Original Author: Rapolas
“Recommended message: This article showcases the future potential of Gravity Chain, soon to be launched by Galxe, from the metaphorical perspective of a chain city, analyzing the concept of the rise of “chain abstraction” and existing issues. Galxe has a unique position in the ecosystem, distributing resources by bringing together upstream and downstream, with a growth trajectory that exhibits clear similarities to the original Cex. However, in the future competitive landscape of parallel EVM chains versus non-EVM parallel chains, where will Gravity lead users to, sparking curiosity and ongoing scrutiny! Will you copy this assignment?”
How much chain abstraction do we really need? There is an oversupply of investment in crypto infrastructure. The feedback cycle for infrastructure is too long, allowing the lack of Product Market Fit (PMF) to be masked for an extended period within this field, longer than consumer crypto applications. The absence of established infrastructure at the protocol level enables venture capital to capture excess value among numerous infrastructure and middleware projects. Layer 1 (L1) creates substantial value by exploiting an infinite Total Addressable Market (TAM). Subsequently, infrastructure projects aim to approximate the valuation of L1 as closely as possible because they have their own network consensus, block production, etc.
This is one of the reasons why the crypto infrastructure space is so saturated with meme culture. Everyone knows the effective strategy and the results you’ll get if you follow it: claim to be expanding the blockchain; raise excessive funds from venture capital; announce “partnerships” with other infrastructure projects before launching your chain; release a testnet (which may crash) and then hype up some crazy metrics; launch tokens within the $1 billion to $100 billion market cap range.
The Rise of Chain Abstraction
Recently, we’ve seen attempts to blur Step 1 further. Instead of claiming to expand the blockchain, people are now turning to chain abstraction. It sounds like the Holy Grail of infrastructure, the cherry on top, the endgame.
Every infrastructure founder naturally has the desire to build a chain. Some are just afraid to admit it.
The problem is: if there are no users, who are we abstracting for? Chain abstraction is a venture capital solution to the problem of chain fragmentation, which was initially caused by ruthless investment from venture capitalists. Without products, chain abstraction is not a real solution to the real problem. It doesn’t bring significant change or solve new problems for consumers like Ford or iPhone did (both were qualitative leaps in consumer experience compared to what came before).
Considering that every infrastructure project is created as a response to the previous solution:
L1 can’t scale, so we created Rollup;
Rollup split liquidity, so we built cross-chain bridges;
There were too many cross-chain bridges, so we aggregated them;
There were too many aggregators, so we built Intent;
Intent was hard to explain, so we built an Intent Interpretation Layer;
… Do you think it will stop here?
User Experience and the Challenges of Chain Abstraction
Chain abstraction may bring about a certain centralization compromise, as the decentralization level of the stack can only be as strong as its weakest link. Abstraction requires coordination around state proofs, solver execution, block confirmations, and cross-chain transaction guarantees, hence consensus must be reached on this. The capital market always has another chain abstraction solution with faster/cheaper/more trendy vocabulary than the currently adopted one. Founders and venture capitalists will create new rules, but the gameplay is the same as always, aiming for the same rewards.
Building infrastructure is often a response to poor user experience, as high fees and slow settlements are part of the user experience problem. But when adoption fails to meet expectations, blaming poor crypto user experience becomes an easy scapegoat. Criticizing user experience requires almost no effort, so everyone does it. Whenever the crypto cycle turns cold, people blame it on poor products, forgetting that these products were once so exciting that they brought us to the market’s peak.
In the past, we discussed crypto super apps, which started with products rather than infrastructure. Whether it’s Uniswap, Metamask, Magic Eden, StepN, Blur/Blast, dYdX, or Hypeliquid, it’s clear that the idea of web3 is being disrupted. Instead of collaborating on composable stacks, everyone is building their own tech stacks based on their own incentive mechanisms. That’s okay.
But it also means that chains will be abstracted by those who don’t call themselves chain abstractors; instead, they will be the ones building the most popular applications in crypto.
The Most Popular Application in the Field – Galxe
Galxe (formerly known as Project Galaxy) is the most widely adopted web3 application, leading by far. Its network traffic surpasses Uniswap, Opensea, or Etherscan. Over 20 million unique addresses interact with Galxe. Over 1 million unique visitors use the Galxe website daily.
Before you dismiss this allure as a robot airdrop feast, consider that most on-chain use cases are dominated by bots. Most token trades are completed by bots. Crypto games are played by bots as they are still primarily driven by financial incentives. NFT market making is also done by bots. AI agents (smarter bots) are starting to participate in on-chain economies. Even our darling of social finance heavily relies on bots, making social finance less social. Crypto is about incentives and resource coordination, and so far, bots have proven to be excellent target users for harvesting on-chain incentives. In the future, agent DAOs and UBI are closer than we imagine.
But whether users are bots or not is not important (it’s worth mentioning that Galxe’s 1 million daily active users are actual website visitors, not bots); what matters is the volume of economic activity and the value that protocols or applications may capture.
Galxe found its entry point in airdrop distribution. Since then, it has come a long way, building an identity layer that includes Galxe Passport (identity) and Galxe Score (reputation).
The most successful businesses are those that create new bundles or unbundling for everyone. Galxe has aggregated the project supply side, aiming to build communities and distribute their tokens, where the demand side is users seeking opportunities to earn tokens. Previously, the core business of centralized exchanges, enabling projects to build communities before token generation events (TGEs), has now evolved into a larger market.
We have seen countless early attempts to build platforms for identity or data monetization, but they have always failed because they did not start with products that people wanted to use (most users don’t care who owns their data). Galxe has built a unique use case and provided powerful financial incentives for people to reveal their identities. Such data will become valuable in ways we have not yet foreseen, especially if policymakers sincerely attempt to consumerize cryptocurrencies.
Almost 1 million people have created Galxe Passports with their real-life identities.
Aggregating users can not only build a valuable identity layer but can also create consumer-type products that wouldn’t succeed as standalone ideas. This includes the Galxe mobile app, fund transfers and spending, AI-assisted trading products, research centers, and more. Galxe has become the first stop for many new users in the crypto space.
The question now is: how many valuable products can Galxe build so that these users never have to leave its ecosystem?
Galxe spans 34 different chains. This may be more than any cross-chain bridge or centralized exchange can integrate. With Galxe’s intelligent balance feature, users can deposit funds into a single treasury, using the balance to pay Galxe smart contracts for transaction fees across multiple chains without the need for bridging. Soon, smart balances will be upgraded to smart savings, allowing users to earn returns on deposited assets.
Many may not know that while people look elsewhere, Galxe has been abstracting chains and accounts. With the recent announcement of Galxe’s Gravity Chain launch, it will become the largest blockchain by transaction volume, with monthly transactions totaling around $100 million.
Aggregating user identities, their transactions, and controlling block space is a combination strategy for abstracting chains. For us, it seems that only a few crypto companies — Galxe, Coinbase, perhaps TON — have the full capability to make consumer-friendly chain abstraction a reality. Although they approach it from different angles, the expected outcome, blockchain entry coupled with identity, seems the same to us.
Coinbase’s Galxe’s ultimate game has been revealed
We don’t know who needs to hear this, but rebranding in crypto is always optimistic. There’s no better stock code than $G.”
