SmartBCH: the vicissitudes of an EVM chain

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criptocu

Bitcoin, crypto, evolving human being...

1 year ago

In community: Everything Crypto(f12e)

Topics: Cryptocurrency, Bitcoin Cash, Crypto, Blockchain, BCH, ...

Screenshot of smartbch.org

The Ethereum virtual machine (EVM) is the core architecture of that blockchain. In other words, it is the program that executes the application code or smart contracts, providing a friendly development environment.

For developers, the EVM represents the base program that runs smaller ones known as smart contracts. Similarly, it gives them the freedom to develop with a good variety of programming languages.

Thanks to this flexibility of the EVM, thousands of decentralized applications (DApps) have been created on the Ethereum blockchain focused on decentralized finance (DeFi) and NFTs. These DApps are converted into a bytecode that is fed into the EVM and distributed to the entire Ethereum network. So, when a smart contract is executed, the EVM communicates with all nodes and performs state changes once consensus is reached.

Due to the problems of high fees faced by Ethereum, groups of developers and cryptocurrency enthusiasts created new blockchains that accept smart contracts, but that eliminated this situation of the high cost of transactions. However, considering the popularity that Ethereum achieved, these new blockchains became EVM compatible. In this way, everything that was already created on Ethereum (code, DApps, smart contracts, etc.) is easily replicable on the new network.

So you could paraphrase a sentence and say: “one EVM to control them all”.

I am going to be talking about a compatible EVM platform precisely today. It is a sidechain that has faced its ups and downs, that represented enormous potential and that today refuses to disappear in the hope of reviving.

SmartBCH

Smart Bitcoin Cash (smartBCH) is a sidechain of Bitcoin Cash that allowed exploring new ideas and possibilities such as decentralized finance, web3 and NFTs for BCH. Their system is compatible with Ethereum's EVM and Web3 APIs and created a new playing field for the Bitcoin Cash ecosystem and its user base.
Among its main features are:

Short block interval to support DeFi applications.
The cost of participating in DeFi and transfers is very low.
It represents the possibility of obtaining additional rewards for Bitcoin Cash miners and holders, since they can choose to be validators of smartBCH with hash power and locked coins, respectively.
It is a good scalability solution for BCH.

The main difference with other similar platforms (Polygon, Solana, Avalance, etc.) is that smartBCH does not offer a native token. The founders did not follow the logic or incentive to create a new cryptocurrency and pre-sell or pre-mint the tokens. They decided to use Bitcoin Cash as gas for transactions and use a percentage of these fees to burn them.

This idea allowed to reach the amount of 100,000 BCH locked in the network protocol and, despite the fact that the fees are quite low, 275BCH have been burned (I am not part of the idea of burning a coin with a small max supply, but It is what it is). SmartBCH transaction fees are generally around $0.02 per transaction. Although, depending on the contract, fees can reach as high as $0.10 on rare occasions. Transactions take a few seconds to validate, as the block time for new smartBCH blocks is 6 seconds on average.

While smartBCH did not receive multi-million dollar funding from VCs like other networks with similar (or lesser) capabilities and efficiency, it managed to attract to thousands of users and maintain them as a loyal fan base. At least, until an apocalyptic event happened.

SmartBCH and the fall of CoinFlex

The main goal for moving BCH to SmartBCH and vice versa was to do so through a cross-chain mechanism called SHA-Gate. This would be decentralized, non-custodial, supervised by the miners and implemented with the Bitcoin Cash script bytecode. Other advantages of this bridge would be that it would not require any Bitcoin Cash consensus changes, nor would it depend on the operators for the security of the assets.

To better understand how SHA-Gate would work, give click here.

However, its development and security testing took a long time (scheduled for 2022, but it will not start operating in 2023), so it was decided to use a "semi-centralized" bridge operated by CoinFLEX.

According to demand, the smartBCH multisign authority would release the required amounts of BCH into circulation on the smartBCH network, while CoinFLEX would block the corresponding amount in Bitcoin Cash. At all times the balance of BCH on both blockchains was verifiable by checking the BCH balance in the Bitcoin Cash Treasury Wallet against the BCH balance in the smartBCH source wallet.

The truth is that other less centralized paths could have been chosen, although perhaps a bit more cumbersome (bridges with other chains that have WBCH). However, this system worked perfectly until June 26, 2022 (one week after the Celsius and 3AC crises) where CoinFlex announced that it was stopping all withdrawals from its platform.

the 101,382.3 BCH in the treasury address of the main Bitcoin Cash chain 18rP7bbiLiqVnFs47Hin2q1Fhb6SuMAdVo were frozen in the possession of CoinFlex. With this situation, uncertainty gripped network users, it was no longer possible to exchange SBCH for BCH and 1:1 parity was momentarily lost.

Luckily, solutions emerged from the SamartBCH Foundation, from some of the existing DeFi projects on the sidechain, and even from users. Despite the fact that the mass of active users has decreased a bit, SmartBCH from the hand of its users refuses to disappear and already has views in the future.

Current SmartBCH today June 6, 2023

In my opinion, there are three major DeFi platforms actively trading smartBCH that are worth an investor look. They continually develop and innovate, offering decentralized finance and NFT project options.

BenSwap (DeFi, NFTs, Play-to-Earn): the EBEN token is tradable on the CEX Coinex so you can use this coin as a bridge to invest or withdraw profits. It also has a bridge to the BNB Smartchain.
-TangoSwap (DeFi)
Blockng.money (DeFi, NFTs): has a bridge to the BNB Smartchain and Ethereum.

Despite the fact that the bear market affected everyone and due to the events described above, SmartBCH hit harder, these are projects that continue to generate value and investment opportunities that are quite interesting.

On the other hand, the SmartBCH development team defined the steps to follow in the near future to improve and expand the sidechain. The plans include bridges to connect different blockchains and new developments in the ecosystem.

One of the biggest upgrades will be the SmartBCH DAO and SHA-Gate bridges, which will be operated by a Foundation company in the Cayman Islands. The team will develop an AtomicSwap toolkit for BCH peer-to-peer swapping between mainchain and sidechain.

They are also working on developing enclave-based technologies for SmartBCH, which will improve sidecahin performance and privacy. In this sense, SmartBCH DAO will support projects that use these new technologies to develop new DApps.

All this should enrich and differentiate SmartBCH, providing a new opportunity now that the situation with CoinFlex and the impact of the bear market have been overcome.

Final notes

The decision to create this sidechain for Bitcoin Cash was a very good idea. Being EVM compatible allowed many development teams to get their projects started quickly and easily.

Unfortunately, being so dependent on a centralized bridge took its toll when it filed for bankruptcy. Even so, a part of the community stood firm and continued to create until the momentary impasse was overcome.

Despite having lost a good number of users, SmartBCH is still alive and knowing which projects to pursue is a pretty solid opportunity. Although the BCH blockchain enables cashtokens and DeFi platforms already, this is still a highly effective solution for scaling Bitcoin Cash for the future. future. Allowing greater capacity and speed of transactions, in addition to the EVM, it gives it greater robustness to execute more complex decentralized finance projects.

In conclusion, the SmartBCH developer team has defined its plans for future updates to improve the functionality of the platform. However, as for the SHA-Gate bridge, they have a poor track record of meeting their commissioning deadlines. With this caveat, since there are already decentralized bridges that allow exchange between the main network and SmartBCH, this EVM-compatible sidechain improves. It only remains to be seen if the innovations that will be implemented will bring back the mass of users that it lost a year ago.