Lisk Moon Dreams: Scalable sidechains? Eth killer? $164m mcap
Updated
Lisk market cap: ~164m
Circulating supply: ~144m
What is it?
Founded in 2016, Lisk is a layer 0 smart contract platform enabling DAPP creation in Javascript/Typescript.
Why?
Architecture: Ethereum uses a single blockchain platform which creates scalability issues and potential vulnerabilities like the integer overflow attack. However, Lisk’s SDK and Javascript/Typescript base allows developers to build their own customized sidechains that run on compartmentalized custom logic.
This creates security by design and is theoretically, infinitely more scalable compared to Ethereum’s EVM. This is achieved through the Lisk’s mainchain being interoperable with the sidechains, all of which have their own separate nodes (101 delegates + 2 randomly selected nodes).
Language: Ethereum uses its own programming language called Solidity whereas Lisk employs JavaScript/Typescript for smart contract development. This makes Lisk more accessible to a larger pool of developers who are already familiar with JavaScript/Typescript compared to niche Solidity.
Advantages:
Theoretical scalability and security (separate sidechain logic sidechains compared to Eth EVM) described above.
Dynamic fees.
The Lisk Academy seems to be a clear and comprehensive documentation with a focus on ease of use, compared to other projects.
17 DAPPS in active development (gaming/nft/education/gamefi/infrastructure).
Established team, with PHD researchers, project magazine, an active accelerator and bug bounty program.
Disadvantages:
Lisk’s interoperability solution (planned 7-8 years ago) was only implemented on the main net Dec 2023. Although it has passed alpha and beta implementations and is now in production mode, it is yet to be stress tested by real users en masse.
Currently the development team burns through ~500-700m in funding each month. Applying a liberal spending average of 10m a year, and assuming their base assets (BTC) doesn’t increase, they have ~6 years of funding at which point venture capital sources would probably be sought.
This could be achieved given the novel scaling solution and established team.
Cross-chain swaps between Lisk and other chains (Eth, Avax) have not been implemented yet (but is being planned). Only an interoperability solution, applying within the Lisk ecosystem, was implemented.
No trezor support.
DPOS v POS:
Lisk’s DPOS theoretically creates a higher throughput, better confirmation time, superior energy efficiency and greater protocol flexibility due to less nodes, compared to some POS chains. The downside is centralization concerns, collusion vulnerabilities and less people are able to earn fees/stakes (101 elect delegates, 2+ randomly selected) compared to Eth’s validator requirement (32 eth).
Funding:
As of Nov 2023 the Lisk Foundation has 67m in development assets which includes ~500btc.
Tokenomics:
Lisk’s inflation is ~2% compared to Ethereum’s inflation of 4%.
Lisk’s utility token will be used to transact in different DAPPs like ethereum.
Technical:
Purple lines are halvings. BTC seems to dip slightly before and after each halving. As a result, BTC will likely correct between now and ~2 months after the halving in April. This could cause a decline in USD value of Lisk by 3-30%. A December close under 0.95, could precipitate another month or two of sideways.
One will look for December close above 0.95 followed by at least 2 green weeks of January to evidence stability/bullishness before entry. A good entry could be 0.95-1.10 depending on risk tolerance.
A weekly close below 0.89 would be concerning and invalidate this play until it closed above with strength on multiple weeklies.
Benner cycle:
The meme tier “Agriculture Benner cycle” is also worth considering. This stipulates a crash in 2026. The Benner cycle is often 1 year premature which is why I have drawn a range of 2026-2027 with the two white columns.
Macro:
The 1-2 years proceeding the halving will likely drag all alts up based on previous history. This will likely occur regardless of rates rising or dropping. The global crypto market cap could reach a maximum of x7 to that of Gold’s 13.1t mcap with a ~40% BTC dominance, providing considerable gains to diverse alts like in 2017-2018. This would create a $~250k BTC as the 2026 cycle peak, per the Benner cycle, functioning as a leading indicator to the wider shitcoin market, before entering into a 3y crypto correction, trapping moontards hoping for a mystical 1mm BTC and continued shitcoin growth into 2026.
