is actually a "decentralized AWS" that supports complex web applications. In addition to the unique Canister setting, ICP also adopts a layered architecture, mainly including containers, subnets, nodes and data centers. We can think of ICP as a system composed of multiple subnets, and each subnet is essentially a public chain. Each subnet is equipped with multiple Canisters (containers), which are interoperable basic units in ICP. Each Canister contains the code and status uploaded by the user. The bottom layer of ICP is an independent data center hosting dedicated hardware. Nodes run on the data center. The nodes are responsible for processing data and state transitions in subnet containers. This layered structure design provides ICP with higher scalability and flexibility, allowing it to meet application scenarios of different sizes and needs, and also makes its look and feel closer to cloud services. Some people believe that ICP has implemented sharding from the beginning through subnetworking. Now ICP has 40 subnets, the largest subnet contains 13 Validator nodes, and the smallest subnet only has 1 Validator. Combined with the fact that the interaction (communication) between Canisters mentioned above is asynchronous, the overall benefit of the ICP design is that it is highly efficient and can realize communication across subnets. Currently, all subnets combined can produce about 20 messages per second. block.However, since the number of nodes in each subnet is not large, its theoretical security is questionable. Applying to become an ICP node also requires approval from the ICP Foundation. The hardware configuration of the node is extremely high (far exceeding public chains with heavier node configurations such as Solana and Sui). Therefore, the decentralization of ICP has been criticized by many people. Regarding this point, the project side of an ICP ecosystem said frankly: After all, most of the things running on ICP are "applications" rather than financial transactions related to assets, so there is no such strict pursuit of security. ICP is essentially just decentralization. A cloud platform that is more sophisticated than AWS. Putting the above points aside, ICP has successfully integrated BTC into its system. Through proprietary Chain Key, threshold ECDSA and other cryptographic algorithms and a set of special retrieval mechanisms, ICP and BTC can be directly integrated, allowing ICP's smart contracts to directly hold real rather than mapped BTC assets. The specific implementation is as follows: In the network layer, a BTC adapter is implemented that randomly connects 8 nodes in the BTC network, pulls the BTC block into the ICP network, and updates all the transactions based on the transaction data contained in the block. The UTXO set allows the container on ICP to learn the latest status of the BTC chain, and the program in the ICP container can verify and retrieve BTC blocks and UTXOs. At the same time, the threshold ECDSA algorithm is the key technology that enables ICP smart contracts to accept and output BTC transactions. It is an extension of the ECDSA signature algorithm. This protocol uses a method similar to MPC (Multi-Party Secure Computation) to secretly share the private key fragments associated with the smart contract to the subnet nodes responsible for signatures to obtain a higher level of security. In short, ICP smart contracts can hand over private key management rights to multiple nodes instead of being controlled by a single node or smart contract itself. When the contract wants to output a BTC transaction, it requires the cooperation of more than a threshold number of nodes in the subnet (2/3) to create a complete ECDSA signature to allow the transaction to be released. ICP's asset integration solution goes further than the current cross-chain bridge solution. Most cross-chain bridges only provide BTC mapping, not native BTC, and are highly dependent on the third-party cross-chain bridge's own nodes, which will cause many security risks. ICP can put native BTC into Canister, and can even directly save the private key of the address on the BTC chain.Compared with the traditional cross-chain method that relies on third-party cross-chain bridge nodes, ICP's BTC ledger can easily run on a decentralized subnet with a large number of nodes. As long as the security of the subnet is sufficient, ICP's BTC ledger It's safe. Rational Man Trap: Token Price and Lock-up However, history has proven that no matter how superior or unique the technology is, it cannot make up for the lack of ecological construction. Since the launch of the independent network, ICP ecological projects are still in the embarrassing situation of "no one is using it", and then fall into A vicious cycle of "ecological scarcity → outflow of excellent projects → further loss of ecological participants". What the author wants to focus on here is not the specific ecological development and support issues, but trying to explain from another perspective why ICP is in today's predicament. There is a view that within a few hours of ICP being listed, it suffered price manipulation by certain forces (the founder of ICP has always believed that it was SBF and FTX). The market value of ICP continued to rise with the price