This proposal will not include bland suggestions like doing marketing, community service, and partnerships. These are common to crypto projects, and will not be difference-makers on their own. The advice provided below comes from a background in product management and marketing, managing a crypto fund for six years and witnessing these $10 billion+ chains emerge and the strategies they used to differentiate themselves, and scale to heights others did not.
While there are 237 blockchains publicly listed, only six blockchains have a market cap of over 10 billion (Ethereum, Solana, BNB, Cardano, Avalanche, and Polka Dot). Among L2’s, there are no chains with a market cap over $10B, so we’ll focus on the two chains with over $10B FDV- Arbitrum and Optimism.
Let’s begin by examining the common factors of chains that are $10B or larger. Below is an outline of the subjects we’ll cover.
- Strong Ecosystem of Attractive, Quality Projects
a. Project Fund
b. Support Top Projects
c. Innovation
- Clear User Value Proposition
- Validation: Support from major crypto entities
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Strong Ecosystem
Attracting high quality projects, whether natively built or “imported” from other chains, is crucial to a blockchain’s success. When people wake up everyday, they don’t think to “use Ethereum”. They are considering individual use-cases like “trading for a token on Uniswap” or “borrowing against their Bitcoin on AAVE”. Quality projects entice users to invest their efforts on the chain on which that product resides.
Project Fund
Blockchain projects utilize project funds to provide support for native projects or “imported” projects from other chains. Examples of this include:
- Binance Smart Chain’s $100M Accelerator Fund (for projects on BNB Chain)
- Web3 Foundation $40M Grant Program (for Polkadot Projects)
- Optimism allocates 25% of its tokens to Seed Fund (for Optimism projects)
These project funds identify quality projects on other chains to attract to their chain and provide them with grant money to fund the transition. They also discover promising fledgling projects and provide them with the funds to develop further. In other cases, they find a project that already has traction and fund them to help them scale.
Support Top Projects: Example of GMX on Arbitrum
One of the best examples of building a successful ecosystem by supporting projects that customers love is Arbitrum’s funding of GMX. The financial reward given to them by Arbitrum bolstered their presence on the chain.
GMX is a successful project on Arbitrum for perpetual trading. GMX was the largest grant recipient from Arbitrum’s project fund, and was approved to receive 12 million ARB- $15 million at the time (source 1, source 2). It is crucial to recognize that Arbitrum saw the potential of GMX to grow its user base and that it was significant enough to traders to migrate to a different chain.
On receiving its grant from Arbitrum, GMX announced its GMX V2 incentive program, which offered yields of 60% and higher on “Arbitrum, Solana, Uniswap, Litecoin, Dogecoin and XRP pools.” This is good example of how rewarding projects results in them rewarding their users financially, in turn driving further usage.
Venture Capital Variation
A variation of the project fund is partnering with a venture capital fund or forming such a fund and having it be funded by venture capitalists, to invest in the same purpose of building the chain ecosystem. An example of this is Avalanche’s creation of Blizzard, a $200M fund for Avalanche projects funded by prominent venture capitalists such as Polychain Capital, Dragonfly Capital, and Republic Capital
This strategy may work best for ZK Fair since it may not have the project capital that is often allocated to blockchain projects. It instead can rely on outside money to power the projects in its ecosystem.
Innovation
Building a strong product ecosystem isn’t just about looking back at what worked with categories such as perpetual exchanges, but to the future for blockchain categories that are growing in significance and will be important in the future such as: Real-World Assets, DePin (Decentralized Physical Infrastructure), and Artificial Intelligence.
As ZK Fair is a validium chain, and has advantages as far as transaction cost and scalability, gaming, social media, and NFTs would be the kinds of projects that could derive advantages in building on ZK Fair or migrating to Zk Fair from their existing chain. There are projects building these solutions on Ethereum and other chains where it would far more economical to build on a Validium chain like ZK Fair and keep their data off-chain.
ZK Fair should approach promising projects in these spaces with hard data on how much their project can save financially by using Validium, and how much more user-friendly it will be for their customers, given the chain speed.
Clear User Value Proposition
When chains like BNB chain and Avalanche came out, they offered a less expensive way to participate in DeFi than Ethereum. Many new to crypto got their first experience on BNB chains where transactions cost just a few cents whereas similar transactions cost several dollars on Ethereum. Polkadot offered a unique proposition for developers with a Layer 0 protocol where builders could create their own chain with a consensus mechanism optimized for specific categories of projects.
Unique value propositions must not just offer something new to end-users; the difference they make must be significant enough for them to value it to the point of using the particular chain.
ZKFair should emphasize its advantages to end-users as a Validium chain. For users to play a game on most blockchains is a slow, unrewarding and often needlessly expensive experience. With ZkFair keeping most data off-chain, experiences with decentralized social media or games can be fast and affordable.
Today ZKFair’s website and social media presence don’t mention these advantages prominently. It discusses that it is “community owned” and mentions technologies like Celestia which people may not be familiar with.
Increased emphasis on its key differences in speed and cost, ideally with concrete data on the cost savings for users and the speed difference for things like blockchain gaming, will help ZK Fair build its brand perception among developers and crypto users.
Validation
Cardano and Polkdadot were developed by former founders of Ethereum.
Arbitrum was founded by a Princeton professor and a former CTO of the White House.
Optimism was created by a team of former Ethereum foundation researchers.
BNB Chain was created by Binance, the largest centralized crypto exchange.
Many of the founders of successful chains had a background that lent trust to their undertaking. Because ZK Fair is a community project and the contributors are anonymous, where ZK Fair can gain validation and trust in the eyes of crypto users is its support from prominent crypto projects like Polygon.
While crypto often calls itself “trustless”, the reality is that users must engage in a great deal of trust when using a new chain. They simply lack the proficiency or time of kicking the tires on the code and consensus mechanism to feel confident the chain will not misuse their funds or subject their funds to hacks or exploits. Users place greater trust in a chain than a project because all of their funds on the chain are potentially at risk versus those simply on a lending platform or DEX.
The fact that Polygon has been a blue-chip crypto project for years and backs ZK Fair means that users can rest assured that even though the project is anonymous, as thousands of users have trusted Polygon over the years, they can also trust this chain that they support and that their Chain Development Kit (CDK) technology was used to build.
ZKFair should emphasize their support from Polygon and work to leverage its partnership with Polygon so that new users will have confidence in their new blockchain. While ZkFair’s website mentions the Polygon CDK technology, it doesn’t contain reference to Polygon’s supportive comments of ZK Fair on social media, for example. Reflecting this support in its communication may distinguish ZK Fair from the hundreds of chains that launch but lack this level of blue-chip blockchain endorsement.
In Conclusion
Blockchains that make it to $10 billion do certain things right. They identify promising projects, financially support them, and collaborate with them to ensure they have adequate development support. ZK Fair can find those projects by connecting with developer communities or approaching projects that will benefit from Validium.
They emphasize their unique advantages as a chain- whether that be affordability, speed, or something else- and build a positive narrative around that to the developer community and to the wider crypto industry. Zk Fair can emphasize its transaction cost and speed advantages to developers and users.
They also distinguish themselves from the endless new chain announcements by emphasizing the support they have from reputable players in the space, inspiring a level of trust in users who might otherwise be wary of risking their funds on a new blockchain. ZK Fair has strong blue-chip backing that it can emphasize to build user trust.
By adopting these strategies, ZK Fair can best position itself to become one of the few $10 billion blockchains.