Crypto is an emerging asset class and in economic recessions, technology performs badly without the infinite M2 hack. Also, Senator Warren’s recently proposed Digital Asset Anti-Money Laundering Act 2022, targeting privacy platforms and strengthening KYC requirements for legally illusory, “unhosted wallet providers,” inducing bears to take a bite out of the crypto bull this past week.
However, this bearishness will likely correct as market regulation clarifies itself and persisting crypto narratives increasingly parrot “digital gold”, “be your own bank”, “lessen your vulnerability to bank bail-ins”, “institutional infrastructure” (ETFs and pensions) and the myriad of shitcoin narratives (“defi, NFTs, gamefi, decentralized social media/storage”), likely overpowering investor trepidation in an increasingly unstable environment (economically, socially, politically), where non-institutional and institutional investors seek fresh memes, dreams and alternative emerging asset classes outside the traditional economic purview, to cope with an increasingly negative worldview.
Also note the recent dovish FED meetings and the reflection of ~4 25bp rate cuts implied by US rate futures; perhaps a cosy foreshadowing of a 2024 BRRRRRRRRRRRRR printing session to help bulls march onwards.
Targets:
Dec 2024 500m market cap
March 2025 1.5bil market cap
Dec 2026 2bil market cap
DISCLAIMER: The above is educational/entertainment, not financial advice.
Circulating supply: ~144m
What is it?
Founded in 2016, Lisk is a layer 0 smart contract platform enabling DAPP creation in Javascript/Typescript.
Why?
Architecture: Ethereum uses a single blockchain platform which creates scalability issues and potential vulnerabilities like the integer overflow attack. However, Lisk’s SDK and Javascript/Typescript base allows developers to build their own customized sidechains that run on compartmentalized custom logic.
This creates security by design and is theoretically, infinitely more scalable compared to Ethereum’s EVM. This is achieved through the Lisk’s mainchain being interoperable with the sidechains, all of which have their own separate nodes (101 delegates + 2 randomly selected nodes).
Language: Ethereum uses its own programming language called Solidity whereas Lisk employs JavaScript/Typescript for smart contract development. This makes Lisk more accessible to a larger pool of developers who are already familiar with JavaScript/Typescript compared to niche Solidity.
Advantages:
Theoretical scalability and security (separate sidechain logic sidechains compared to Eth EVM) described above.
Dynamic fees.
The Lisk Academy seems to be a clear and comprehensive documentation with a focus on ease of use, compared to other projects.
17 DAPPS in active development (gaming/nft/education/gamefi/infrastructure).
Established team, with PHD researchers, project magazine, an active accelerator and bug bounty program.
Disadvantages:
Lisk’s interoperability solution (planned 7-8 years ago) was only implemented on the main net Dec 2023. Although it has passed alpha and beta implementations and is now in production mode, it is yet to be stress tested by real users en masse.
Currently the development team burns through ~500-700m in funding each month. Applying a liberal spending average of 10m a year, and assuming their base assets (BTC) doesn’t increase, they have ~6 years of funding at which point venture capital sources would probably be sought.
This could be achieved given the novel scaling solution and established team.
Cross-chain swaps between Lisk and other chains (Eth, Avax) have not been implemented yet (but is being planned). Only an interoperability solution, applying within the Lisk ecosystem, was implemented.
No trezor support.
DPOS v POS:
Lisk’s DPOS theoretically creates a higher throughput, better confirmation time, superior energy efficiency and greater protocol flexibility due to less nodes, compared to some POS chains. The downside is centralization concerns, collusion vulnerabilities and less people are able to earn fees/stakes (101 elect delegates, 2+ randomly selected) compared to Eth’s validator requirement (32 eth).
Funding:
As of Nov 2023 the Lisk Foundation has 67m in development assets which includes ~500btc.
Tokenomics:
Lisk’s inflation is ~2% compared to Ethereum’s inflation of 4%.
