HackMDStablecoin Blockchain Evaluation Framework
Framework Summary
This framework consists of a high-level checklist + deep-dive questions. The checklist items can be seen as generalized overviews of answers to the deep-dive questions. Use the answers you find for the deep-dive questions to answer the checklist items.
The checklist acts as a high-level overview of any given blockchain that's easy to reason about. anyone interested in details beyond the checklist can dig into the answers to deep-dive questions.
IMO, the ideal blockchain is one that has every item checked off on the checklist. If that's off the table we can always support more than 1 (e.g Polygon + USDC on Bitcoin/Lightning via Taro). If a chain seems mostly promising with a few downsides/concerns of any magnitude, we should try our best to sync with the team behind the chain to get details around whether anything is in the pipeline to address that downside/concern before nixing the possibility of using it.
Generalized Process for Blockchain Eval
Without being too prescriptive, evaluation of a blockchain can roughly look like the following:
- Copy/Paste the checklist and deep-dive questions into a separate doc and fill it out. Include a TL;DR summary at the top that covers your general assessment. Example Summary:
RSK has a lot going for it with low transaction fees and bridges into/out of Bitcoin and EVM compatible chains. The major downside that may toss it out of the running is that it can only support 11 transactions / second. Let's sync with IOV Labs to double click on whether they have increased throughput somewhere in their pipeline
- Float your eval doc to the rest of the team.
- If the chain seems worth pursuing, sync up with Emily/team in one of our slack channels to kick-off an effort to create a comms line between us and someone on their end (this can vary quite a bit depending on the angle/questions we have)
- Prep/send questions to their team
Checklist
- Are the transaction fees appropriate for the use-cases we're looking to tackle?
- no one is going to spend $150 in transaction fees to remit $20
- Does the transaction throughput allow for rapid growth/adoption for whatever we build?
- 5 transactions / second leaves no room for scalability
- Is Bitcoin interop supported? (e.g. bridges, native swaps)
- Alignment with Block's mission
- Is interop between EVM-compatible chains supported? (e.g. bridges, native swaps)
- Is the sentiment around the blockchain/ecosystem generally positive and/or trending in the right direction?
- We don't want no scrubs
- Use answers to the Sentiment deep-dive questions to answer this one
- Are there any known regulatory enforcement actions or complaints against the project that could create regulatory or reputational risk to TBD?
- Perform regulatory review and compliance due diligence on the project and founders
- Is the blockchain sufficiently decentralized?
- Probably want to think twice before committing to a Blockchain that Andreesen has 80% control of based on distribution of total token supply
- Use answers to the Tokenomics and Decentralization deep-dive questions to answer this one
- Is the ecosystem active, lively, and growing?
- Is the appropriate / necessary tooling available for us to easily integrate the chain?
- Lack thereof likely dictates how much we're going to hate our lives in the coming months
- answers to some of the Fundamentals and Ecosystem deep-dive questions will help answer this one e.g. support for gasless transactions, available SDKs, existing wallet interop etc.
Deep-Dive Questions
Provide answers for as many questions as makes sense. If possible, include source links for each answer you find!
Fundamentals
- Does a reserve-backed stablecoin already exist on the blockchain?
- Provide details and/or links
- What is the transaction throughput?
- What is the range of transaction fees?
- e.g. Polygon is
$0.001 > x > $0.2
- e.g. Polygon is
- How is the native token/currency acquired?
- e.g. available on many exchanges - coinbase, kraken etc.
- Is Bitcoin interop supported?
- e.g. RSK via peg-in/peg-out bridges
- Is EVM interop supported?
- e.g. RSK via token bridges for ERC20 tokens
- Are gasless/meta transactions supported?
- This is pretty much necessary for our use-case
Ecosystem
- What self-custody wallets support this blockchain and assets on it? e.g. Metamask has support for Polygon
- How is browser support provided?
- What other developer tooling is provided e.g. SDKs
- Think about this question from the perspective of integrating the chain into our own wallet
- How many people are in their discord channel?
- Github Pulse?
- find their github org, if one exists, click on repos, and do a quick survey of:
- How many repos there are
- How many stars there are for the top 3-5 repos
- the last time those repos were updated. It should say something like “Last updated 11 hours ago”
- Click into the top 3-5 repos and do a quick survey of:
- number of open pull requests
- number of open issues
- date of last opened issue
- find their github org, if one exists, click on repos, and do a quick survey of:
Sentiment
- Google pulse?
- Head over to google and search by the name of the blockchain or native cryptocurrency and look for the following:
- Check out the news articles. Look for negative press. Provide links
- Is there anything notable (awesome or horrifying)? Provide link(s)
- When was the most recent news article published? Are articles published often? or is it a barren wasteland?
- Head over to google and search by the name of the blockchain or native cryptocurrency and look for the following:
- Youtube pulse?
- Head over to youtube and search by the name of the blockchain or native cryptocurrency and search for the following:
- What is the viewcount of the top 5 videos?
- When was the most recent video uploaded?
- What are the general topics that are covered by the first page of videos? educational? “Why you should by X NOW!!! so that i can rugpull you”
- Head over to youtube and search by the name of the blockchain or native cryptocurrency and search for the following:
- Reddit pulse?
- Head over to reddit and search the blockchain/native cryptocurrency and look for the following:
- Does the blockchain have a dedicated subreddit?
- How long before you came across the first shitpost?
- When was the last time something was posted about the blockchain/native currency?
- is the general sentiment of the 1st page of posts 👍🏼 or 👎🏼?
- Head over to reddit and search the blockchain/native cryptocurrency and look for the following:
Tokenomics
- What is the total token supply in circulation?
- e.g. Polygon has a max total supply of 10 billion tokens, of which only about 7.5 billion are in circulation right now. The remaining 2.5 billion tokens will be unlocked periodically over the next 4 years
- What is the distribution breakdown of the total token supply? e.g. MATIC
- private sale (seed round + early supporters): 3.8%
- Binance Launchpad: 19%
- Team: 16%
- Advisors: 4%
- Staking Rewards: 12%
- Foundation: 21.86%
- Ecosystem: 23.33%
- What is the average 24h trading volume over 30 days?
- use something like Yahoo Finance
Decentralization
- What is the consensus mechanism?
- e.g. PoW, PoS, Federated, Byzantine Fault Tolerance. Provide insight around whether you think this is kaka or not
- What is the incentive structure for miners/validators?
- Who controls the incentive structure?
- e.g. the founding team, DAO-based
- How many active nodes are on the network?
- try to find details around stuff like: # of added nodes per month, +/- node variance
- Is there sufficient documentation around running your own node / becoming a miner/validator?
- Are there any hosted node providers, mining/validating pool services?
- Is there a centralized entity or group of developers who maintains control of the project?
- How are voting rights distributed? Does any one party control a majority of the vote?
