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2024: The End Of EVM Dominance | Rushi Manche

By Lightspeed

Published on 2024-04-25

Rushi Manche of Movement Labs shares insights on the evolution of blockchain VMs, L2 scaling, and the potential end of EVM dominance in 2024.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

The Rise of Alternative Virtual Machines

The blockchain industry is witnessing a significant shift away from the dominance of the Ethereum Virtual Machine (EVM). Rushi Manche, co-founder of Movement Labs, believes that 2024 will be the "year of the VM" where developers and users alike will realize that the EVM is not the be-all and end-all of blockchain technology. This transition is driven by the emergence of next-generation Layer 2 solutions on Ethereum and innovative Layer 1 blockchains that offer superior performance and scalability.

Manche argues that everyone within the EVM ecosystem will need to adapt as these next-generation solutions gain traction. The so-called "next-gen" platforms boast higher throughput and better scalability, making them increasingly attractive to developers and users. This shift is not just about performance, but also about improving user experience and addressing the security concerns that have plagued EVM-based systems.

The Evolution of Blockchain Infrastructure

The blockchain space has come a long way in terms of infrastructure development. Just five years ago, it was nearly impossible to build an application that could support a thousand concurrent users on-chain. Today, we're seeing networks like Solana handling thousands of transactions per second, albeit with some challenges during peak demand.

Manche believes that we're currently at about 70% of the infrastructure readiness required to support Facebook-scale applications on-chain. He predicts that within the next year and a half, further optimizations and improvements will bring us to a point where blockchain infrastructure will be capable of supporting such large-scale applications.

Movement Labs: Bridging EVM and Next-Gen VMs

Movement Labs is positioning itself at the forefront of this transition. The company is building a network of Move-based blockchains, leveraging the Move programming language originally developed by Facebook for its Libra (now Diem) project. Manche and his team are creating a solution that combines the liquidity and security benefits of Ethereum with the performance and scalability advantages of next-generation VMs.

The core offerings of Movement Labs include:

  1. M2: A flagship Layer 2 rollup on Ethereum using the Move VM
  2. Move Stack: An execution layer framework compatible with various rollup frameworks
  3. M1: A shared sequencer network built on Avalanche subnet technology

This architecture allows Movement Labs to offer backwards compatibility with EVM contracts while providing a pathway for developers to transition to the more secure and performant Move language.

The Benefits of Move VM

Manche emphasizes several key advantages of the Move VM over traditional EVM-based systems:

  1. Security: Move incorporates formal verification through the Move Prover, which checks for bytecode and memory safety at runtime. This can significantly reduce the risk of smart contract vulnerabilities and hacks.

  2. Performance: The Move VM is designed to be highly parallelizable, allowing for better throughput and scalability compared to the EVM.

  3. Developer Experience: Move's design makes it easier for developers to write secure smart contracts, with features like built-in asset types and a more intuitive programming model.

  4. Compatibility: Movement Labs' solution allows for the coexistence of EVM and Move contracts on the same chain, enabling a smooth transition for developers and users.

Addressing the Challenges of L2 Scaling

One of the key issues in the current Layer 2 landscape is the fragmentation of liquidity and applications across different rollups. Users often find themselves needing to bridge assets between various L2s, leading to a suboptimal experience. Movement Labs aims to address this through their shared sequencer network, M1.

The M1 network allows for better interoperability between rollups within the Movement ecosystem. Transactions between different rollups can be processed within a single block, enabling atomic composability and a seamless user experience. This approach also creates interesting tokenomics, as validators need to stake tokens to participate in sequencing and earn fees.

The Path to Mass Adoption

Manche believes that the key to achieving mass adoption of blockchain technology lies in onboarding new developers, particularly those from Web2 backgrounds. He sets ambitious goals for Move's market penetration, aiming to increase it from the current 3-5% to 10% by the end of 2024, and potentially 20% in the following year.

To achieve this, Movement Labs is focusing on several initiatives:

  1. Developer Education: Providing resources and support to help developers learn Move and understand its advantages over other languages.

  2. Hackathons and Accelerators: Organizing events to attract new talent and foster innovation within the Move ecosystem.

  3. Embracing Meme Culture: Recognizing the power of memes in driving adoption and excitement around new technologies.

  4. Leveraging Ethereum's Network Effects: By building on Ethereum, Movement Labs can tap into existing liquidity and user bases while offering improved performance and security.

