Layer by Layer Issue 43: Canto, Dogechain, and Polkadot

The crypto industry as it exists today has been shaped by constant iteration. Through this process, ideas that achieve significant commercial or cultural impact lay the groundwork for protocols providing new services and better experiences for end users. Crypto’s particularly rapid cycles of trial and error are fueled by a combination of factors, some of which include the strong foundation of open-source, transparent development, the ease of transferring money on blockchains - which in turn facilitates speculation, and the growing stream of both retail and institutional investments into the sector over the past several years. 

As we have explored in the past, blockchains themselves are dynamic by nature, often requiring major upgrades to keep pace with evolving market demands. During periods of growth, these demands can shift even more quickly as the entry of fresh capital into crypto provides heightened financial incentives for both investors and developers to support the products that stand the best chance of capturing a broad market share. In 2020, the emergence of core decentralized finance (DeFi) protocols on Ethereum, such as the Uniswap decentralized exchange (DEX) and the Aave and Compound money markets, set the stage for a new wave of on-chain activity in 2021. This activity was pushed even further by a slew of largely-derivative protocols launched on an ever-growing list of layer 1 (L1) chains, followed by the advent of widespread financial trends such as retail investing in meme stocks and NFTs.