How does Fusion (and AnySwap) compare?
Ethereum has become the most highly adopted blockchain, with a multitude of projects launching their tokenomics on top and a number of tools being built to enhance use by all kinds of different entities. Yet the base protocol of Ethereum doesn't offer anything unique, at least when compared to a couple of the forks, which has continued to enhance what Ethereum started.
Ethereum is also still a very expensive and not very scalable Proof of Work protocol and although it's doing its best to transition to a Proof of Stake consensus with a much higher throughput this has yet to happen, and is happening in a stage-wise transition. In the meantime users of Ethereum find themselves charged with insane gas fees, sometimes exceeding 100 USD and whether or not this will end soon or not is very unclear.
Fusion has no such overcrowding issues and being a PoS version of Ethereum it can do everything that Ethereum can and more (such as QS, TL and USAN). This also makes it very easy to use all the tools built for Ethereum with Fusion. A good example of this is the popular wallet Metamask which is easily customized to work with Fusion. Ethereum and Fusion addresses are the same, so moving from Ethereum to Fusion is extremely easy. Even porting over an entire tokenomics, would be quite doable. Something that may well become necessary for many projects if gas fees on Ethereum continue to remain high.
There are however, many, many chains that also can work just like Ethereum and who could replace it just as easily as Fusion could. So, what advantages does Fusion have over these chains?
In many cases Fusion will actually be more expensive and have less throughput than these alternatives, but this doesn't really matter (at least not now), because none of the chains (including Fusion) are anywhere near their scalability limits. These chains could all grow 100 - 1000 times and could still easily serve more people. Since there are so many chains that could effectively replace Ethereum, perhaps it's best that it's not really entirely replaced, but rather complemented by a number of different chains serving various purposes.
Fusion would most likely not be the "High speed/high throughput" chain in this network of chains. Instead it'd be the chain most highly specialized in advanced financial transactions. Fusion's Quantum Swaps for example open up the possibility to perform any type of OTC-deal with crypto-assets in a completely decentralized way. While Fusion Time-locks opens the possibility to trade with your future interest and to perform secure renting of NFTs or real world assets such as houses or cars tied to these.
Further Fusion owns an advanced interoperability solution that is currently uniting all of crypto through AnySwap making it a very likely melting pot for all manners of crypto assets. Fusion's USANs also make it ideal as a main address point, since it makes it possible to keep all your crypto-assets under a very simple number instead of a complex HEX address (while the latter still works like always).
Another advantage Fusion has over most Geth-forks (who are often PoA instead of PoS)is that it's more decentralized and open to any anonymous node, just like Ethereum. This should be a major benefit in terms of trust, especially as the network grows in value and becomes more and more decentralized by all manner of entities, who in no manner know one another.
If we are to worry about decentralization, then this is a major worry for Chains that are spearheaded by a centralized exchange. Such chains will never be decentralized and will always be very dependent on the organization that put them into motion. Thus Fusion's main advantage here is once again that it's more decentralized and open to any anonymous nodes and that it has QS, TL and USAN.
Fusion does though have some disadvantage to these chains and that is that their highly connected to fiat gateways through their respective CEXs and that these chains have through their CEXs reputation been able to quickly build up their activity and liquidity in a very short time.
Based on current trends it may well be these chains who in a first run takes the stick from Ethereum. But I believe given enough time, people will seek themselves once again towards a more decentralized solution. With Chainge the ready access to fiat gateways may also be coming directly to Fusion.
Though there may certainly be merit and great benefits with entirely new types of blockchains, they will always run into the issue of lacking full compatibility with what's being used the most right now (Ethereum). As such the most likely new big solution (if any) will more likely be an improved version of Ethereum. If a blockchain is too different, it will be more distanced from DeFi and will become reliant on more complex solutions to be able to interact with the rest of the space. Luckily Fusion's DCRM (through AnySwap) may well be just the thing that will make this happen.
Fusion is a so called "Layer 1" solution. It's in no way dependent on the original Ethereum, but is fully compatible with it because it's been built from the same base. Layer 2 solutions are another approach to scalability which exist as a chain on-top of a chain.
Though layer 2 solutions may be able to work fast and remain on-top of Ethereum there will always be cases of having to move back and forth to the base layer which effectively makes them useless simply because the base layer is too expensive and the layer 2 layers aren't really adopted or accepted by anyone at all.
So far the adoption rate of layer 2 solutions hasn't at all picked up any speed and various institutions seem to prefer dealing only with layer 1 solutions. Perhaps this will change in the future and to an extent that may well be Ethereum's best hope of remaining relevant in a situation of constantly increasing gas prices.
Food for thought here though is that Ethereum isn't the only layer 1 network that could have complimentary layer 2 solutions running on it. The same solutions could just as easily be applied to Fusion and other layer 1 solutions and since Fusion has unique functions built into its base layer, but might not be the fastest network of all, it actually becomes a very good candidate to eventually have layer 2 solutions of its own running on top. If we let imagination run a little wild: How about one for high speed transactions and another one for privacy?
Cosmos and Polkadot have a fundamentally different approach to projects like Fusion and WanChain. To hook a blockchain into Cosmos that blockchain has to be reconfigured at its core as to become fully compatible.
