Moonsong Labs and the Evolution of Web3

Why Moonsong Labs?

We created Moonsong Labs with the mission to create software infrastructure protocols that drive the adoption of Web3. We are motivated by the idea that Web3 enables more transparent, more efficient, and fairer ways for humans to interact with each other. And while this is no doubt a worthy goal to work towards, a key question is how Moonsong Labs can best achieve this goal.

This year, Moonsong Labs launched with 2 lines of business: engineering services and a venture studio. This blog will explain some of our core beliefs in Web3 and how those beliefs help guide decisions about what we work on from an engineering services and venture studio perspective.  We’ll also explore how those things fit into a broader vision of where Web3 is headed. These principles drive our decisions and strategies in the ever evolving world of Web3. 

Web3 Principles

A lot of my thinking about the ways Web3 will evolve comes from drawing parallels with the historical evolution and development of computing, networking, and other IT domains.  

A blockchain is, afterall, a kind of ‘community computer’, making it logical to look back at the history and development of computers to draw directional inspiration from. This method of using historical analogies is something I’ve mentioned in several talks such as this one from the Chainlink Smartcon conference in Oct 2023.

Reflections like these, not only offer insights into possible future trends but also help in understanding the underlying dynamics that could shape Web3’s growth and impact.

Principle 1: Many Blockchains

The first principle guiding our approach at Moonsong Labs is the conviction that Blockchains and Web3 will scale through parallelization and therefore leading to the proliferation of many blockchains. This concept mirrors the historical scaling of conventional computers and the internet, through parallelizing work and user access across many different computers.  Similarly in Web3, I see scaling occuring in exactly the same way, through the use of many underlying blockchains, each contributing to a more scalable user experiences.

My belief is that the cost and effort required to launch a blockchain will continue to decrease over time, until the costs are very close to the cost of the infrastructure required to run them.  We are already witnessing this trend with ‘rollup as a service’ providers and innovative projects like Tanssi.  

In this emerging landscape, the possibility of having a blockchain could extend to not only every organization, but perhaps even to individuals as well. The proliferation of accessible blockchain technology will create scenarios where users will likely use 1000’s of them during the normal course of a day, even if they aren’t aware that they are using them. A seamless integration will mirror the way we effortlessly and unknowingly interact with an array of computers and servers as part of our daily lives.

As chains proliferate, a natural progression towards specialization will be essential to attract developers and end users. This specialization can take the form of functionality in various forms, such as decentralized storage, effectively catering to niche market demands. Other chains might tailor their services to particular user groups serving a specific geography or region. This is analogous to different kinds of computers (laptops, servers, mobile devices, etc) that have evolved to serve different use cases. Each type of blockchain, like each type of computer, will find its niche, excelling in specific areas to meet particular demands.

For Moonsong Labs, this means that we want to be at the forefront of where blockchains are being created.  That is what initially led us down the path of learning Substrate, the Rust based framework used for the development of the Moonbeam protocol. Working with Substrate provided us with deep insights into the intricacies of blockchain development and laid a solid foundation for our work. Furthering this trajectory, we engaged with Polkadot, an ecosystem supporting multiple interoperable chains.  Polkadot’s architecture, which fosters a network of diverse yet interconnected blockchains, aligns with our vision of a specialized, yet cohesive future. As we plan ahead, we anticipate  blockchain creation to happen in multiple ecosystems using multiple distinct tech stacks.  To set ourselves up for success in the future we believe in, Moonsong Labs is committed to not only leveraging our knowledge of Substrate, but actively learning and adapting to new tech stacks as necessary. Our goal is to be versatile and proficient in a range of blockchain technologies, enabling us to contribute significantly to various blockchain projects and their unique needs.

Principle 2: Key Tech Stacks

The projects we specialize in at Moonsong Labs are Web3 infrastructure protocols. The users of these systems are typically developers and not end users.  Understanding that developers represent our main user base, our approach is deeply rooted in listening to them and catering to their needs.

