Rating of the best performing layer 1 blockchain protocols

Crypto technology has made incredible progress over the past few years, and now the blockchain protocol industry is fiercely competitive. While gains have been made in speed, scalability, and power consumption, the promise of Web3 and the growth of a blockchain-based internet are beginning to redefine the possibilities of the technology.

With Bitcoin, blockchain technology was first introduced as a financial tool to create and manage cryptocurrency. It quickly evolved into programmable money and smart contracts after the launch of Ethereum. Now, blockchain aims to counter the centralization of all databases, storage, and compute to support new innovative dapps and services.

As the industry evolves from a predominant focus on financial products to a breakthrough decentralized technology stack for Web3, a handful of key metrics are useful for benchmarking and evaluating Tier 1 competitors: transaction debit, finality, transaction cost, energetic efficiencyand on-chain storage cost.

This article presents a review of these major protocol metrics from public datasets and real-time dashboards to give a clear and comparative picture of how well these chains are currently performing.

Transaction throughput

For blockchain networks to attract users, they must be able to offer an experience that meets the expectations of today’s Internet users in a scalable way. This means providing fast website and application screen loads (read operations) and moderately fast data writes. Most blockchains perform quite well on read operations, but Layer 1 protocols can struggle to scale their data writes to accommodate millions of users while still providing good user experience.

Throughput is a metric that captures the scalability of a network – a blockchain’s ability to write data and update state for millions and billions of web users and Internet of Things devices. (IoT). In order to provide a satisfying user experience for mainstream Internet users, a blockchain must be able to process thousands of transactions per second. Only Solana and the Internet Computer demonstrate actual transaction speeds that accomplish this feat, though most of Solana’s transactions are voting transactions by validators. Voting transactions do not exist on other channels; the SolanaFM Explorer puts Solana’s true TPS at around 381. Other channels either have not generated the traffic needed to demonstrate high throughput or are technically unable to achieve high throughput.

Purpose

Finality refers to the average time that elapses between the offering of a new valid block containing transactions until the block is finalized and its contents are guaranteed not to be reversed or altered. (For some blockchains, such as Bitcoin, determining the time of finality can only be probabilistic.) This metric also affects user experience, as users are unlikely to use applications that take more than a few seconds to complete. operation.

Transaction costs

Blockchain has its roots as a financial product that can provide much lower transaction costs than traditional finance and can execute transactions faster. High transaction costs have shaped how we use the internet and monetize content. Because of these costs, content creators and apps tend to prefer higher transaction value models, such as subscriptions or bulk purchases of content. Transaction costs are usually correlated in some way to the value of their associated network tokens, so the following values ​​are current at the time of writing during the week of November 14, 2022.

Lower transaction costs can support the development of new revenue models for websites and apps, such as micro-transaction models like tips. For these types of patterns to emerge, blockchain transaction costs must be a fraction of the average expected transaction value.

Energetic efficiency

Industries around the world are striving to become more sustainable in the face of climate change. Energy efficiency has also become a major area of ​​focus in the crypto industry, where it can also be viewed as a measure of a blockchain’s ability to run and, by extension, scale.

Improving the efficiency of a blockchain not only decreases the carbon footprint of the technology stack, but also reduces the energy costs associated with the protocol. More energy-efficient networks and the applications built on them will have an advantage in an increasingly competitive market.

Chain storage cost

On-chain storage has been a persistent challenge for blockchains, which typically struggle to scale to meet the demands of consumer applications that require large data hosting. This has forced many developers to rely on Web2 intermediaries for storage and interfaces, compromising security, resiliency, and decentralization.

The Internet Computer was found to have the lowest and most stable cost for on-chain data storage among the top performing L1s. The “gas” comes in the form of “cycles,” with 1 trillion cycles pegged to 1 XDR (equivalent to $1.31 at the time of writing). Developers convert ICP to cycles to pay for data usage, with 1 GB per month requiring 329 billion cycles equating to $0.423, or $5.07 per GB per year.

The cost of storing data on L1 protocols generally fluctuates with the value of their associated network token, with the expense increasing with the value of the token and vice versa. Solana’s rent per byte-year is 0.00000348 SOL at the time of writing, which amounts to 3,477.69 SOL rent per GB per year. At SOL’s current price of $13.99, this equates to a rate of $48,652.

Cardano cannot currently store non-financial data such as media files and stores all transactions permanently. For simplicity, we omit the computational cost associated with processing the transaction. Priced at $0.32 at the time of writing, the cost of storing 1 GB of transactions depends on the size of each transaction, with 2 million transactions of 500 bytes each resulting in 354,708 ADA ($113,506.56 ) and 62,500 transactions of 16 KB each equivalent to 53,236.08 ADA ($17,035.54) representing the lowest per-byte charges.

Avalanche has a gas price of around 25 NanoAVAX, with 32 bytes fetching around 0.0005 AVAX. For simplicity, we omit the gas costs of running smart contract code and allocating storage and instead consider only the minimum cost of SSTORE operations. This makes storing 1GB of data cost around 15,625 AVAX. AVAX costs $13.24 at the time of writing, which works out to $206,875.

The congestion and high cost of Ethereum inspired the push towards on-chain efficiency, and it still sets the bar for spending. For simplicity, we omit the gas costs of running smart contract code and allocating storage and instead consider only the minimum cost of SSTORE operations. The network consumes 20,000 units of gas to perform the SSTORE operation on 32 bytes of data. By extension, it costs 625 billion units of gas for 1 GB of data. With the average cost of gas from 20.23 Gwei at the time of writing, this amounts to 12.64375T Gwei, or 12,643.75 ETH. With ETH at $1,225.46 at the time of writing, this equates to $15,494,409.

Conclusion

As the blockchain industry evolves into a next-generation technology stack capable of reopening the mainstream internet, only a handful of platforms have the technical specifications needed to deliver the user experiences expected by the majority of blockchain users. Internet.

The most successful Layer 1 networks will enable the development of applications and services that are not possible, including breakthrough features in the areas of security, micro-transactions, and decentralized data and application ownership.


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