The situation is similar with Polkadot, except that they're less focused on reforming existing blockchains and more focused on making spinning up entirely new blockchains (that will be PolkaDot compatible) an easy and hassle free process. Neither of these projects however are truly seeking a solution to make all of crypto compatible. It's more a case of attracting projects that want to be compatible and help make them so.
MPC type interoperable solutions like Fusion/AnySwap, however, more seeks to hi-jack all of crypto and bring it into interoperability whether it wants to or not. You can read more about that interoperability here which becomes a form of decentralized custody, currently guarded by DCRM nodes but in the future the custody may well be decentralized by the Fusion network itself.
Fusion is often compared with WanChain in particular as both projects came to be at around the same time and indeed have many things in common such as being forks of Ethereum, seeking to revolutionize the future of finance and also both have their own version of sMPC type interoperability in the form of decentralized custody.
REN is somewhat a different beast altogether as it's a project that first and foremost focused on bringing interoperability to Ethereum and they were quite early in bringing BTC to Ethereum, however, they have been notably late to actually make their code public or to do anything more meaningful, while Fusion's AnySwap quite quickly pile achievement after achievement when it comes to advancing interoperability and bringing chains together.
The race is likely to continue though and maybe all of these sMPC solutions will eventually end up uniting all of crypto, all in their own way.
Chainlink is without a doubt the most highly used and sought after oracle solution. It's a project that has formed some form of "partnership" with almost every other crypto project out there. Oracles are of course the way for real world data to be able to speak to blockchains.
In fact this was quite an important part of Fusion's original white paper, where it was stated that Fusion would be capable of something called Multi trigger mechanisms, which is basically smart contracts that could become executed, either by user intervention, by time or by oracles relaying real world data. This is obviously a very useful type of contract for all manner of real world application (including financial applications of course).
In terms of developing and adapting oracles, it must be admitted that Chainlink is way ahead of Fsuion. Luckily Chainlink is so open to partnerships, that a solid one exists also with Fusion. So once Chainlink is fully integrated with DCRM and Fusion the Multi trigger mechanisms from the white paper should be able to become a reality. The time-layer is of course already heavily integrated into the Fusion blockchain, clearly evidenced with the Time Slicing functionality.
A big worry for many old Fusionites is that Fusion's Interoperability isn't actually sitting on Fusion, but on a side-network of DCRM nodes controlled by AnySwap. Since interoperability is what initially drew them to Fusion this is a big worry. These worries are always calmed by assurance that the plan is for DCRM to eventually run on Fusion, though some have lost faith in this happening and has thus moved fully into AnySwap considering this the "true Fusion" (so to speak).
It is a little funny that perhaps one of the biggest threats to Fusion is considered to be something that came out of Fusion itself and is still very much working together with Fusion to reach the same goals. It should also be noted that AnySwap will never seek to run a chain hosting its own assets. These will always be existing on other chains, and Fusion will always be AnySwap's main chain which host the original ANY-contract. It is also noteworthy that wherever AnySwap goes, aFSN is brought along as a bridgable asset. Needless to say AnySwap helps Fusion get many assets onto it and once a connection can be made between FRC20s and Fusion assets it should also make Fusion's Swap market much more interesting.
Technically (possibly with the exception of Bancor) Ethereum based swaps have no advantage over AnySwap and since they are on Ethereum they're also incredibly slow and expensive to use. Yet they somehow remain popular with whale holders who keep them liquid.
So far AnySwap has in no way been able to compete with their liquidity. Many believe that the main problem is making AnySwap known, and there is likely some merit in this, but the true issue is perhaps that the biggest whales are still married to Ethereum and as such have no intention of moving away from there.
Eventually perhaps they will become isolated, as small users simply can't afford 100 USD just to make a swap. After Andre Cronje highlighted AnySwap and the integration with SushiSwap and 1inch is done, perhaps we will begin to see an increase of liquidity on AnySwap.
These swaps, although not expensive to use, often suffer the similar issue of not really being liquid, just like AnySwap. The most clear distinction with AnySwap is that they only exist on one chain, whereas AnySwap has a working version on multiple chains with an ability to move assets between the chains. This is of course much more advanced, and sure way to stay relevant and not become isolated on a single chain that isn't used very much.
Possibly these types of solutions are currently true competitors to AnySwap. However, AnySwap is actually working on a similar solution for it's Ethereum version with zk-rollups and may also find its own way on how Ethereum can be made "cheap" After AnySwap has this as well, the cross chain functionality will still remain its killer feature that other swaps simply don't have to the same extent.
Someone might be thinking that if Fusion has AnySwap, why does it also need Quantum Swaps, do these really have a use-case? The answer to this is that they fulfill completely different needs. AnySwap and other AMMs play on the active market.
A swap made on these AMMs will affect the market as a whole due to arbitrage opportunities. But Quantum Swaps is something entirely different. Quantum Swaps is for OTC-trading, standardized "set" deals and can also deal with time slices.
In fact I believe these markets will compliment each other in quite interesting ways. Take the case of LP-tokens for example. These have a very specific value, but there's no place to trade them unless you split them back into the original tokens. But on the Quantum Swap market, you could actually try to trade them even without necessarily having to give up the APY they are currently earning.
Thus this combination of two very different types of DeFi markets should be super interesting to witness once it becomes both possible and well advertised.
Last modified 2yr ago