Moonbeam is a bridging platform focused on interoperability between Ethereum and Polkadot. Moonbeam aims to provide developers a lower barrier to entry for developing Ethereum compatible decentralized applications on a more cost-effective platform like Polkadot. This blockchain compatibility allows developers to use their existing Ethereum smart contracts and dApp frontends to easily move over to Moonbeam with minimal changes, enabling cross-chain liquidity between Ethereum and Polkadot.
Also detailed in this AMA recap is Moonriver, Moonbeam’s companion network. Moonriver is a Kusama based incentivized canary network, where new code can be shipped, tested, and verified under real economic conditions. Once proven, the same code can be shipped from Moonriver on Kusama to Moonbeam on Polkadot.
- Moonriver recently won a Kusama parachain auction slot
- Moonriver and Moonbeam will have 5-step network launch processes
- Moonbeam gives multi-chain teams coming from DeFi and NFT sectors new users and new assets to serve
- Building on Moonbeam gives Polkadot developers access to an Ethereum development toolchain where they can get started with minimal costs
- 2.5% of inflation goes to stakers as rewards
- There is no unbonding/bonding period for Staking
- Moonbeam opens up a more native and seamless way for DeFi protocols to interact
Kusama & Polkadot Crowdloan Auctions
Moonriver recently won the second Kusama Parachain slot through a crowdloan. A crowdloan is a process where projects can fundraise for a parachain slot on the Kusama (or Polkadot) network. As this process is very new, the team explains that they are busy digesting all the new data from the Moonriver / Kusama crowdloan, to carry learnings to the Moonbeam / Polkadot crowdloan.
Moonriver has a 48 week lease on the Parachain slot, keeping in mind that ultimately they will have to keep participating in future auctions indefinitely to maintain a Parachain slot on Kusama or Polkadot. While Moonbeam Founder & CEO explains that crowdloans are great for building community, the long term Parachain sustainability is where they are focused on modeling right now.
“The goal has to be to accumulate enough of the relay chain asset so the chain can be self-sovereign and pay its own lease at some point.”– Derek Yoo
Moonriver as the Guinea Pig
Moonriver is now in the network launch sequence. The Moonriver launch is a five step sequence with more functionality added at each phase. The idea of the multi-step launch adds a system testing and assessing security throughout the entire process. While the full five step process is expected to take around ~6 weeks, Yoo explains below that when it is time, Moonbeam will follow Moonriver.
“Once we have been fully operational on Moonriver for a couple months, and once Parity initiates the same parachain launch process on Polkadot, we will repeat the same launch process steps for Moonbeam on Polkadot.”– Derek Yoo
Staking Moonriver “MOVR” tokens
Third party collators are coming to Moonriver in Phase 1 of the launch sequence. Eventually, user staking functionality will be available once Moonriver achieves Phase 4 of the launch sequence and balance transfers are enabled. Staking MOVR tokens will allow users to receive rewards from collators and participate in governance. The staking function on Moonriver will also allow users to select which collators will occupy the active slots, as Yoo explains below:
“We have an integral staking function where users will be able to delegate to collators, selecting which collators will occupy the active collator slots, and then receive yield in return.”– Derek Yoo
Who Will Use Moonbeam?
Moonbeam will provide interoperability between Ethereum and Polkadot. While many developers may use Moonbeam for different purposes, for the most part, users can be divided into two categories: multi-chain teams, and Polkadot-native teams.
For multi-chain teams coming from DeFi and NFT sectors, they need to expand to find new users and new assets to serve. For teams coming from Ethereum, Moonbeam becomes a natural partner to expand to Polkadot as Moonbeam is an EVM compatible chain, allowing teams to expand to Polkadot while leveraging their existing Ethereum code easily. Typically when multi-chain teams deploy their project, (like on BSC or Polygon) they will have a separate deployment instance on the remote chain, and then use bridges to move assets / liquidity over.
For developers that are Polkadot-native, it allows them an easier way to get started developing. Their project may become a parachain in the future, but building on Moonbeam gives them access to an Ethereum development toolchain where they can get started with minimal costs, opposed to paying for a parachain slot upfront.