of Token, and once exceeded 2,300 billion, ranking third in market capitalization after BTC and ETH. However, as the pulling action ended, ICP prices began to fall sharply. In just 6 weeks, ICP's market value shrank by 90%. The collapse of Token has greatly damaged the reputation of the ICP ecosystem and the Dfinity Foundation, causing ICP to be further attacked by multiple forces. These short sellers have intensified the process of ICP price decline, making it far lower than its actual value. (It is said that a16z, which has always pursued long-termism, has now cleared ICP.) The author does not intend to evaluate the authenticity of the above statement, but only provides readers with a possible point of view (another interesting point of view is that ICP founder Dominic A series of behaviors that disgusted investors were an important reason why ICP was smashed and the ecosystem was isolated). In fact, what affects the price of Token more is its lock-up mechanism - the original intention is to prevent early investors from "smashing the market" and cashing out, but the eight-year lock-up cycle has brought about "hold-up" and targeting For the selling pressure of pledged interest-earning assets/the selling pressure of neuron unlocking, please refer to the figure below: Facts have proved that the Dfinity Foundation’s lock-up of early investors did not have the expected effect: the existence of a large number of bottom chips and the initial listing The price is artificially high, making the gap from the highest point to the chip-intensive area too huge. Except for early investors, almost no one is willing to participate in the price range of this part of the market.But at this moment, early investors are still profitable. For them, it is profitable to re-invest and pledge the interest generated at this stage to NNS or sell the interest; and when the Token further falls to a certain price, early investors Due to the existence of opportunity costs, investors have actually entered a state of "holding up and losing money". In this state, early investors will be more inclined to sell interest, and are likely to lose money after the neurons are unlocked at maturity. Sell, thereby further exacerbating the decline. This death spiral of "the more it falls, the more it sells, and when it reaches a certain price, it sells more" has seriously hindered the rebound and ecological development of ICP. Due to the characteristics of Canister itself, Defi has been absent from the ICP ecosystem for a long time (thus leading to the shortage of stablecoins). position), ecological participants can only hold the ICP Token itself most of the time. Determined Holders will discover the fact that the returns from their contributions within the ecosystem cannot keep up with the depreciation of the Token! The game assumed by rational people has gone one step further. Retail investors and project developers have turned to the public chain ecosystem that they believe is more promising (also taking away liquidity), further reducing the number of Cycles burned on the chain (that is, the number of ICPs). However, the early investors who had locked up their positions for 8 years were helpless and entered a state of "laying flat". Although it may lead to a large drop in Token prices, the author believes that if you want to solve the death spiral as soon as possible, you must conduct a thorough liquidation - that is, unlock and release all long-term pledged neurons at once, fully release liquidity, and maintain the status quo. The longer it is delayed, the more likely it is to cut out the flesh and cause sores. The Governance Dilemma of NNS When VC invests in projects, an important criterion is whether the Token has governance rights, and retail investors also like to use Token governance rights as an enabling factor. Dfinity’s NNS system enables Token holders to fully participate in the governance of the public chain, but how does on-chain governance actually operate? Before specifically analyzing public chain governance, we must first understand the governance system. Here is a brief introduction to Dfinity’s governance system—NNS system: NNS is an on-chain governance system that allows all community members to submit proposals and vote. The voting power of community members is proportional to the amount of ICP they hold, and the length of the pledge period will affect their voting weight.Community members who participate in voting will receive ICP Tokens as rewards. These rewards are called "NNS rewards". Holders who stake ICP in neurons can participate in governance by voting manually or following the votes of other neurons. In contrast, the governance voting of many blockchain projects is much "dictatorship". Only big whales/investors/project parties themselves are qualified to initiate governance proposals, while retail investors often only have the right to participate. As early as two years ago, the Dfinity Foundation adjusted the NNS governance strategy. This reform adjusted some reward parameters of NNS governance, making it more beneficial for voters who actively participate in voting, and for ICP pledgers who do not participate in NNS governance. Earnings will be significantly reduced. At the same time, the foundation no longer