VSC, a smart contract layer 2 project at the top of Hive blockchain, might be one of the most bullish narratives of Hive as it has already brought a functional service that you can send BTC to any Hivian / Hiver who has enrolled in the platform.
The best part of the BTC tipping service may be the harmony of it with our ecosystem. As you know very well, the transactions on Hive are not paid in money, rather, we are paying every single transaction with resource credits (which are generated automatically thanks to your Hive Power). Similarly, the transactions are designed to be free in VSC's DeFi Layer on Hive
Some may see the development as unnecessary or risky but I believe this is an important milestone for Hive to grow its ecosystem.
Locking Value from Outside
The Layer 1 and Layer 2 projects use 2 functional ways to onboard more people and bring new projects to its ecosystem:
1 - Incentive programs are designed to attract developers and new projects that may add value to the ecosystem. If they go viral, it affects the prices, the size of the community, and the approach to the future developments.
2 - Use of Bridges: When it is possible to bridge 1 ETH from the Ethereum mainnet to another L1 or L2, the smart contracts lock the same amount of money on Ethereum mainnet and print, or unlock, the same amount of ETH in the target blockchain.
Assume that ETH can be bridged to Hive ecosystem:
If this happens, VSC project receives 1 whole ETH from the sender. Then, the team secures the ETH but gives a wrapped / Hive form of ETH for the sender to use it in the ecosystem. This 1 whole ETH might be used to buy Splinterlands tokens like SPS, and DEC, or the ETH can be used for LEO tokens, POB, or CTP tokens.
Eventually, when we can feed the ecosystem via bridges and Layer 2 projects, the market and the projects in Hive will be affected positively.
Generating Value on Hive
In terms of feeding the ecosystem through value generation, there are 3 examples that come to my mind:
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InLEO generates value from Ads and uses the money from buyback
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Splinterlands accepts several cryptocurrencies and grows its DAO holdings. Also, it locks millions of dollars worth of valuation in Validator Nodes, Cards, SPS tokens, etc.
Finally, the newest and one of the most projects, VSC, locks Bitcoin inside and gets a $5 fee from those who register the system.
To be able to sustain their operations, they also need a way to cover their expenditures and make gains. I strongly believe that every project of Hive should find a way to generate an outsourced value-generation model that can feed the units of Hive directly or indirectly.
While the whole crypto ecosystem focuses on Layer 2 and cross-chain systems, Hive needs to go cross-chain, too. Considering the facilities of our blockchain, it will not be a big deal. However, we need more advancements similar to the one VSC has brought us.
To accelerate the process of developing cross-chain products, the projects may also utilize the other Hive projects' experience and collaboration to grow together. If you remember, we already experienced the case when SPS opened a liquidity pool on CubFinance to make SPS token a multi-chain GameFi token 2 - 3 years ago.
How do you feel about the Hive Layer 2 project by VSC?
Share your thoughts below 👇
Hive On ✌🏼
Posted Using InLeo Alpha