Even back in 2019 when we started working on Moonbeam, it was clear that the Ethereum Virtual Machine (EVM) was the preferred tech stack for Web3 smart contract developers.  I expect that EVM will continue to be the dominant developer facing tech stack for Web3 smart contract development for the foreseeable future.  Despite its age, inherent inefficiencies, and the complexities involved in developing secure software with EVM, it benefits from unparalleled network effects that no other tech stack has. It has the best tools, infrastructure and integrations around it. The dominance of EVM is actually increasing vs decreasing given the widespread use of EVM on most Layer 2s.  It will be extremely difficult to achieve critical mass of developer adoption for alternate smart contract technologies.  Possible contenders in my opinion are the Solana VM and Starkware’s Cairo, which show promise due to their unique offerings and growing traction in the developer community

While EVM is dominant for smart contracts, it will necessarily be complemented by tech stacks that allow you to build entire blockchains.  Building blockchains allows for full control and customization that you cannot achieve with smart contracts in a shared environment. This is where the utility of blockchain-building frameworks becomes crucial. Examples of blockchain building frameworks include Substrate (Polkadot SDK), Cosmos SDK, zkStack, OP Stack, and many other emerging chain SDKs from prominent ecosystems.

These frameworks empower developers with the tools and flexibility to create bespoke blockchain solutions, tailored to specific needs and use cases. Unlike the EVM, which primarily focuses on smart contracts within a predefined shared environment, these blockchain-building technologies offer a broader scope for innovation, allowing for the creation of entirely distinct and customizable blockchain architectures.

Moonsong Labs has deep expertise in EVM and Substrate development. However, in recognition of the rapidly evolving landscape of blockchain technology, we will look to complement that knowledge with other technologies using a learn by doing approach- particularly with emerging L2 chain SDKs such as zkSync’s zkStack. This approach provides us the ability to adapt to customer demands and requirements, being able to build and deploy chains under different security domains and with different functional requirements.

Our goal is to remain at the forefront of blockchain innovation, not just as specialists in EVM and Substrate but as a versatile, adaptive force capable of navigating and leveraging the full spectrum of blockchain technologies. This adaptability is key in an industry characterized by rapid change and innovation, allowing us to deliver solutions that are both cutting-edge and highly tailored to the specific needs of our clients

Principle 3: Zero Knowledge Proofs

Zero Knowledge Proofs (ZKPs) are a revolutionary technology when it comes to scaling and preserving privacy for Web3 and other applications.  At Moonsong Labs, we believe that alongside parallelization, ZK is the scaling technology that will lead the way.  We expect it to be pervasively incorporated into Web3 infrastructure and applications. It is therefore a strategic priority for Moonsong Labs to build a strong competency and knowledge base around ZK technologies.

One of our beliefs in ZKPs stems from their significant advantages to competing optimistic approaches in terms of security guarantees and the user experiences they enable developers to offer.  The downside of ZKPs is the heavy computational infrastructure required to generate proofs.  However, the trajectory of technological advancement has consistently shown that compute requirements become less burdensome over time, thanks to advancements in both software and hardware.  Compute requirements have already dramatically reduced in the last several years of ZK technology being actively developed in the Web3 space.

In line with this focus, Moonsong Labs is building a world class ZK engineering team, currently working on leading ZK protocols such as zkSync and Starkware. This ZK knowledge and experience we gain will be used for our own venture studio projects, which includes bringing back ZK knowledge and implementations to the Substrate ecosystem, fostering more scalable and privacy preserving infrastructure.

Principle 4: Interoperability

In a world with many blockchains, interoperability is the critical capability.  Without it, each blockchain is an island onto itself, disconnected from all of the users and assets residing on other chains.  The necessity for connectivity for chains will be a requisite for maintaining relevance and ultimately survival.  Developers also need interoperability to reach users where they are, and to hide infrastructural complexity away from those end users.

We have had a front row seat to the development of an interoperable multichain ecosystem on Polkadot.  We have been early adopters and active participants of Polkadot’s Cross-Consensus Messaging (XCM) technology for sending messages securely between chains and powering cross chain use cases. As part of Moonbeam, we have also spent significant time learning general message passing protocols such as Axelar, Wormhole, and LayerZero which connect Moonbeam to many other chains in the broader Web3 ecosystem.

At this point, my outlook for the next several years is a scenario where multiple multichain ecosystems coexist. Established ecosystems like Cosmos and Polkadot which already have critical mass, will continue to evolve. Joining these are all of the L2 ecosystems on Ethereum mainnet, such as Arbitrum, Optimism, ZKSync, Polygon, and Starkware, each with their own chain building SDKs and plans for chains built using those SDKs being interoperable with each other.