The Future of Layer 2 Solutions

As the Layer 2 ecosystem continues to evolve, Manche predicts a consolidation of shared sequencer networks. While many major Layer 2 projects are working on their own shared sequencers, he believes that only two or three systems will ultimately prevail in the long run.

The success of these systems will depend on their ability to attract high-quality projects and developers. Manche sees the Optimism ecosystem, with projects like Base, as currently leading the pack in terms of DeFi adoption.

Solana's Role in the Evolving Landscape

While the focus of Movement Labs is on bringing next-generation VM capabilities to the Ethereum ecosystem, Manche acknowledges the significant impact that Solana has had on the blockchain space. He views Solana's recent network congestion issues as a positive sign, indicating real user demand and adoption.

Manche states, "I don't get the FUD on Solana. If there are people like backs actually, Solana, I'm like, my response is it's bullish as Solana's going down, right? Like, they actually have users on chain. Wow. They actually have block space that's filled. They actually have market demand."

This perspective aligns with the broader trend of blockchain platforms focusing on real-world adoption and usage rather than purely theoretical scalability metrics.

The Importance of Security in Blockchain Development

One of the core focuses of Movement Labs is improving the security of smart contracts. Manche points out that the EVM ecosystem loses billions of dollars annually due to smart contract hacks and vulnerabilities. The Move VM, with its built-in formal verification capabilities, aims to address these security concerns.

Manche's goal is to "make security sexy again" by demonstrating that high performance and robust security are not mutually exclusive. This approach is crucial for attracting institutional players and mainstream users who may be hesitant to engage with blockchain technology due to perceived security risks.

The Role of ZK Proofs in Layer 2 Scaling

Movement Labs is taking a unique approach to Layer 2 scaling by implementing ZK fraud proofs. This hybrid solution combines elements of zero-knowledge proofs and optimistic rollups. Manche explains that this approach allows for faster withdrawals and better security assumptions without incurring the high proving costs associated with full ZK-rollups.

While the long-term vision may involve transitioning to full ZK-rollups, Manche believes that the current infrastructure and market demands are better served by this hybrid approach. This pragmatic stance reflects a broader trend in the blockchain industry of balancing theoretical ideals with practical implementation constraints.

Composability and Interoperability in the Multi-Chain Future

As the blockchain ecosystem becomes increasingly multi-chain, ensuring composability and interoperability between different networks becomes crucial. Movement Labs addresses this challenge through its shared sequencer network and support for standards like IBC (Inter-Blockchain Communication).

Manche envisions a future where users can seamlessly interact with applications across different chains without needing to understand the underlying technical complexities. This aligns with the broader industry goal of improving user experience and reducing friction in blockchain interactions.

The Impact on DeFi and Gaming

Decentralized Finance (DeFi) and blockchain gaming are two sectors that stand to benefit significantly from the advancements in VM technology and Layer 2 scaling. The improved performance and security offered by platforms like Movement Labs can enable more complex financial applications and immersive gaming experiences.

Manche sees potential for both general-purpose chains and app-specific chains within the Movement ecosystem. While smaller DeFi projects may benefit from deploying on a general-purpose chain, larger applications with specific requirements might opt for their own dedicated chain using the Move Stack.

Attracting Institutional Liquidity

One of the challenges faced by alternative VM ecosystems has been attracting institutional liquidity. Manche notes that during bear markets, many institutional players are hesitant to engage with non-Ethereum based blockchains. By building on Ethereum and leveraging its security and liquidity, Movement Labs aims to overcome this hurdle.

The company has already secured commitments for nearly $800 million in Total Value Locked (TVL) from family offices and liquidity funds. This demonstrates the growing institutional interest in next-generation blockchain solutions that can offer improved performance without sacrificing the security guarantees of Ethereum.

The Role of Meme Culture in Blockchain Adoption

Interestingly, Manche emphasizes the importance of embracing meme culture as part of Movement Labs' growth strategy. He recognizes that meme coins and culture have been one of the biggest drivers of crypto adoption to date. By incorporating elements of this culture into their ecosystem, Movement Labs hopes to generate excitement and attract a broader user base.

