Forked Up - The Daily Gwei #462
It's never been easier to copy and paste your way to riches.
It truly is insane how much money has been made off of “forks” in crypto over the years. I mean, there has quite literally been billions of dollars made off the backs of other people’s work over the last 3 years alone. This is most obvious in how many projects have forked the Ethereum codebase (specifically Geth), cranked up the throughput to achieve “scale”, slapped a token on the network, and engaged the marketing machine (as pseudotheos outlines below).
There are now 10’s of these Ethereum forks out in the wild with various tweaks having been made to them (the most popular Ethereum layer 1 forks being BSC and Avalanche’s C-Chain). There are also networks that didn’t start out as forks of Ethereum implementing “EVM-compatible” networks such as Cosmos’ EVMOS and Solana’s Neon EVM. As far as I’m aware, none of the layer 1’s that forked Ethereum have given anything back to Ethereum core developers - even after making literally billions of dollars off the back of their work.
Of course, there are also layer 2 networks that are EVM-compatible or equivalent and for good reason - the EVM’s moat is immense. Though unlike the forked layer 1’s, layer 2 networks like Optimism have promised to donate all of their centralized sequencer profits to public goods (and have already begun doing that). Not only that, but Ethereum layer 2 networks are net-positive for the Ethereum ecosystem since they benefit ETH as an asset and are value-aligned with the Ethereum network (rather than being competitive).
My main gripe with the layer 1 Ethereum forks is the way that they are marketed. Many of the project teams claim that they are more “scalable” than Ethereum when in reality all they have done is sacrifice decentralization by cranking up the gas limit, lowering the block time and greatly increasing the cost to run a full node. Sadly the marketing tends to work quite well (at least in the short-medium term) and the tokens value reflects that with most of these networks able to achieve multi-billion dollar valuations.
As I’ve said before, I think that the days of creating new layer 1’s by forking Ethereum/the EVM are pretty much over but we’ll continue to see this play out at layer 2. I mean, there are already 2 live forks of Optimism (Metis and Boba) that both have tokens attached to them - there’s just too much money to be made not to continue doing this. Though I do hope that these projects do at least try to give back as much as possible to the people who actually build the software that they fork - that way we can turn this all into a positive-sum game rather than the current negative-sum game that has persisted since the first economically relevant fork of a blockchain (Litecoin).
Have a great day everyone,
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All information presented above is for educational purposes only and should not be taken as investment advice.