Why We’re Excited for Moonbeam
What is Moonbeam?
Moonbeam is an Ethereum-compatible parachain on the Polkadot network and is a bet on both Polkadot and the Ethereum Virtual Machine (EVM) succeeding. Most simplistically, Moonbeam is Ethereum built on Polkadot.
Moonbeam is so far the most adopted smart contract-first blockchain on Polkadot because of the strategic decision to specialize on building a seamless on-ramp for EVM deployments and the team’s execution capabilities.
Polkadot and Ethereum Background
Polkadot is a heterogeneous multi-chain system founded on the idea that there will be many blockchains. Polkadot provides a framework for building blockchains and a consensus system that connects those blockchains together.
Ethereum boasts the most developer activity of any blockchain, making Solidity the most popular smart contract programming language. Ethereum has a massive network effect and developers will continue deploying to Ethereum as a smart contract platform.
Polkadot was built with Ethereum compatibility in mind. Existing applications on Ethereum have expensive gas costs due to network congestion and limited throughput. Developers are seeking new markets for their applications and an upgrade path for their existing codebases.
By deploying to Moonbeam, developers can leverage their existing work and team, while porting into a next-generation framework with the latest technology. Developers like that with Moonbeam they don’t have to start from scratch, but get the best of both the Ethereum developer ecosystem and Polkadot’s blockchain framework Substrate, which provides unique features like on-chain governance, one-click upgrades, extensible transactions, and off-chain workers.
How Moonbeam Fits into Polkadot
Our thesis at Hypersphere is that Polkadot parachains must specialize on key functions that serve the overall network. Specialization enables cross-parachain applications to gain efficiencies and achieve higher throughput than a single generalized computation framework that is encumbered by its generality.
Applications being deployed to Polkadot are hosting important logic on the Moonbeam platform because they need a primary place from which to execute transactions, call other parachains, and leverage interchain messaging features. The architecture of cross-chain applications living on Polkadot can consist of a controller component that lives on Moonbeam and farms out work (e.g. data storage, asset support) to other specialized parachains on Polkadot. Moonbeam hosts pre-compiled contract APIs to make this easy.
Moonbeam’s Edge: Specialization
Moonbeam’s decision to specialize in EVM compatibility allowed the team to focus their efforts on developing a best-in-class product, including novel solutions for EVM compatibility. Developers can deploy existing Ethereum-based smart contracts to Moonbeam without needing to rewrite or configure their code.
The Moonbeam team developed extensive documentation, tutorials and APIs to support developers. Moonbeam is the onboarding platform for developers and users approaching Polkadot because the onboarding experience is familiar for users and developers alike.
The Moonbeam team helped build Frontier, the primary suite of tools enabling a Substrate blockchain to run Ethereum contracts natively with the same API and RPC interface. Frontier allows developers to migrate front-end DApps without major changes. While Frontier is open-source, Moonbeam’s forward thinking and contributions to the network have resulted in incredible support from the community, and numerous protocols lining up to partner with them.
We believe that through specialization, Moonbeam has already cornered the EVM smart contract execution layer on Polkadot. Other parachains that add EVM compatibility are integrating a number of different offerings, which adds layers of complexity to their codebases, user experience and marketing efforts.
If you ask almost any development team building on Moonbeam they will tell you that the Moonbeam team is one of the most responsive and helpful Layer 1 team they’ve worked with. Best-in-class developer relations coupled with an active grants program make Moonbeam an appealing destination for projects. Developer relations and support really matters for projects who have limited bandwidth and many platform options.
In addition to Moonbeam being very developer friendly, it is also user friendly. Moonbeam developed an account-based model, meaning that users are able to interact with all tokens and DApps with their Ethereum wallet addresses. Notably, this means that users are also able to connect with all DApps using ERC wallets including Metamask. All tokens on Moonbeam’s parachain will experience this account-based model as well. This differs from other parachains integrating Frontier, as they currently rely on Substrate-based accounts and require Substrate wallets in addition to Ethereum wallets.
All tokens on Moonbeam’s parachain will experience the unified account-based model and familiar ERC-20 token standard. For developers this means full compatibility with existing Ethereum developer tools and infrastructure such as Truffle, Hardhat, Metamask, and Etherscan. This provides developers with seamless integration to toolkits they are already familiar with. Moonbeam integrated with the Etherscan.io block explorer, the ChainLink oracle solution, The Graph indexing protocol and an approved Gnosis multi-sig fork, providing developers with familiar tools they can leverage to deploy their applications or protocols quickly.
Moonbeam is led by a best-in-class leadership team with an extensive track record building successful technology companies. The Moonbeam project is being developed by Purestake and the Moonbeam Foundation. Purestake was founded by Derek Yoo and the company has extensive experience developing and operating both blockchain and traditional software stacks.
Derek is building an impressive team with an execution driven culture. Because Moonbeam is built using Substrate, Moonbeam does not have to deal with low level blockchain components. The benefit of application-specific blockchains like Moonbeam is the team can focus on integrating and marketing its product. The Moonbeam team has shown more than capable of delivering on the front-end while Parity Technologies maintains the back-end.
