The Legitimate Advantages of Ethereum Above Other Smart Contract Platforms
Kain Warwick, founder of decentralized investment platform Synthetix, has succinctly organized his views on why Synthetix chose Ethereum over EOS, and what advantages Ethereum has accrued in the last 5 years of its existence, August 27, 2019.
Ethereum’s Monopolistic Advantages
Synthetix initially looked into EOS as a way to deploy their project, but they were turned off by a multitude of factors that made the deployment experience full of friction.
Justin Moses, CTO of Synthetix, spent months doing research on EOS and found the tooling to be so basic it would take an illogically high amount of effort to support a smart contract complex enough to launch Synthetix.
The quality of developer tooling on Ethereum, in their opinion, is unmatched at the moment.
Blockchains require social consensus on a non-protocol level to be decentralized and well functioning. Other platforms have found it tough to replicate the kind of social consensus seen on Bitcoin and Ethereum.
A recent report from Electric Capital showed that almost a quarter of all open-source developers are working on Ethereum. The constant influx of talent to the network is the strongest point from a security and developmental perspective.
Additionally, capital allocation has rendered Ethereum the clear winner. Previously, Warwick believed we would see an environment where multiple platforms via for market share and dominance. But none of them have been able to replicate Ethereum’s ability to enable innovative solutions that attract capital. DeFi is growing frighteningly fast and investors would probably be better off allocating to Ethereum projects rather than competitors.
The Network Effect
The final insight, and the best one, is his view on Ethereum’s network effects being vastly undermined. In a world where platform competition thrives between Android and iOS, Chrome and Firefox, as well as Dell and HP; we expected to see the same trend emerge here.
Warwick believes this competition exists only when the end-user is closest to the platform. On a smart contract platform, users will flock to a neat UX and good functionality. So their choice isn’t between Ethereum and EOS – it’s between Compound and MakerDAO (lending platforms built on Ethereum).
Developers will choose the platform easiest for them to create their project on, and simple logic dictates that this would be the network with the largest existing developer pool with the most number of successful projects.
With the likes of Yahoo/Google and IBM/Microsoft, we have often seen that first-mover advantages don’t last very long in tech. But given the huge differences in the technology and governance this time around, this trend might be ending.