Lisk’s utility token will be used to transact in different DAPPs like ethereum.
Technical:
Purple lines are halvings. BTC seems to dip slightly before and after each halving. As a result, BTC will likely correct between now and ~2 months after the halving in April. This could cause a decline in USD value of Lisk by 3-30%. A December close under 0.95, could precipitate another month or two of sideways.
One will look for December close above 0.95 followed by at least 2 green weeks of January to evidence stability/bullishness before entry. A good entry could be 0.95-1.10 depending on risk tolerance.
A weekly close below 0.89 would be concerning and invalidate this play until it closed above with strength on multiple weeklies.
Benner cycle:
The meme tier “Agriculture Benner cycle” is also worth considering. This stipulates a crash in 2026. The Benner cycle is often 1 year premature which is why I have drawn a range of 2026-2027 with the two white columns.
Macro:
The 1-2 years proceeding the halving will likely drag all alts up based on previous history. This will likely occur regardless of rates rising or dropping. The global crypto market cap could reach a maximum of x7 to that of Gold’s 13.1t mcap with a ~40% BTC dominance, providing considerable gains to diverse alts like in 2017-2018. This would create a $~250k BTC as the 2026 cycle peak, per the Benner cycle, functioning as a leading indicator to the wider shitcoin market, before entering into a 3y crypto correction, trapping moontards hoping for a mystical 1mm BTC and continued shitcoin growth into 2026.
Crypto is an emerging asset class and in economic recessions, technology performs badly without the infinite M2 hack. Also, Senator Warren’s recently proposed Digital Asset Anti-Money Laundering Act 2022, targeting privacy platforms and strengthening KYC requirements for legally illusory, “unhosted wallet providers,” inducing bears to take a bite out of the crypto bull this past week.
However, this bearishness will likely correct as market regulation clarifies itself and persisting crypto narratives increasingly parrot “digital gold”, “be your own bank”, “lessen your vulnerability to bank bail-ins”, “institutional infrastructure” (ETFs and pensions) and the myriad of shitcoin narratives (“defi, NFTs, gamefi, decentralized social media/storage”), likely overpowering investor trepidation in an increasingly unstable environment (economically, socially, politically), where non-institutional and institutional investors seek fresh memes, dreams and alternative emerging asset classes outside the traditional economic purview, to cope with an increasingly negative worldview.
Also note the recent dovish FED meetings and the reflection of ~4 25bp rate cuts implied by US rate futures; perhaps a cosy foreshadowing of a 2024 BRRRRRRRRRRRRR printing session to help bulls march onwards.
Targets:
Dec 2024 500m market cap
March 2025 1.5bil market cap
Dec 2026 2bil market cap
DISCLAIMER: The above is educational/entertainment, not financial advice.
Note
FUNDAMENTALS UPDATEThe Lisk Foundation has now announced that they are switching the entire Lisk chain to Eth. The original Lisk chain will be given to the community team ('Moosty') while the Lisk Foundation's (now rebranded as the 'Onchain Foundation') move to Eth EVM as a Lisk Layer 2. This means there will be the OG chain (its own protocol) and Lisk as a Layer 2 on Ethereum.
Lisk movement to Eth is planned for 2024 through the Optimism's OP Stack with the Gelato team and their Roll up As a Service Platform.
Lisk will focus on "on solving local problems in Emerging Markets by bringing solutions around real-world assets (RWA), off-chain assets (OCA), and decentralized physical infrastructure networks (DePIN) onchain".
BENEFITS PER THE LISK FOUNDATION
On the Lisk blog, they tout that Lisk Layer 2 will inherit superior Ethereum security, cheaper fees, subsequent technical improvements like Danksharding, single shot finality, account abstraction and many others explained on the Eth roadmap, due this and in the insuing years, more libraries and tooling for DAPPS, broadening developer and end users, access to increased liquidity and varied tokens through the ERC-20 Ethereum ecosystem, Lisk Layer 2's ability to opereate on the Eth DeFi ecosystem & Lisk's joining of OP Stack and the Superchain ecosystem which aims to overcome fragmentation of L1 & L2 platforms, to scale Ethereum.