participates in active voting, which further reduces the benefits of many nodes that default to following official neurons without setting up voting. However, the governance system faces two problems: First, because the NNS system does not restrict the right to propose proposals, but allows all neurons to propose proposals and vote, resulting in the emergence of a large number of garbage proposals, and supporting the passage of a large number of garbage proposals Neurons can receive more Token rewards for actively participating in governance voting (the principle is similar to Filecoin storage nodes deliberately storing a lot of junk data) - in a sense, this behavior is a mockery of on-chain governance. . The second is the shortcomings caused by excessive democratization of the governance system - extremely low efficiency and inevitably divided communities. A typical example is that the community still does not have a unified token standard! It is true that developers can choose the token standard according to their own situation, but the poor communication and mutual understanding between the Eastern and Western developer communities make the unification of the token standard still far away, which further affects the development of the ecosystem. Another stumbling block. In this case, liquidity will be severely fragmented. Even if a DEX is built, the SWAP of assets will be severely hindered. There have been incidents of NFT being lost when transferring to wallets with different token standards. How to find a balance in the governance system to ensure efficiency while maintaining democratization? This issue has been an issue of endless debate from ancient times to modern times, and from Web2 to Web3. Among the trade-offs between the two, Dfinity chose the former, giving ecological participants sufficient power to discuss, but as far as the current situation is concerned, Look, this choice will do more harm than good to the public chain that has not yet built enough economic benefits - it will eventually become a half-empty solution for the foundation that occasionally ends up, and the distaste for existing users.It is very difficult to solve this dilemma, and hoping that a charismatic leader like Andre Cronje will emerge in the ecosystem in the short term to promote development is tantamount to "a great man descending from heaven." Project Loss and Stock Cycle All public chains that lack users and liquidity injection will inevitably fall into a rug spiral: the project runs away → retail investors’ confidence and finances are damaged, and they leave the ecosystem → the liquidity further deteriorates, and the normal project parties receive less and less income Unable to even obtain income → the project ran away. The situation on Dfinity is particularly serious. Taking the NFT sector as an example, the only NFT exchange in the early stage of the ecosystem was Entrepot, and Entrepot adopted an audit system for NFT listings. After the NFT is approved, it will be sold at designated points on the platform. This system makes the initial The NFT ecosystem is developing relatively well, and the growth rate of NFT is also very impressive. Taking the data in February 2022 as an example, Entrepot was performing well at this time: However, the limitations of the platform itself have caused an influx of a large number of rug projects. NFT was hit immediately, and as projects such as CCC and Yumi joined the NFT exchange war, Entrepot further relaxed its review of NFT projects in order to retain market share, and new projects on it were also snatched up from the beginning. It has completely become unattended. Project parties that are operating normally will also choose their own way out due to the decline of the public chain. For example, Dmail, which initially adhered to the Dfinity ecology, finally turned to the multi-chain ecology after many unsuccessful attempts, and has since cooperated with Sei, Worldcoin, etc. Compared with the ecology of other public chains, the biggest difference between Dfinity is that its Defi sector is the most developed link in the entire ecology. There are several main reasons for this: First, Dfinity has not introduced EVM and cannot be like Avalanche or Fantom. Similarly, it can easily fork various classic projects; secondly, the token standards within the ecosystem are still not unified, which in a sense has greatly weakened the liquidity within the ecosystem; thirdly, and the most important point, that is, the unique structure of Dfinity itself makes it Different from the global transaction atomicity of traditional public chains, Canister interacts asynchronously and lacks a globally visible ledger, so its Defi project development is very difficult. Judging from the data of destroyed ICP and ICP total transaction volume, the ICP ecology has fallen into a very embarrassing situation: In summary, it is not difficult to understand the public’s enthusiasm for Dfinity in 2021. After all, the cryptographers included in the ICP team The number is the largest among all public chain projects, and the team lineup is also extremely luxurious: Intel, IBM, Coinbase, Facebook, Google wasm......At the same time, a number of well-known VCs are investors in ICP, including top institutions such as