Discussion on the Scale Law and Limits of Blockchain Technology Development

In the field of large models, the lifecycle of the scale rule is accelerating. This phenomenon also applies to the blockchain field. As Ethereum's second-layer network enters the token issuance cycle and Ethereum itself returns to first-layer network competition, let us attempt to explore the scale rule of blockchain technology.

From the perspective of the full node data scale, 1,500 nodes of a well-known public chain struggle to balance decentralization and consensus efficiency, with its 400T full node data scale leading among numerous public chains and layer-two networks. In contrast, Ethereum's performance is quite excellent. Since the birth of its genesis block on July 30, 2015, Ethereum's full node data volume has only been about 13 TB, far lower than the aforementioned public chain's 400 TB. Meanwhile, Bitcoin's 643.2 GB data volume can be considered a masterpiece-level design.

Satoshi Nakamoto strictly considered the growth curve of Moore's Law in the initial design of Bitcoin, keeping the data growth of Bitcoin strictly below the hardware expansion curve. The correctness of this design idea is becoming increasingly evident, as Moore's Law has begun to approach the margins of diminishing returns. Whether in CPU, GPU, or storage, technological advancements are gradually slowing down.

The scale law suggests that the underlying hardware of public chains may not see significant improvements for a considerable period of time. In response to this challenge, Ethereum has chosen to focus on ecological optimization and restructuring, viewing the tokenization of trillions of physical assets as a battleground. Some public chains, on the other hand, choose to pursue extreme performance, but the ultra-large scale of nodes has effectively excluded individual participants.

In terms of the token economic system, we can tentatively set the limit of public chain economic systems at 300 billion dollars. This does not mean that new public chains cannot surpass this value, but it suggests that the current market performance may be the most reasonable existence. It is important to note that the actual tradable overall scale may be on this order of magnitude.

The yield capture ability of DeFi has dropped from initially high multiples to single-digit percentages, which aligns with the sub-linear scaling law. Even with trillions of physical assets on-chain, it may only reduce the average yield of DeFi without improving it.

Looking at the history of Blockchain development since Bitcoin, the trend of differentiation among public chains has not weakened. Bitcoin has gradually decoupled from the on-chain ecosystem, while the immaturity of the on-chain reputation system and identity system has led to the over-collateralization model becoming mainstream. Whether it is stablecoins or the tokenization of physical assets, they essentially represent the leveraged on-chain of off-chain assets.

Under the current on-chain scaling laws, we may have reached a limit similar to the scaling law or Moore's Law. In just 5 years since the rise of DeFi and only 10 years since the birth of Ethereum, the speed of development of Blockchain technology is astonishing, while also highlighting the challenges and limitations it faces.