This approach reflects a growing trend in the blockchain industry of balancing serious technological development with community engagement and viral marketing strategies.

Challenges and Future Outlook

While Movement Labs has made significant progress, Manche acknowledges that there are still challenges ahead. The primary focus for the coming year will be on increasing Move's market penetration and attracting new developers to the ecosystem.

Manche sets ambitious goals, aiming to increase Move's market share from the current 3-5% to 10% by the end of 2024, and potentially 20% in the following year. Achieving these targets will require a combination of technical innovation, developer outreach, and strategic partnerships.

The Potential for Facebook-Scale Applications on Blockchain

One of the most intriguing prospects discussed is the potential for Facebook-scale applications to be built on blockchain technology. Manche believes that within the next year and a half, blockchain infrastructure will be ready to support such large-scale applications.

He points out the irony that Move, the language originally developed by Facebook for its blockchain project, may be the key to enabling this scale of adoption. This full-circle moment underscores the rapid pace of innovation in the blockchain space and the potential for technologies developed by tech giants to find new life in the decentralized ecosystem.

The Importance of Developer Tools and Education

Throughout the discussion, Manche emphasizes the critical role that developer tools and education play in driving adoption of new blockchain technologies. While the EVM currently benefits from a large ecosystem of tools and developers, Manche argues that this advantage is primarily due to its first-mover status.

Movement Labs is investing heavily in developer education and tooling to make the transition to Move as smooth as possible. This includes providing resources for both experienced blockchain developers and those coming from Web2 backgrounds.

The Evolution of Consensus Mechanisms

While much of the focus is on execution environments, Manche also touches on the importance of consensus mechanisms. Movement Labs' M1 network leverages Avalanche's Snowman consensus, which offers fast finality – a crucial feature for a shared sequencer network.

This hybrid approach, combining innovative execution environments with proven consensus mechanisms, showcases the pragmatic approach that many next-generation blockchain projects are taking. By building on existing strengths while introducing novel improvements, these projects aim to offer the best of both worlds to developers and users.

The Role of Tokenomics in Layer 2 Ecosystems

Manche discusses the importance of well-designed tokenomics in creating sustainable Layer 2 ecosystems. He criticizes the current state of many L2 tokens, describing them as "meme coins" with little intrinsic value or buy pressure.

Movement Labs aims to address this by creating a token model where validators must stake tokens to participate in sequencing and earn fees. This creates natural buy pressure and incentivizes long-term holding and participation in the network.

The Potential for Cross-Chain Applications

As blockchain ecosystems become more interconnected, the potential for cross-chain applications grows. Movement Labs' architecture, which supports both EVM and Move contracts, positions it well to facilitate the development of applications that can seamlessly operate across different blockchain environments.

This interoperability could lead to new types of decentralized applications that leverage the strengths of multiple chains, potentially revolutionizing areas like decentralized finance, gaming, and social media.

The Impact on Traditional Finance and Web2 Companies

The advancements in blockchain scalability and security discussed by Manche have significant implications for traditional finance and Web2 companies. As blockchain infrastructure becomes capable of supporting Facebook-scale applications, we may see increased interest from major tech companies in building on or integrating with blockchain platforms.

This could lead to a new wave of adoption and innovation, bringing blockchain technology to mainstream users through familiar interfaces and brands.

The Role of Formal Verification in Smart Contract Security

One of the key advantages of the Move VM emphasized by Manche is its built-in support for formal verification through the Move Prover. This technology has the potential to significantly reduce the occurrence of smart contract vulnerabilities and hacks, which have plagued the EVM ecosystem.

By making formal verification more accessible and integrated into the development process, Movement Labs aims to set a new standard for smart contract security. This could be particularly appealing to institutional players who have been hesitant to enter the DeFi space due to security concerns.

The Future of Blockchain Gaming

While much of the discussion focuses on DeFi applications, Manche also touches on the potential for blockchain gaming. The improved performance and security offered by next-generation VMs could enable more complex and engaging on-chain gaming experiences.

Movement Labs' architecture, which allows for app-specific chains, could be particularly well-suited for gaming applications that require dedicated resources and customized environments.