Benefits of Building on Moonbeam
Moonbeam is designed to simplify the user experience for Ethereum developers as they expand to Polkadot. Moonbeam has several components to help developers:
- Minimal Codebase Changes: If you have an existing contract, it will work right away with no need to rewrite or reconfigure
- Language Support: Write smart contracts in Solidity or anything that compiles to EVM bytecode
- Core Developer Integrations: Integrations with the most-requested developer tools and services like APIs (The Graph, Biconomy, Covalent, OnFinality), assets (Ocean Protocol), bridges (ChainSafe, Interlay, and an NFT bridge in the works), DeFi protocols (SushiSwap, IDEX), oracles (Chainlink, Band Protocol) and many more.
- Unified Accounts, Addresses, and Signatures: Existing Ethereum H160 accounts & ECDSA signatures to interact with Moonbeam
“The beauty of Moonbeam is that these EVM-based projects will be able to leverage the interoperability that Polkadot offers without having to adapt to a substrate-based system.”– Francisco Javier Agosti
The GLMR Token, Wallet support, and Fees
Similar to the MOVR token for Moonriver, the GLMR token for Moonbeam is used for staking, and governance. One of the benefits of Moonbeam being a parachain on Polkadot means that dApps on Moonbeam will only have to pay fees on Moonbeam, not Polkadot. In terms of wallet support, users on Moonbeam will be able to interact with Moonbeam based dApps and substrate based ERC20s using MetaMask.
“We are trying to marry the best of Ethereum (all of the tools and technologies that are ethereum compatible) with the power of polkadot (the ability to natively interact with other specialized parachains).”– Derek Yoo
Collators on Parachains
Architecturally, collators on Polkadot are different from other networks, as Polkadot collators on a parachain are responsible for block production, but not finalization, and finality comes from validators on the relay chain. Due to this structure, it isn’t possible for a collator to propose a block with invalid contents.
The Moonbeam team uses a permissionless staking system similar to the Cosmos model, using delegations to select a number of collators to occupy a fixed number of active slots. The team is working on sharing this system so that other teams can use it as well, as it is up to the parachain teams to figure out how to incentivize collators. 20% of transaction fees on the network go to the onchain treasury, while 80% of the fees are burned.
The total yearly inflation on Moonbeam is 5%. 2.5% of inflation goes to stakers, 1% goes to collators in the active set, and the rest goes to the parachain bond reserve. The parachain bond reserve is used for future parachain auctions, and is a way to try to become self-sustaining from a parachain lease perspective. There are no unbonding/bonding periods when delegating Moonbeam.
“We will be accruing inflation in this onchain pot to help pay for future parachain auctions. The idea is that ultimately there should be enough funds here to have the chain be self-sustaining in this regard”– Derek Yoo
New DeFi Opportunities
Most DeFi protocols are looking to access new users and assets. These DeFi protocols benefit from having a Polkadot-based deployment through Moonriver and Moonbeam, opening up a more native and seamless way for DeFi protocols to interact. Moonbeam and Moonriver will help reduce project fragmentation and create seamless liquidity initiatives and composability across DeFi protocols.
“Moonbeam will bring a broad range of existing DeFi protocols from other EVM compatible chains to Polkadot that will help bring liquidity and grow the number of assets and users on Polkadot, helping accelerate its growth overall”– Derek Yoo
Projects, Key features, and Roadmap details
The officially announced partnerships from Moonbeam include SushiSwap, IDEX, Balancer, Dodo, Frax, 0exchange, Ocean Protocol, Unifty, Seascape and more. Many of these partnerships are focused on enabling cross-chain liquidity. The Moonbeam team mentions there are many other partnerships in the pipeline. You can find the full list of the Moonbeam ecosystem here.
The goal for launch primarily is the full working Ethereum layer, along with Staking and governance features. The Moonbeam team is most bullish on the emergence of a full DeFi ecosystem in the Moonriver / Moonbeam EVM. Moonbeam and Moonriver already have a large number of ecosystem partners covering many different DeFi areas such as DEXs, stableswaps, stablecoins, lending / borrowing, etc. The Moonbeam foundation is working now on how to plan out liquidity bootstrapping initiatives for this DeFi ecosystem. Getting this ecosystem bootstrapped and with a decent amount of users and liquidity will be a big win for Moonbeam and Moonriver.
“Building out a high quality and well rounded ecosystem has been a high priority for our team since that makes Moonbeam more difficult to replicate.”– Francisco Javier Agosti