We are at a critical juncture in web history as the web transitions from Web 2.0 to Web 3.0. Blockchain technology will be the dominant engine behind all the applications and experiences created in this new environment. The fundamentals that drive Web 3.0 include decentralization, autonomy, security, and equality, which are essential to incorporate into every crypto project built. In the development of KeplerDAO, we have held true to these fundamentals with decisions made that adhere to them. Part of such a critical decision that must be decided on was the choice of the network that KeplerDAO will launch on, with the ultimate selection being the Ethereum network. Let’s discuss below why Ethereum (ETH) has been chosen as the springboard that will boost Kepler to the stars:
Security
One of the top priorities for KeplerDAO as a crypto protocol is to ensure transparency, safety, and security, providing the highest level of confidence for our community, investors, and stakeholders. In its current proof-of-work mining state, the ETH network depends on miners racing to solve computationally complex problems to add the following block to the blockchain. For a hacker to hack a blockchain, they would have to control most of the network’s computational power. ETH is currently the most popular GPU-mined blockchain globally (which equates to an astronomical amount of computing power), and the economic incentives that Ethereum provides to its miners encourage miners to act in the network’s best interest.
The migration of ETH to proof-of-stake (ETH 2.0) is supposed to make the blockchain even more secure as the cost to control 51% of the total ETH token would be prohibitively expensive. Having a solid and secure blockchain to build on is paramount to any decentralized applications (dApps), with developers having to only focus on securing their smart contracts. For KeplerDAO, the combination of a high security blockchain in ETH, developers who have been KYCed by independent parties, and fully audited smart contracts are strong reasons investors should invest in the protocol.
Liquidity
As a DeFi 2.0 era community VC-investment DAO protocol, it is crucial to accrue and build up a strong treasury that would enable KeplerDAO to invest in the most innovative and high potential project in the crypto space. Up to date, more than 2 trillion USD worth of capital has been invested into crypto-related projects, with ETH being the second-largest blockchain in terms of market capitalization worth around USD 450 Billion at the time of writing. Building on ETH would expose Kepler to this massive amount of liquidity and the large number of investors already in the ETH ecosystem. This exposure would enable investors to learn about Kepler and invest in it. Traditionally, higher liquidity equals higher investors’ confidence, meaning that investors in the ETH ecosystem carry higher confidence on projects built on ETH and would have a higher chance of investing. The availability of capital and a high number of investors with good confidence would allow Kepler to grow steadily and become a successful protocol.
Healthy DeFi ecosystem
Ethereum’s robust ecosystem, longevity, and top-class security have been vital in attracting many developers to build applications on its blockchain. It has cemented its position as the top DeFi blockchain with the most dApps available to investors. This situation is great for a new protocol like KeplerDAO as the existing userbase already familiar and has a good understanding of DeFi is significant and would find investing in a new and innovative project like Kepler less daunting and more attractive. The vast amount of liquidity already invested in dApps represents a good chance for Kepler to capture a piece of the pie.
Considered a leader in smart contract blockchain implementation, the ETH network is the leading incubator of crypto projects due to the high level of developer activities. This large basket of early-phase high potential projects is key to KeplerDAO as a community-driven VC investment vehicle. Kepler would be able to have exposure to many budding projects that the treasury fund can be invested in to reap profits from future exponential growth when the invested projects take off.
The Ethereum Virtual Machine (EVM)
An easy and accommodating developer experience is essential to attract novice and experienced developers to develop applications on a blockchain network. ETH has a unique software system called the Ethereum Virtual Machine (EVM), allowing developers to launch any crypto applications regardless of the underlying coding language. Developers can also get their applications live faster than on other alternatives network through the EVM’s fast-track onboarding process. The ETH development kit, which combines application templates, MetaMask integration, and the EVM, allows the KeplerDAO team to focus on refining our smart contracts and developing on top of a versatile and open-source platform. Such versatility and ease of use are a big plus point in attracting new projects and large communities.
ETH 2.0 and layer two solutions
As the popularity of dApps and smart contracts sky-rocketed on the ETH network, it has been plagued by scalability issues, high gas fees, and congestion in the network. ETH Layer 2 networks like Polygon or ZKrollup, which are distinct from the ETH blockchain, strive to take some of the computational strain off the main ETH blockchain to increase its overall scalability and, in many cases, eliminate the issue of high gas fees. As mentioned earlier, the ETH network is migrating to version 2.0 sometime in 2022. This significant upgrade to ETH consists of sequential phases that will culminate into the transfer from proof-of-work consensus to proof-of-stake, making the network more scalable, secure, and sustainable. ETH 2.0 will reduce the network’s carbon footprint and allow more projects and protocols to be built on it. This positive reinforcement would strengthen ETH’s position as a market-leading cryptocurrency and thus attract even more investors into the ecosystem, which would eventually benefit KeplerDAO.
The concerns of gas fee
Many investors are frightened by gas fees on the ETH network, which can cost upwards of hundreds of USD worth of ETH tokens during peak times. Being built on the ETH network means that KeplerDAO cannot avoid this issue of gas fees, but the team has decided that the benefits greatly outweigh such concerns. Kepler is not a trading or gaming platform requiring frequent transactions; being an investment DeFi protocol requires optimizing network strength and stability, not speed or cost. The team at Kepler has also worked to mitigate gas fee concerns by efficient coding of the smart contracts. Thus, the gas fee effect on our investors is relatively small and would be insignificant with the potential returns from the protocol’s success. The migration to ETH 2.0 is also expected to help reduce the gas fee per transaction on the ETH network. To help our community and potential investors, here are some tips on how to save on ETH gas fee:
- Choose the right timing to transact: Congestion of the ETH networks is the main cause of the high gas fee. However, transactions do vary at different times of the day, thus, waiting for the right time to transact can significantly reduce the amount of gas fee required. Typically these quiet hours will be 6–11 am UTC, 8–11 pm UTC, and during weekends.
- Actively monitor gas price: If you have a time-sensitive transaction, keep an eye on the real-time gas price (Kepler’s Discord has a gas tracker bot that makes this information easily available and accessible) to catch moments of a lower gas fee to execute your transaction.
- Setting your own gas limit: The gas limit is the maximum number of gwei you are willing to pay for a transaction on the ETH network. This limit is usually set automatically but can be adjusted by a user to take advantage of moments when the gas fee of the network drops during moments of low network activities
- Organize transactions: Gas fee varies depending on the type of transaction on the ETH network. The gas fee is also charged per transaction, therefore, organizing and executing similar transactions together would significantly reduce the amount of gas fee paid. This is especially important for a protocol like KeplerDAO as you can pool your tokens together before performing a stake, for example.
- Utilize gas tokens: Gas token allows users to tokenize gas on the ETH network, storing gas when the gas fees are low and using it when you need to execute your transaction during high gas fees.
- ETH Layer 2: Layer 2 employs technologies like Rollups or moving transactions to the sidechains which process reduces gas fees and expedites transactions. Many Layer 2 blockchains have been created including Optimism, Arbitrum, Polygon. KeplerDAO will expand to such Layer 2 blockchain in the future which would eliminate the issue of the high gas fee.
The resulting network effect from the points mentioned can accelerate the monetization of products as real people interact with dApps in a meaningful way. Riding on the strength of the ETH network, this dynamic situation ensures KeplerDAO can develop and implement a viable business model critical to long-term success.
HODL and prosper!
KEEPer for life.
