After suffering repeated delays, Ethereum 2.0 has “lost credibility”, Kadena’s co-founder and president Stuart Popejoy told Modern Consensus.
The hybrid blockchain company has announced that it is launching a decentralized exchange called Kadenaswap that will be able to handle 480,000 transactions per second.
According to Kadena, the issues with the Ethereum blockchain extend beyond congestion, which has seen gas fees as high as $99 per transaction as the network “buckles under the strain” of DeFi activity.
The blockchain technology company has also warned that Solidity, Ethereum’s smart contract language, is “unsafe and confusing” and suffers from “crippling security difficulties”—pointing to recent hacks of Balancer, Bzx, Opyn and dForce as examples.
Kadenaswap is set to use Pact, which is described as a “small, easy-to-learn language” that offers superior levels of safety and security.
One of the biggest challenges facing the company will involve encouraging users to join the platform—and to this end, Kadenaswap is planning to offer a free month of gas in October. This will be accompanied by a developer engagement program, and a partnership designed to build full-node incentivization for miners.
Taking on Ethereum
Kadena, the first company to come out of J.P. Morgan’s Blockchain Center for Excellence, argued in no uncertain terms that Ethereum is compromising the growth of decentralized finance platforms.
The company said in a release that, even though Ethereum is currently the infrastructure for the majority of DeFi activity, developers are scrambling for alternatives—and non-DeFi platforms have been “crowded out” of using the blockchain altogether.
In an email interview with Modern Consensus, Popejoy explained that 480,000 TPS is achieved through Kadena’s public network of 20 chains—each of which have three spokes that can handle 8,000 TPS. “The Kadena public blockchain just scaled from 10 to 20 chains and has no limits on its eventual size, so 50, 100 or 1,000 chains are all feasible future targets,” he wrote.
Speaking about the current market landscape, he said: “Ethereum’s congestion and high gas prices are providing a strong incentive for DeFi projects to consider other platforms. However, most of the technology for migrating token value across chains is centralized and proprietary. Truly decentralized bridge technology has been slow to come to market. Once it does, and if Ethereum 2.0 continues to slip, we will see significant volume move to platforms that can meet the needs of DeFi.”
So that ticks off the scalability issue—at least for now. Is Popejoy not worried that Ethereum will become flavor of the month once again when 2.0 finally launches, affecting demand for Kadenaswap?
“No, because Ethereum 2.0 has lost credibility as a project that will ship in any kind of predictable timeframe,” he wrote. “We’re more focused on our competitors for new platforms, in that we feel that the details of alternate platforms will matter. For instance, a lot of governance tokens have similar structures and weaknesses to the governance of Proof-of-Stake platforms, where rich insiders can easily and permanently dominate the protocol. Proof-of-Work systems like Kadena ensure that the platform will not suffer from this kind of effective centralization.”
He also stressed that building on Kadena makes it easier for value to be moved from one platform to the next. “While EVM (Ethereum’s smart contract engine) is present on multiple platforms, they have no open and secure way to communicate with one another,” he wrote.
Kadena’s hybrid blockchain platform has three parts. These are Chainlink, a sharded and scalable layer-1 proof-of-work public network; Kuro, a private blockchain; and the Pact smart contract language.
Kadenaswap is set to scale on the base layer to ensure that extra capacity isn’t at the expense of decentralization, while Pact will ensure that major protocols can be accessed—irrespective of the chain they originate on. The company claims this smart contract language means interoperability can be achieved with BTC, CELO, DAI, DOT, LINK, and ETH.
Kadena is considering launching a governance token called KDAX to allow stakeholders to participate in setting incentives.
Its decentralized exchange is set to go live in Q4 2020 this year, and further details of the company’s roadmap are set to be revealed in October.
When pressed on what this roadmap will include, Popejoy wrote: “A significant part of our Q4 2020 roadmap will be dedicated to DeFi. For example, creating bridges to other networks. We are also exploring wrapped ERC-20 tokens. We hope to share news regarding partnerships with other leading DeFi projects as well.”