EFFECT?
This chainswap is a dissapointment as I was analyzing Lisk on the assumption that they would move towards developing alternative visions for cross-chain interoperability, having now completed their intra chain interoperability solution for tokens on the Lisk Layer 1. Instead, they seem to have given up on the Javascript modules vision, and jumped on the EVM bandwagon because of Ethereum's more promising and established ecosystem combined with Optimisms & Gelato's Layer 2 Ethereum solution. Lisk Layer 2 will prima facie now offer very little from Ethereum as Lisk would no longer be its own chain that challenges Ethereum's trilemma. Further, how the Lisk Foundation will tout the use of their Lisk Layer 2 token remains to be seen or discussed by the team in detail so little can be determinatively analyzed right now.
If the chainswap allows users to keep both Lisk Layer1 and Lisk Layer2 tokens, the "Moosty" team continue to contribute to Lisk Layer 1 & exchanges continue to list Lisk Layer 1, in addition to listing Lisk Layer 2, this could positively affect overall Lisk holdings, similar to how the segwit and ethereum hardforks increased total holdings through doubling holdings.
More information on the Lisk Layer 2 token migration and the timeline for it will be announced in Q1 2024.
As the Lisk Foundation are promising technical and financial support to the "Moosty" team for Lisk Layer 1 and as the Lisk Foundation (handling Lisk Layer 2) still have 10s of millions in financial funding, it is unlikely that the tokens will dump drastically, just before and after the impending BTC bull run, precipitated by the halving, potential rate cuts and/or a M2 supply increase. These external macro factors will likely positively affect the alt market over the next 2 years, therein, suggesting a bullish Lisk layer 1 & 2 for at least 2 years.
Having said that, my long term outlook for Lisk Layer 2, beyond 2+ years, is now tentative and to be determined with further updates by the Lisk Foundation on how they will specifically attempt to drive token utility & adoption. I am also now doubtful of Lisk Layer 1's long term adoption once the Lisk Foundation cease technical and financial support for the Lisk Layer 1 after 2 years. This could be especially true after 2026, which may precipitate the end of a crypto bullrun per the Benner cycle, requiring surviving alts to have a strong fundamentals such as funding, utility and demand, to stay alive.
SOURCE:
lisk.com/blog/posts/announcing-lisk-move-to-ethereum-ecosystem
Trade active
Although post halvening some alts are down or sideways with a momentarily bearish BTC, Lisk is fairing better than many.
Since Jan, Lisk has risen from ~1.15 to ~$1.95, forming a clear rising trend that seems to be tested by a liquidity wick due to paper hands.
I suspect this is because people want to have both Lisk L1 and L2 post migration.
The chainswap is happening ~21 May.
A number of partnerships have been announced.
This trade remains bullish.
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Lisk - post migration - technical analysis update The Lisk chain migration was imperfect.
There was a bug affecting the multisignature token claim.
There was also no guide for the multisignature claim. There were also issues with claiming on a hardware wallet.
Lisk's price has now crashed over 2 days from $1.77 to $1.64.
However, the multisignature bug has been promptly resolved. The Lisk founder stated that they are working on a multisignature claim guide & are waiting for Ledger to review & approve Lisk's implementation.
Thus, nothing has fundamentally failed in the migration process to EVM.
The Lisk Foundation (OnChain Foundation) remains well funded (~90m).
The vision for the future of Lisk on EVM remains amidst the crypto bull run recommencing, post halvening. Resultingly, it is expected that Lisk rebounds in the short term (<1-2 month) & mid term (<1-2 years).
Lisk's price recovery is especially possible as ETH's 20% rise over the past few days has dragged many ERC20 altcoins up in USD terms (but Lisk was left out). Once the Lisk migration pains have settled, it is expected that Lisk will recover to its pre-migration price ($1.77) + 20% from the Eth spike, creating a short term #LSK price of $2.12 in <1-2 month.
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