The Importance of User Experience in Blockchain Adoption

Throughout the discussion, Manche emphasizes the importance of user experience in driving blockchain adoption. While security and decentralization are crucial, he argues that blockchain platforms need to prioritize ease of use and seamless interactions to attract mainstream users.

This focus on user experience extends beyond just interface design to include aspects like transaction speed, cost, and cross-chain interoperability. By addressing these pain points, next-generation blockchain platforms aim to make interacting with decentralized applications as simple and intuitive as using traditional Web2 services.

The Potential for New Financial Instruments

The improved performance and security offered by platforms like Movement Labs could enable the creation of new types of financial instruments and decentralized applications. With higher throughput and more secure smart contracts, developers may be able to implement more complex financial logic and create innovative DeFi products.

This could lead to a new wave of financial innovation, potentially bringing more sophisticated financial tools to a broader audience through decentralized platforms.

The Role of Blockchain in Web3 Development

As we move towards a Web3 future, the advancements in blockchain technology discussed by Manche will play a crucial role. The ability to support high-throughput, secure, and composable applications on-chain is fundamental to realizing the vision of a decentralized internet.

Movement Labs' approach of combining the security and liquidity of Ethereum with the performance advantages of next-generation VMs positions it as a potential key player in this transition.

The Importance of Community in Blockchain Ecosystems

While much of the discussion focuses on technical aspects, Manche also emphasizes the importance of community in building successful blockchain ecosystems. The embrace of meme culture and focus on developer education highlight the recognition that technology alone is not enough to drive adoption.

By fostering a strong and engaged community, blockchain projects can create network effects that drive adoption and contribute to the long-term success of the ecosystem.

Conclusion: A New Era of Blockchain Innovation

The insights shared by Rushi Manche paint a picture of a blockchain industry on the cusp of a major transformation. As we move beyond the dominance of the EVM, new possibilities are emerging for more secure, scalable, and user-friendly decentralized applications.

Movement Labs' approach of combining the best aspects of Ethereum with next-generation VM technology represents an exciting direction for the industry. By addressing key pain points around security, scalability, and user experience, projects like this have the potential to drive the next wave of blockchain adoption.

As we look towards 2024 and beyond, it's clear that the blockchain landscape will continue to evolve rapidly. The end of EVM dominance may well mark the beginning of a new era of innovation, bringing us closer to the vision of a truly decentralized and accessible Web3 future.

Facts + Figures

  • Movement Labs recently announced a $38 million Series A funding round
  • Rushi Manche predicts 2024 will be the "year of the VM"
  • Current Move market penetration is estimated at 3-5%
  • Movement Labs aims to increase Move's market share to 10% by the end of 2024, and potentially 20% the following year
  • The EVM ecosystem loses an estimated $4.5 billion annually due to smart contract hacks
  • Movement Labs has secured commitments for nearly $800 million in Total Value Locked (TVL)
  • Solana recently faced network congestion issues at around 1000-2000 TPS
  • SWEI achieved a peak of 66 million transactions in a day
  • Manche estimates current blockchain infrastructure is at 70% readiness for Facebook-scale applications
  • Movement Labs' M1 network is built on Avalanche subnet technology but only stakes its native token
  • The Move language was originally developed by Facebook for its Libra (now Diem) project
  • Movement Labs supports both EVM and Move contracts on the same chain
  • The company is implementing ZK fraud proofs as a hybrid scaling solution
  • Manche predicts only 2-3 shared sequencer systems will ultimately prevail in the long run
  • Movement Labs is targeting both experienced blockchain developers and those from Web2 backgrounds

Questions Answered

What is Movement Labs building?

Movement Labs is building a network of Move-based blockchains. Their core offerings include M2, a flagship Layer 2 rollup on Ethereum using the Move VM; Move Stack, an execution layer framework compatible with various rollup frameworks; and M1, a shared sequencer network built on Avalanche subnet technology. This architecture allows for backwards compatibility with EVM contracts while providing improved security and performance through the Move language.

Why does Rushi Manche believe 2024 will be the "year of the VM"?

Manche believes 2024 will be the "year of the VM" because he anticipates a significant shift away from the dominance of the Ethereum Virtual Machine (EVM). This transition is driven by the emergence of next-generation Layer 2 solutions on Ethereum and innovative Layer 1 blockchains that offer superior performance and scalability. As these new solutions gain traction, developers and users will realize that the EVM is not the only option for building and interacting with blockchain applications.

