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Quick Insight: Chromia and CHR
Osgur Murphy O Kane
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Chromia

Chromia is a layer-1 blockchain ecosystem that combines blockchain with relational databases - with the result being relational blockchains. Chromia will be launching its mainnet later this year (2024). This report looks at this fledgling blockchain and potential catalysts this year. These include:

  • Ex-Portfolio Head of DeFiance joined as head of APAC
  • Ecosystem grant program launching
  • Mainnet launching (expected Q3)
  • A home for AI and DePIN?
  • Investor unlocks completed - total supply mostly diluted

Tech

Rell Programming Language

Chromia leverages its SQL-based programming language Rell. This is structured to enable developers to utilize relational programming concepts with which they are already familiar.

The language is similar to JavaScript and Kotlin and Chromia claim that programmers can become proficient in Rell within a week.

Relational Blockchain

This combines blockchain properties (security, immutability, transparency) with the efficiency of storing and managing data associated with a relational database. Relational databases power global businesses, again meaning that non-Web3 developers can create dApps in a familiar way. This is essential for high-scale and data-intensive applications for which blockchains are typically inherently unsuited.

Separate Execution Environments

dApps on Chromia essentially operate as customizable sidechains - allowing both horizontal and vertical scaling in the ecosystem. Because it leverages relational databases, it is well suited to managing complex data sets. Essentially, its properties make it suitable to operate as a decentralized storage layer for applications, which could make it ideal for data-intensive applications like DePIN and AI - which are arguably two of the strongest narratives of this cycle.

Scalability

Internal testing at Chromia has indicated that 10-18k TPS are possible per cluster. Projects can leverage multiple clusters to boost scalability, although the total number of viable clusters has not been determined yet. The limiting factors for scalability are the Directory Chain and System Anchoring Chain.

With mainnet not yet live, it is still unclear how scalable and performant Chromia will be. It will be worth watching closely for updates regarding this as the project approaches mainnet.

Ex-Portfolio Head of DeFiance Capital Joins

Yeou Jie Goh, who was head of portfolio at renowned fund DeFiance, joined Chromia as Head of APAC in December 2023. As a Swedish-based company, Yeou Jie brings to the table strong crypto legitimacy, awareness, and a wealth of connections (particularly in Asia) to kickstart ecosystem growth and business development. Chromia’s BD efforts in attracting strong builders and projects to the ecosystem will be critical to its success.

Ecosystem Grant Program Launching

Tying into the first catalyst, Chromia’s new presence in the high-growth APAC region and a budding bull market combined with the launch of an ecosystem grant program (expected in March 2024) could catalyze growth and interest in the ecosystem. The project is considered to have a strong treasury (comparable to other smaller L1/L2s) with enough capital to attract strong projects to build there. Furthermore, the ecosystem is immature (with mainnet not fully launched) so ambitious founders may seek to establish themselves as major players in the ecosystem (as opposed to going to an established giant like Arbitrum where it is much more difficult to become a dominant player).

Mainnet

A mainnet launch in a bull market is generally a bullish catalyst, especially building on the prior mentioned catalysts. If Chromia has successfully bootstrapped an interesting ecosystem for the launch of mainnet then this could snowball and compound further.

AI/DePIN Projects

Ultimately, DeFi and gaming are highly saturated and extremely competitive markets. It has become very difficult to disrupt these markets with new L1s and L2s seemingly appearing every day looking to take a slice of the pie. Chromia can compete in these verticals, but it is worth acknowledging it is a highly competitive and crowded space.

However, Chromia can play to its strengths as a relational blockchain that allows for efficient data storage and retrieval by attracting projects with high data requirements such as AI-adjacent and DePIN projects. Rell can easily write SQL queries and querying meaningful data is easier on Chromia than on other chains. This gives Chromia the potential to be the preferred decentralized database and data warehouse platform for projects in the space.

There are advanced discussions with a number of projects. Ultiverse, an AI-driven gaming project backed by Binance and Paradigm has been signed.

CHR Token

At the time of writing, Chromia has a current valuation of ~$340m. Approximately, 190m tokens remain to be minted for ecosystem development (approximately +24% from the current supply). The tokenomics have not been updated in years so it will be worth watching closely for updates here. At present, there are no investor token unlocks for the project. This is important, as many projects have massive supply overhangs where investors can unlock enormous profits. ‘FDV is a meme’ narrative eventually crashes down when investors seek to exit at enormous profits in a frothy market. That said, watch closely for any updates to tokenomics.

Conclusion
The L1/L2 space has become increasingly crowded and competitive. Many ecosystems have enormous funding to bootstrap their ecosystem. Despite this, Chromia is an interesting project as it takes a unique approach to blockchain design by incorporating relational databases and can position itself as an attractive environment for data-intensive projects such as AI and DePIN. With new business development capabilities in the APAC region, their ability to attract such projects can have large-reaching implications for the ecosystem’s success. Most of the token supply has already been emitted, with mo further investor unlocks. This is an attractive selling point for the token, when compared with some other L1/L2 competitors that face significant unlocks in the coming months.
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Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.