Before you build your blockchain startup atop Ethereum, which is what most people in cryptoworld do, take a step back and survey the field. With a little comparison shopping and a lot of hustle, you can secure a blockbuster deal with one of Ethereum’s rising challengers.
Blockchain platforms like Stellar, NEO, DragonChain, Zen Protocol, and dozens of others have unique technical advantages that may be a better fit for your project than Ethereum. And these challengers are flush with cash, hungry for startups like yours to join their ecosystem, and willing to cut deals to make that happen.
Ethereum was a revelation when it was released in 2015, enabling anyone to build complex, decentralized smart contracts. But its one-size-fits-all approach and recent growing pains have made it vulnerable. Cyrus Khajvandi, COO and cofounder of Mobius, took a hard look at Ethereum for his project and doesn’t mince words: “It’s too slow, too insecure, and too expensive to scale and handle real applications,” he told me. “Not many people notice this yet because many people are trapped by group-think.”
Khajvandi chose Stellar for its speed and “exponentially cheaper” transaction costs. He’s not the only one. Last month, Kik announced it was abandoning Ethereum for Stellar, citing similar complaints. That was a big deal: Kin’s Kik is a top-100 coin.
But technical fit is only one reason to choose a challenger platform. By building on Stellar, Mobius received development support, business introductions, social media help, and one of the biggest grand prizes in crypto: Stellar CEO Jed McCaleb on its advisory board. No surprise, Mobius’s token sale sold out in two hours.
Jacob Ner-David, founder of VinX Network, which is tokenizing wine futures, agrees with this approach. VinX recently eschewed Ethereum to become one of the first projects built atop Zen Protocol, a financial blockchain platform. By choosing a more specialized blockchain, VinX dramatically decreases development time and cost. The company also enjoys a close partnership with the Zen Protocol team, which is already touting VinX at conferences and in its Telegram channel. (Disclosure: I’m an adviser to VinX.)
While no one wants to disclose this, I’ve also heard of blockchain startups being directly funded by the platforms they choose. I think this is a trend we’ll see accelerating as platforms evolve and competition heats up.
Choose Ethereum, and no Ethereum fan will give you credit for doing so; you’re token #26,224 (and counting!). But choose NEO, and every NEO investor will know your name and root for you, financially and on social media. That’s because your success gives their platform validation and, more importantly, an excuse for their platform’s coin to go up in value.
Don’t get me wrong. Getting a challenger’s attention won’t be easy. They’re inundated with business inquiries (I know that DragonChain’s incubator program has a long backlog), so approach them like you would a top-flight VC firm, leveraging connections, finding them at conferences, participating in their community, and grabbing their attention with a dazzling product. It won’t be easy, but you’d be derelict to not try.
To be sure, Ethereum’s still a fine choice. If you have the runway, it’s a safe bet the platform will eventually sort out its problems. Plus you benefit from a sophisticated ERC-20 token ecosystem, a large development community, and the peace of mind that, of all platforms, Ethereum is most likely to survive the long haul.
A final note: Whether you develop on Ethereum or on a challenger, make your decision early. As Khajvandi warns, “When you’ve committed yourself, it’s hard to switch mid-development.”