Editor’s note: CoinList will begin Archway community sales on June 15, 2023 at 17:00 UTC. Archway is a Cosmos-native Layer 1 blockchain that allows developers to capture the value they create for the network through a novel, developer-centric economic model.
Recently, CoinList had a conversation with the Archway team and delved into Archway with 7 questions, such as the real-world problems Archway solves, the differences between Archway and other Layer 1 blockchains, Archway use cases, the utility of the ARCH token, and the trade-offs between building on Archway or developing one’s own application chain.
Blocking0xxz compiled the CoinList interview with Archway as follows:
1. What is Archway and what real-world problems does it solve?
Archway is a Cosmos-native Layer 1 blockchain with an incentive mechanism that allows developers to capture the value they create for the underlying network. Archway aims to create an economic framework that collaborates with developers rather than opposes them, achieved by programming rewards for developers based on the usage of smart contracts.
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In many cases, dApps built on Layer 1 blockchains like Ethereum do not benefit from the activity they bring to the chain because network fees are not inherently allocated to the application layer. To capture some of this value, some dApps launch tokens with little practical use, or charge users additional fees, but the return is usually low. Archway provides a way for dApps to benefit from the activity they create for the Layer 1 blockchain, achieving a synergistic relationship of both value creation and value distribution.
2. What is the intrinsic use case of the ARCH token?
The use cases of the ARCH token on the Archway network include:
1. Security. The ARCH token will secure the Archway blockchain through staking. Token holders can choose to stake their ARCH tokens with Archway validators, who share the responsibility of validating transactions and maintaining network security. In return, validators and stakers will receive a portion of token inflation.
2. Governance. The ARCH token will be the native governance token for the Archway network. Token holders will be able to propose on-chain upgrades, community decisions, parameter changes, etc. Correspondingly, stakers and validators will be able to vote on proposals in proportion to the amount of tokens they have staked.
3. Transaction Fees. The ARCH token will be used to pay for fees on the Archway network, which will be distributed to network validators and smart contract developers.
4. dApp Allocation. The ARCH token will be automatically allocated to developers based on usage of the smart contract within each block.
III. How is Archway’s protocol design different from other Layer 1 blockchains?
Archway has two custom modules that make up its value capture engine. These modules enable the Archway protocol to calculate and distribute ARCH token rewards based on the volume of transactions through smart contracts. These rewards consist of a portion of inflation and gas fees, as well as any additional fees developers choose to add.
In contrast, some other Layer 1 blockchains do not distribute value to the application layer. The few blockchains that have taken steps to distribute value back have done so by reallocating a portion of gas fees, but these gas fees alone may not compare to the value developers create. This is because gas fees on other Layer 1 blockchains may be very low, such that allocating a small portion does not have a productive effect. The Archway network natively provides a way to capture value beyond gas fees through various mechanisms such as inflation rewards and additional smart contract fees.
IV. What are some other incentives for developers to capture value on Archway besides the protocol itself?
The Archway Foundation recently launched a grant program to support ecosystem development. Additionally, Archway’s core contributors are available to help Archway developers build, deploy, and promote their dApps. The core development experience team behind Archway provides tools such as Arch3.js and a custom CLI to make deployment on Archway as frictionless as possible. Finally, the core team has created Area-52, a free interactive online platform that teaches developers of any skill level how to build and deploy dApps on Archway.
V. What is the future outlook for the Cosmos ecosystem?
The Cosmos ecosystem has a strong momentum and vitality, but has not yet reached its full potential. The technology behind the ecosystem has been applied in cases that do not necessarily require innovative technology. As time goes on and technology develops, use cases will become more refined. Through infrastructure that is currently being developed, this infrastructure will soon integrate and support other networks such as Ethereum and Bitcoin, and the development of IBC is moving towards a multi-ecosystem rather than just a multi-chain direction. This means that the Cosmos ecosystem has the potential to become the network that connects all networks.
Six, what advice do you have for developers who want to launch their first dApp?
Have a clear goal and think deeply about the end user and their needs. If you have an innovative project, you may want to launch a token or create your own blockchain to ride the hype that usually accompanies these two ideas. However, in order for a product to be successful and scale, it needs to solve real user problems.
Seven, when deciding whether to build on Archway or develop your own application-specific chain?
There are several factors to consider when deciding where to build. If the built application requires that level of customizability and it can be demonstrated that launching a utility token is necessary, then an application-specific chain is a good choice. Application-specific chain developers can create custom modules, allowing them to customize the network to their specific needs. Although building on a dedicated application-specific chain can provide developers with more fine-grained control, the cost of maintaining a blockchain is nearly $3 million annually. In addition, launching a validator set and creating a stable token economic design to ensure network security may be a daunting task.
Building a dApp on Archway, developers can focus on building and optimizing their dApp without worrying about protocol overhead, chain maintenance, and chain security. The smart contract module CosmWasm used by Archway is highly customizable, meaning that most developers can address their individual needs without full chain customization.
However, the beauty of building on the Cosmos network is that the end result is not a zero-sum game. Since CosmWasm is a module, the dApps deployed on Archway can subsequently be migrated to their own Cosmos native chain with minimal effort.
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