Key Team Members:
Derek Yoo (CEO & Founder) - serial-as-a-service technology entrepreneur. Co-Founded of Fuze, built global UCaaS cloud Platform. Grew company to 700 employees and from $0 to $150M/year revenue run rate.
Stefan Mehlhorn (COO) - technology entrepreneur with 25 years experience in operational leadership roles. Most recently head of TechOps at Samsung Pay, responsible for infrastructure, security, and customer support.
Alan Sapède (VP of Engineering) - 10 years of experience, hands on, leading technical teams implementing complex backend systems. Scaled Fuze backend services to large numbers of users. Previously worked on the Google StreetView team.
How Moonbeam Compares to other Layer 1 EVM Blockchains
Moonbeam will live on the Polkadot relay chain, giving it access to shared security, robust developer tools, on-chain governance, and a vibrant, developer-first ecosystem. The Polkadot relay chain provides cross-parachain interoperability through a messaging passing protocol. This compares to existing cross-chain bridges that have been notorious for hacks, slow, expensive processing, and centralization.
The Polkadot infrastructure stack is maturing quickly and many exciting projects are launching in the coming months. As interoperability between parachains becomes more efficient and XCM matures, we expect new cross-chain applications to deploy applications that live on multiple blockchains at once without end-users realizing.
We believe Moonbeam has an edge over other Layer 1 EVM blockchains due to the unique features Polkadot offers. Other EVM compatible Layer 1s like Avalanche and Binance Smart Chain have garnered significant attention this year because:
More protocols are launched on Ethereum than any other network
Developers are comfortable working with solidity smart contracts
Users often prefer EVM for the simple reason that their Wallet address is static, and they can access all networks from one wallet (namely, Metamask)
Ethereum gas fees have gotten to a point where they are unaffordable for most users
Primary EVM Compatible Layer 1s:
Notes on table:
Market data from CoinMarketCap, as of November 16, 2021 daily close
Binance Smart Chain excluded from average because it is also an exchange token
If BSC is included, the average fully diluted valuation for EVM compatible Layer 1s is $32.1B circulating and $44.8B fully diluted
Moonbeam has already achieved significant traction, with many of the most popular Ethereum projects planning their launch on Moonbeam. Sushiswap, Chainlink, Lido, Gnosis-approved fork and The Graph, are just a few recent examples of applications announced. Onboarding important protocols creates a significant network effect, incentivizing more developers to follow while buttressing Moonbeam’s position as the go-to smart contract platform on Polkadot. Developers and liquidity beget more developers and liquidity, making us more confident in Moonbeam’s important role in the ecosystem.
Moonriver (MOVR) is Moonbeam’s sister network and is currently live on the Kusama relay chain. Kusama is a public pre-production environment for Polkadot. You may read more about Kusama here. Moonriver won the second parachain slot during the initial Kusama parachain auctions in June 2021. Since its launch, MOVR has performed extraordinarily well. Moonriver crowdloan participants have achieved a 1,336% ROI, while the next highest ROI for a parachain crowdloan is just 59%. Market data is as of 11/16/21.
MOVR is currently the top parachain across the following metrics:
Total Value Locked (TVL)
MOVR is the largest Kusama-based parachain by fully diluted valuation:
Note: Market data from CoinMarketCap, as of November 16, 2021 daily close
The GLMR token is used for three primary purposes on the network.
Gas transaction fees (similar to Ethereum and other the smart contract platforms)
20% to onchain treasury
Staking (Proof of Stake)
5% annual inflation
1.0% to collator nodes operating the parachain
1.5% to a Parachain Bond Reserve for future lease periods
2.5% staking returned to tokenholders delegating to collator nodes
Governance rights in the on-chain governance system
Crowdloan start date: November 5, 2021 (ongoing)
Token reward pool: 10% of total supply
Reward distributions: 30% unlocked at launch, remaining 70% vested over the course of the parachain lease (96 weeks)
Tokens per DOT contributed: 10% split pro rata based on your % of DOT contributed to pool - (Investor DOT Contribution / Total DOT Contributions) * 100 Million GLMR
Wallets supported: Talisman, Polkadot.js extension, Math Wallet, Just Mining, Nova Wallet, Fearless Wallet, Nutbox
Supporting exchanges: Parallel, Binance, Kraken, KuCoin, OKEx, Huobi, Gate.io, MEXC
Moonriver parachain auction performance: 1,336% ROI for crowdloan participants in their Kusama parachain auction, based on current MOVR & KSM prices as of 11/16/21 close.
Note that 30% of total supply was distributed as rewards for MOVR crowdloan participants, vs. 10% of rewards for GLMR (see estimated fully diluted valuation to break even versus staking rate)
Moonbeam leverages the killer features of Polkadot and provides developers with a familiar execution environment. By focusing on EVM compatibility on Polkadot, Moonbeam has already announced important integrations with many of the most popular Ethereum protocols. Moonbeam’s adoption has created a network effect where other application and protocol developers perceive Moonbeam as the obvious choice for where to deploy.
This is the first in a series of blog posts on parachains on Polkadot. The next in the series will be highlighting Acala.