A key point is that interoperability is strongest when using the same tech stack to build your chain, but becomes much weaker when crossing different interoperability and security domains. This dynamic will lead to the formation of  multiple islands of interoperability, almost like a set of local area networks (LANs).  But then you still need a wide area network (WAN) to connect between these many local networks.

To navigate and contribute to this evolving scenario, Moonsong Labs is proactively preparing by learning the integral interoperability technologies in multiple blockchain tech stacks.  We are also focused on enhancing the existing general message passing protocols (GMPs) that allow for secure connectivity between interoperability domains.  One of our first venture studio projects, Glacis, is designed to create redundant and secure “WAN” connections between interoperable domains using multiple GMP providers.

Principle 5: Decentralization

Web3 infrastructure protocols need to meet certain minimum decentralization requirements in order to be considered truly viable.  Designing and implementing Web3 protocols inherently involves navigating trade-offs, but keeping decentralization as a core principle is critical.  If a protocol falls short of achieving sufficient decentralization, it becomes unclear why you have a blockchain in the first place vs just a centralized service that could be run vastly cheaper and more efficiently in e.g. a standard cloud provider.  

In particular, many newer L2 protocols have not yet decentralized core infrastructure components related to their protocols.  This centralization represents a risk to users of those systems that needs to be addressed.  Often, the reality behind many projects that claim decentralization is a reliance on multi-sigs. 

Our experience with Moonbeam has significantly deepened our understanding of decentralization along multiple dimensions including organizational structures, consensus implementations, and on-chain governance functionality.  There are currently 76 permissionless and decentralized block producers on Moonbeam, similar to a sequencer on an L2.  At Moonsong Labs, we intend to take these decentralization lessons and technologies and apply them to other projects.  In particular, our approach involves leveraging Substrate to create decentralized infrastructure for other protocols that require it. By doing so, we can help make sure new Web3 protocols have clear paths to decentralization.

Moonsong Labs Vision

Given these beliefs, what is the goal we are building towards at Moonsong?

We envision a next generation of Web3 blockchain infrastructure protocols, each meticulously optimized for specific functionalities and use cases. We envision a comprehensive suite of infrastructure protocols, each of which is valuable in its own right, but that are each designed to seamlessly work with each other. They will be built around common standards (e.g. EVM, H160 accounts, Substrate, zkStack) and with interoperability in mind (e.g. XCM, zkSync Hyperbridges). Central to their architecture will be the principles covered in this article, including on-chain governance mechanisms.

Using this protocol suite, developers will have the tools to be able to make more scalable and user-friendly decentralized applications (dApps). They will be able to pick and combine multiple Web3 infrastructure services that they want to compose together to build their app, similar to how AWS offers a range of infrastructure services for Web2 development. But in our case they will all be decentralized services.

Moonbeam, with its decentralized cross chain optimized EVM, represents an integral piece of this larger protocol suite. We are actively developing additional protocols including a cross chain redundancy and security protocol, a storage protocol, and a ZK-based authentication service. Each of these protocols is designed to interoperate within the protocol suite.  

Building out this suite of interoperable and decentralized protocols is the primary focus of the Moonsong Labs venture studio. We don’t want to merely contribute to the Web3 space but to play an active role in shaping its future. 

Conclusion

Moonbeam was a starting point for us to learn how to build Web3 infrastructure services. While we continue to develop and enhance the Moonbeam software protocol, we also are starting development of complementary protocols that are designed to work with Moonbeam and other chains. We are learning important technology such as ZKP, by working on leading ZKP protocols, which will equip us with the necessary expertise to build out an entire protocol suite.

The Web3 infrastructure landscape over the next several years is likely to consist of multiple islands of tightly connected chains, which are loosely connected with each other. To navigate and contribute effectively in this environment, we need to learn different blockchain and interoperability tech stacks. These skills are vital not just for our current projects, but also for integrating these learnings back to our infrastructure protocol projects.  

As we expand the protocols within our suite, so will the intrinsic value of their individual services.  Our belief is that we can uplevel the Web3 development experience through this approach, enabling the creation of more scalable and usable dApps to help grow the Web3 user base. It’s an amazing and exciting time to be building in Web3. To be here in the early chapters of the Web3 story and to contribute to something that is going to change and improve the way people interact with each other is both exhilarating and rewarding.  I look forward to Moonsong Labs helping to drive Web3 adoption by providing better, more scalable, natively interoperable Web3 infra protocols for builders.