A16Z, Polychain, and Multicoin. ICP's own slogan "Decentralized AWS" is even more eye-catching, inducing countless people to invest real money and look forward to the arrival of the next milestone paradigm that will surpass Ethereum and EOS. But Dfinity’s technology is not conducive to its ecological construction - although Dfinity’s technical features are still very unique today, such as reverse Gas, Canister’s scalability, and the architecture itself can be infinitely expanded horizontally, etc., these features are not as good as the public chain. It did not work as expected during the war. In addition, Dfinity’s governance system also faces challenges, including a large number of junk proposals and excessive democratization, which have been mentioned previously. As a strong candidate for the former "ETH killer", it still has many potentials and advantages that public chains do not have, and these technical features are important chips for its development. However, at the same time, the ICP Foundation and its ecosystem itself also need to face current challenges and try to find new ways out!

Is Ethereum beginning to enter a slow decline? In the past year, the hype surrounding Ethereum’s technology upgrade in the crypto market has gradually cooled down. There is still a “Cancun upgrade” left, but it seems that the market is not buying it, and the trends of Ethereum-based tokens are somewhat weak. ​Recently, some people in the market believe that ETH will become the next EOS. Some commentators believe that this is not the case, but ETH does have some problems. Previously, Houshanke had a point of view: In this bear market, if you only choose one for heavy positions, BTC is the safest, and there is great uncertainty in ETH. Both have large market capitalizations. The future growth rate of ETH may not be as large as that of BTC, but the uncertainty is higher. From the perspective of risk and return, it needs to be treated with caution. This uncertainty does not mean that Ethereum will collapse immediately. After all, it is the "King of Ecology" with consensus second only to BTC. Even if it weakens in the future, it will be a slow process. Just like EOS back then, it wasn't until defi emerged on Ethereum in 2020 that believers gradually lost patience with it. The Ethereum ecosystem is so prosperous that even if it "weakens" in the future, it will still be stronger than other POS public chains. ​​​​The recent centralization issues of Ethereum and the weakening of the ecosystem seem to make institutions a little cautious. Judging from market information, institutions’ demand for increasing investment exposure in Ethereum has become very low, and the attraction is concentrated on BTC. . Due to the continued weakening of ecological activities or the migration to the L2 public chain, the fee income of the Ethereum network has dropped to the lowest level in April 2020, and there are no signs of improvement in the deserted ecosystem for the time being. The top ecological contributions on the Ethereum chain are: stablecoins, defi, NFT, speculation, etc. If you take it apart, it's not very optimistic. Stablecoins are the most important. In the early days, the Bitcoin network was the largest issuer of stablecoins. Later, it was transferred to Ethereum. Due to its cheaper Tron chain, it has become the most active public chain for stablecoins. Now many public chains have native stablecoins. Defi is also the most important ecosystem, but with the departure of the leading projects MKR and DYDX from Ethereum, it seems to indicate that Ethereum is not the only choice for the leading defi projects. This is especially true for NFTs and some speculative projects, and the hype on other chains is no less than that of Ethereum. What worries the market the most is the "centralization" issue. The Lido protocol is about to reach the 1/3 limit, and theoretically has the ability to attack the Ethereum network. Although it is not in their own interests for them to do evil or harm the network, in the code The world still needs "objective agreement" to restrain it rather than "subjectively believing that it will not do evil."Buterin and the Ethereum Foundation have also proposed some solutions, but none of them seem to be "perfect". There is another point: since Ethereum is the underlying protocol, it should be as simple as possible. If it is constantly patched, it will lead to The protocol became more and more bloated and ended up with more loopholes. In the encryption world, so far, except for Bitcoin, no other projects can be said to be absolutely safe. In every market cycle, with the exception of Bitcoin, the “mainstream coins” after the second place have undergone tremendous changes. Ethereum is still the "King of Ecology", and other public chains have no possibility of surpassing it in the current ecological environment. However, if a commercial-level alternative ecology emerges in the next market cycle, overtaking in a corner is also possible, such as web3. At the same level, it is biased towards the data business ecology. Technology is always changing and nothing is absolute. Vitalik also recently responded: The risk of cryptocurrency stagnation, privacy and open Internet infrastructure may all be reasons for the failure of ETH.