How does Movement Labs address the issue of fragmentation in the L2 ecosystem?

Movement Labs addresses the fragmentation issue in the L2 ecosystem through their shared sequencer network, M1. This network allows for better interoperability between rollups within the Movement ecosystem. Transactions between different rollups can be processed within a single block, enabling atomic composability and a seamless user experience. Additionally, the M1 network creates interesting tokenomics, as validators need to stake tokens to participate in sequencing and earn fees, incentivizing long-term participation in the network.

What advantages does the Move VM offer over the EVM?

The Move VM offers several advantages over the EVM:

  1. Enhanced security through built-in formal verification (Move Prover)
  2. Better performance and scalability due to its parallelizable design
  3. Improved developer experience with features like built-in asset types
  4. Easier implementation of complex financial logic
  5. Potential for reduced smart contract vulnerabilities and hacks

These features make Move an attractive option for developers looking to build more secure and efficient blockchain applications.

How is Movement Labs attracting new developers to their ecosystem?

Movement Labs is attracting new developers through several initiatives:

  1. Providing extensive developer education resources
  2. Organizing hackathons and accelerators
  3. Embracing meme culture to generate excitement
  4. Leveraging Ethereum's existing network effects
  5. Offering a smooth transition path from EVM to Move
  6. Focusing on both experienced blockchain developers and those from Web2 backgrounds

By combining technical innovation with community engagement and strategic marketing, Movement Labs aims to grow its developer ecosystem rapidly.

What is the significance of Movement Labs' hybrid ZK fraud proof approach?

Movement Labs' hybrid ZK fraud proof approach combines elements of zero-knowledge proofs and optimistic rollups. This solution allows for faster withdrawals and better security assumptions without incurring the high proving costs associated with full ZK-rollups. By taking this pragmatic stance, Movement Labs aims to balance theoretical ideals with practical implementation constraints, addressing current market demands while leaving room for future transitions to more advanced solutions.

How does Movement Labs plan to achieve Facebook-scale applications on blockchain?

Manche believes that within the next year and a half, blockchain infrastructure will be ready to support Facebook-scale applications. Movement Labs contributes to this goal by:

  1. Improving the performance and scalability of their Layer 2 solution
  2. Enhancing security through the Move VM and formal verification
  3. Focusing on user experience and seamless cross-chain interactions
  4. Leveraging the Move language, which was originally developed by Facebook
  5. Building developer tools and education resources to facilitate the creation of large-scale applications

By addressing these key areas, Movement Labs aims to create an environment where building and running Facebook-scale applications on blockchain becomes feasible.

What role does tokenomics play in Movement Labs' ecosystem?

Tokenomics plays a crucial role in Movement Labs' ecosystem. Unlike many L2 tokens that Manche criticizes as "meme coins" with little intrinsic value, Movement Labs aims to create a sustainable token model. In their system, validators must stake tokens to participate in sequencing and earn fees. This creates natural buy pressure and incentivizes long-term holding and participation in the network. By aligning economic incentives with network participation, Movement Labs seeks to create a more robust and valuable ecosystem.

How does Movement Labs view the potential for cross-chain applications?

Movement Labs sees significant potential in cross-chain applications. Their architecture, which supports both EVM and Move contracts, positions them well to facilitate the development of applications that can seamlessly operate across different blockchain environments. This interoperability could lead to new types of decentralized applications that leverage the strengths of multiple chains, potentially revolutionizing areas like decentralized finance, gaming, and social media. Movement Labs believes that this cross-chain functionality will be crucial in the evolving multi-chain future of blockchain technology.

What impact could Movement Labs' technology have on traditional finance and Web2 companies?

The advancements in blockchain scalability and security offered by Movement Labs could have significant implications for traditional finance and Web2 companies. As blockchain infrastructure becomes capable of supporting large-scale applications, we may see increased interest from major tech companies in building on or integrating with blockchain platforms. This could lead to a new wave of adoption and innovation, bringing blockchain technology to mainstream users through familiar interfaces and brands. Additionally, the improved security and performance could make blockchain solutions more attractive to traditional financial institutions, potentially accelerating the integration of decentralized finance with existing financial systems.

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