Why are Middleware Protocols Essential for Blockchain Ecosystems?
From the last bull run in 2017, the term “Ethereum Competitor” has been frequently used by aspiring layer 1 blockchains to position their technology and to attract users. The usual criticism around Ethereum includes speed, scalability, cost etc. and every team boosts a different design that could not only compete with Ethereum but also to match the performance of centralized systems. Three years into the “competition”, very few projects have delivered their promises — and although we did see a more vibrant multi-chain ecosystem, the popular ones are either forked from Ethereum directly or adapting Ethereum virtual machines.
However, adapting from Ethereum does not mean that these chain operators are not competing against each other or Ethereum. In fact, the competition is rather intense with companies representing different interests each channel their capital and resources to the chain that they support. For instance, Binance almost single-handedly built up the Binance Smart Chain ecosystem with their assets and traffic. FTX and Alameda, being a competitor to Binance, have turned to Solana to develop their own DeFi empire. In terms of Layer 2 chains, though still at an early stage in product and developer networks, Vitalik has been a fan of Optimism while many developers are in favor of zkSync. The competition between these chains has clearly been viewed as a zero-sum game — the amount of users and on-chain assets are like a pie, be it static or growing, the more one party gets, the less the others have to share. As a result, we see ecosystems compete for TVL, developers and applications — everyone wants to be the default choice of infrastructure. From a lens of developers and users, this competition is disastrous. By choosing to build on one blockchain, the trouble to migrate to another is huge both in terms of technology but also operations. There is no industry standard of development, so even basic things like integrating to a wallet need to be re-engineered. For sure, there are different bridges built by project teams to connect to Ethereum, but the technical designs are all different; it also causes trouble for integrating to these cross-chain bridges.
Therefore, we do see room for improvement for the blockchain as an infrastructure platform in terms of interoperability and developer tools as compared to the more mature technology platforms. For instance, the user experience for cloud services set a good example of what blockchain could be in the future. Comparing the current status of cloud and blockchain, middleware is a very important missing piece in the current blockchain ecosystem.
To quote from Microsoft Azure
“Middleware is software that lies between an operating system and the applications running on it. Essentially functioning as a hidden translation layer, middleware enables communication and data management for distributed applications.Common middleware examples include database middleware, application server middleware, message-oriented middleware, web middleware, and transaction-processing monitors”.
These middleware services make it easy for developers so that they don’t need to do the repetitive development of commonly used modules; rather, they can use the services provided by these operators. In the current cloud products, the product stack is already comprehensive to fulfill a lot of demands by applications.
Apart from the infrastructure layer, there are also various ready-made developer tools for function like messaging modules, web development etc. Moreover, with the advancement in technologies like no-code programming, the application development process is even more expedited.
To bridge the gap between blockchain development and cloud development, there are many angles for middleware protocols to improve on:
- More abstraction for the development modules
Rather than building walls among different ecosystems, it’s a better approach to help bridge the liquidity and developer experience among different blockchains. For instance, modules like connecting to cross-chain bridges, should be offered as an API, so that applications could easily offer the asset swap service for their users.
- Focus on end user experience
For crypto users, to use applications across different ecosystems is difficult. First, swapping assets from one blockchain to another is time-consuming and costly; centralized exchanges often serve as the direct intermediary in DeFi — which kind of defeats the purpose of fully decentralization.
- Crypto incentives for decentralized development
There are native advantages that crypto services have over middleware in cloud and traditional software development — the crypto economic incentives. With the native token design, middleware protocols could attract open-source developers to contribute and build the modules that they see value; as more users use these products, the contributors could be rewarded in crypto. Compared to the middleware development processes in the Internet, there is clearly more room for innovation for blockchain since it allows for bottom-up incentivized networks to form.
By sitting in between the layer 1 blockchain and applications, middleware solutions could capture value both from developers and end users. It also adds value for the layer 1 protocols as it helps improve the developer experience as many functions are already provided. We can see that by positioning as the future development framework for blockchain applications, Substrate has already offered products like runtime modules, client libraries, smart contract templates and so on.
Serving for the multichain future, Raydius is abstracting functions like bridging across different chains as well as swapping between different on-chain assets. The objective is straightforward — developers should not need to worry about choosing layer 1 or layer 2 blockchains as well as the integration work with Ethereum, they should be focusing on delivering the core function and use middleware protocols for the cross-chain functions.
Moreover, instead of delivering middleware solutions one-by-one, in the future, we should be able to see more platform driven tools. For instance, for each module that a project has already built and could be re-used, there could be a platform/marketplace to trade these open-source modules and get rewarded in either a fixed currency or the native currency by the application if they have one. It is a mutually beneficial movement both for open source contributors and dApp developers — on one hand, there are more source of revenue for contributors to foster active participation; on the other hand, it saves time for applications in that they don’t need to develop everything from scratch.
Currently, the middleware protocols are still at an early stage in the crypto industry with huge room and potential to capture more developers and eventually become a default development standard.
Reference:
https://azure.microsoft.com/en-us/overview/what-is-middleware/
https://insights.deribit.com/market-research/infrastructure-lego-the-middleware-thesis/
