The Promise of ICE
Back in June, in surprising fashion, ICON announced that the ICON ecosystem would be creating a new Layer 1 blockchain called “ICE.”
I wrote a lengthy piece back then explaining the reasons why ICON decided to take this step, which I encourage you to read. If you’re not very familiar with ICE, you should also read the original announcement on Medium.
What generated the most excitement within the ICON community — and arguably still does — was the promise that each ICX holder would receive an airdrop of the ICE token at a 1:1 ratio.
While most of the community continues to focus on the coming airdrop snapshot date, I’d like to take a bit of time to think about the actual blockchain itself and the potential for what it could become.
Over the past few months, we’ve seen what I believe has been a greater focus and level of attention within the crypto community on Layer 1 blockchains, particularly those that are “EVM (Ethereum virtual machine) compatible” as ICE will be.
As a quick reminder “EVM compatible” basically means the chain is sort of a copy/paste of Ethereum, meaning it’s easy to port Ethereum DApps to the new chain, and many of the tools available to Ethereum (such as MetaMask) are also compatible on EVM chains.
Here’s a partial list of EVM compatible chains (and their gas token). I have also included their current marketcap ranking (as of 9/22/2021):
- Binance Smart Chain (BNB) — #5
- Polygon chain (MATIC) — #23
- Huobi ECO Chain (HT) — #57
- Avalanche chain (AVAX) — #11
- Fantom Opera chain (FTM) — #46
- Harmony chain (ONE) — #75
Now, if you’ve been focused on crypto at all lately, you’ve likely noticed the amount of buzz that has been building around some of these chains, particularly Polygon, Avalanche, Fantom, Harmony, and of course Binance Smart Chain. I would argue that, outside of Solana, these chains have received the most hype and attention over the past few months, and their gas tokens have seen significant price growth as well.
Sure, part of the attention has been as a result of that price growth, but it does seem as though a number of users and builders are flocking to these types of chains, thus increasing the demand for the token.
There are a number of reasons this has become the case. First and foremost is the fact that these chains are basically adjacent to Ethereum, making it easy to quickly draw in the many thousands of developers who are comfortable building on Ethereum. Due to the EVM compatibility of these projects, it’s easy to quickly port (and improve upon) existing Ethereum DApps, thus creating near-instant use cases (and user bases) for these chains.
Of course, the increase in gas fees on the Ethereum have also priced out a number of users, who have gone searching for alternative chains, particularly those looking for DeFi yields.
Simply envision a cup (Ethereum) that is completely full of liquid, and as it overflows, the liquid falls into several other cups (the EVM compatible chains) below it.
Some of these chains do get some other boosts as well — for instance, highly-regarded VCs being early funders in exchange for tokens — but what I described above is the general dynamic that has been at play.
Ultimately, this is where ICE will ideally find itself in the near future — an EVM compatible chain that’s easy to build on and draw Ethereum (and other EVM chain) users onto. Beyond that, with the benefit of BTP, it should be even easier for these users and developers to move to ICE.
So what advantages does ICE potentially have that may put it not just among the list of EVM compatible chains above, but potentially superior to them? There are a few.
First and foremost is the notion that ICE will have a userbase of thousands right off the bat, due to the fact that a great majority of the ICON community will, at the least, be familiar with ICE, but also have a stake in the success of the chain as a result of the airdrop. While other chains were built from scratch and had to spend time growing a user base, ICE comes with one already built in to a certain degree.
In addition, with the early implementation of BTP between ICON and ICE, it will be even easier to migrate ICON users to ICE, as ICON (and potentially other IRC-2 tokens) can easily flow into the ICE chain.
For developers, this is a plus. You don’t want to build an application on a blockchain that nobody uses. In the case of ICE, those who want to build DeFi DApps can do so knowing there will be a swarm of users ready and waiting with capital to deploy (either in the form of ICE or ICON).
Similar to an existing user base, there will also be an existing developer base as well. We know there are many developers already building on ICON who will inevitably also be interested in building on ICE, knowing that the EVM compatibility — and the ability for Ethereum users to easily move over — could generate a significant user base beyond the foundational ICON user base.
However, even beyond this potential is the additional potential that BTP brings. Not only will it be easy to recruit users familiar with other EVM chains, but it will be easy to recruit users from BTP-connected chains, since migrating assets will be user-friendly, quick, and seamless.
When you combine the fact that a user base on ICE currently exists, a large amount of capital will be instantly available to that user base through an airdrop, and that it will be relatively easy to spin up new DeFi applications, we are looking at a blockchain that could theoretically see millions of dollars of TVL in it’s very early days — a metric that would certainly raise some eyebrows throughout the rest of the crypto industry.
From an architecture standpoint, ICE is utilizing the Substrate framework. You’re probably wondering “What the heck is the Substrate framework?”
In a nutshell, building a blockchain from scratch is hard. It takes a number of experts and a lot of time and resources in order to build and launch one successfully. That’s why the ICOs from 2017 often had to raise so much money — they needed resources to build and run the actual chain.
Substrate essentially is a kit of sorts for being able to build and deploy a blockchain quickly. The company behind Substrate (Parity) was founded by Gavin Wood (one of the original Ethereum developers/founders), and Substrake is what powers the Polkadot network.
Here’s a video of Wood using Substrate to build a blockchain in less than 60 minutes:
The most outstanding benefit of Substrate is the fact that it allows ICE to be built quickly, rather than us having to wait years for the chain to be ready.
An additional benefit is that chains running Substrate are able to easily integrate with the Polkadot ecosystem (although BTP, in the case of ICE, will also this as well).
Other projects running on Substrate include Chainlink, Ocean Protocol, Moonbeam, and Edgeware.
ICE is utilizing ParaState, a development-team that specializes in Substrate, to build out the chain. However, they aren’t the only team working on the chain:
In addition to Parastate, there will be several other teams working on the ICE Blockchain to grow the developer base, lead integrations, and drive activity. Stay tuned for announcements on these groups very soon.
To get a better understanding of Substrate, check out this helpful article.
Recently, Fantom and Avalanche (and others) have made headlines by offering significant incentive programs for developers and users.
In the case of Avalanche, it was introducing liquidity mining incentives to motivate users to try out their platform.
In the case of Fantom, it was an incentive for developers to attract liquidity to their applications.
Meanwhile, Solana has hosted hackathons and offered grant funding for builders.
When it comes to ICE, the following paragraph was included in the ICON Foundation article announcing the blockchain:
The initial supply of ICE tokens will be 25% higher than the supply of ICX, with this extra 25% being set aside to incentivize future core contributors to the ICE Blockchain.
While we still don’t have clarity on what exactly this looks like, its my hope that a (significant) portion of these funds will be used to generate a developer/liquidity incentive program similar to what Avalanche and Fantom have been able to offer.
In addition, it’s likely that CPS Funding will be available for builders on ICE as well, meaning developers can get funding for the projects they intend to build, if they desire.
Now, with a built in user base, ICE may not need these incentives as much as other platforms did. Yet, in a world where Layer 1 competition is only getting more rigid, deploying every advantage possible is critical.
A lot of ICONists seem eager about the ICE airdrop due to the fact it is “free money,” which is not incorrect, of course.
However, I think there’s a lot more to get excited for beyond the airdrop. We are positioned to potentially have our own Binance Smart Chain/Fantom/Avalanche in our own back yard, which everyone should be excited about.