Comparing Stratis and Lisk

Lisk and Stratis are decentralized application networks seeking to help companies implement blockchain solutions in their businesses. They rank 29th and 49th respectively in market cap according to CoinMarketCap. Lisk uses the LSK token and has a market cap of $317,726,131. As of Sunday, October 28th, the price of an LSK token was $2.85, down from an all-time high of $34.18 per token on February 17th, 2018. Stratis uses the STRAT token and has a market cap of $167,070,086. As of the same date, the price of a STRAT token was $1.69. The highest value the STRAT token ever reached was $21.48 per token on January 8th, 2018. Both tokens have seen a steady decline in their value since May. In this paper, I will compare Lisk and Stratis from a technical perspective, as the two platforms are designed to solve the same essential problem in slightly different ways. Lisk and Stratis are designed to solve the same core issue – the lack of flexibility developers face when building applications on established blockchains such as Bitcoin and Ethereum. Building blockchain applications on the Bitcoin or Ethereum network provides security for a new blockchain application, but this decision comes with a lot of baggage, including significant rigidity and unpredictability. Developers are limited in the applications they can develop and have no control over the future development of the network, as the Bitcoin or Ethereum community could decide to take the network in whichever way they see fit. Developers could create their own blockchains, fully customized to their exact needs, but this would come at a significant overhead cost and be prone to major security issues. Lisk and Stratis are both decentralized application networks on which developers can create fully customized blockchain applications without having to worry about the infrastructure costs and security issues associated with starting a new blockchain from scratch. Stratis is designed to enable companies to create their own private blockchains tailored to their exact needs through a blockchain-as-a-service business model. In the Stratis whitepaper, the Stratis team explains the main issue they are seeking to solve: the lack of a middle option between creating a brand new blockchain and developing an application on an existing network such as Ethereum or Bitcoin. The Stratis team saw that cloud computing is addressing a similar issue within the computing space and has found major success through allowing cloud services to be catered to each company’s needs without forcing companies to take on maintenance of the network themselves. Stratis has copied that business model by offering blockchain-as-a-service. Stratis will enable companies to create their own, fully customizable, private blockchains secured on the parent Stratis chain, allowing companies to take full advantage of blockchain solutions while not worrying about unnecessary overhead costs or security. Lisk is doing essentially the same thing without explicitly calling themselves a blockchain-as-a-service provider. Lisk offers a sidechain development kit for developers to build their own blockchain applications on sidechains off of the Lisk mainchain. Lisk’s sidechain development kit contains four main parts: Lisk Commander, Lisk Elements, Lisk Core and Lisk Hub. Using all four of them, developers can create decentralized sidechains fully customized to fit the needs of their company. After creating a sidechain, developers on Lisk can finish their blockchain applications by creating a user interface. Lisk also provides help in testing the blockchain application before deploying it. Before diving into the differences between Lisk and Stratis, it is important to recognize that because the two companies seek to solve the same issue in the same manner, they share most of their main features. For example, both provide toolkits with which developers can easily build blockchain applications tailored to their company’s needs. Both ensure security by linking the private blockchains built by companies to the main parent chain. Both allow for companies to create new tokens within their private blockchains, giving companies the opportunity to do an ICO on their platforms. Because of this, Lisk and Stratis mainly differ in only two key areas: coding language and consensus mechanism. Lisk and Stratis each saw the coding languages and consensus mechanisms present in Bitcoin and Ethereum as major problems they needed to fix in order to build a better decentralized application network. However, the two companies differ in their solution to these problems. Lisk and Stratis both recognized that a major problem with Ethereum is that it requires developers to code Ethereum-based blockchain applications in Solidity. Solidity is not a well-known coding language, and it limits developers’ abilities to customize blockchain applications. Though Ethereum’s use of solidity to code Ethereum-based blockchain applications led to a major improvement in developer capabilities when compared to Bitcoin’s original blockchain network, both Lisk and Stratis saw that the coding capabilities for blockchain applications could be improved even further.
Lisk uses JavaScript, a much more well-known coding language than Solidity. In a medium post titled “What is Lisk? And What It Isn’t.” founder Max Kordek says “We chose JavaScript because it runs literally everywhere, is extremely popular & widespread, and has huge companies like Google or Microsoft working on its speed and security across a wide range of devices.” Kordek talks about JavaScript in-depth, beginning with the misconception that JavaScript is not a secure language. Kordek counters with the argument that although JavaScript is a weakly typed language, that does not make it inherently insecure. He argues that no matter what programming language is used, it is the developers’ job to make sure that the code they write is secure. Next, he discusses concerns regarding JavaScript’s known limitation on number precision larger than 32 bits. Kordek addresses this issue by explaining that Lisk has worked around JavaScript’s limitations on number precision by conducting integer-based arithmetic through the code base using BigNumber.js. By using BigNumber.js, a library for arbitrary-precision decimal and non-decimal arithmetic, the Lisk team has made sure that this limitation was never a problem. Kordek finishes this section of his medium post by explaining that the Lisk team is planning on eventually switching from JavaScript to TypeScript, a stronger coding language, to address concerns associated with the security of JavaScript code. Stratis, on the other hand, was developed in pure C#, referred to as “one of the dominant languages in business application development” in the Stratis whitepaper. Whereas Kordek’s explanation as to why Lisk chose JavaScript as their coding language centered more on the problems with Solidity, the Stratis team instead focused on the weaknesses of C++, the language Bitcoin Core is coded in. This is because Stratis decided to develop the Stratis Bitcoin Full Node on top of the NBitcoin platform as opposed to the Bitcoin Core platform. The Stratis whitepaper then goes on to list some of the advantages of using the NBitcoin platform. The first is that the NBitcoin platform is nearly identical to Bitcoin Core, but is written in C# and .NET, which make it easier to maintain and develop than the Bitcoin Core platform written in C++. The second is that higher-level engineers familiar with C++ are in short supply because the corporate world prefers higher-level languages, such as C#. The third is that higher-level languages are easier to review and learn, which in turn makes it harder for coding mistakes to make it to the final product. For a company deciding whether to build their blockchain application on Lisk or Stratis, the crux of their decision should be their preference for JavaScript or C#/.NET. Another area in which Lisk and Stratis differ is their choice of consensus mechanism. There are two major consensus mechanisms in the blockchain world right now: Proof of Work and Proof of Stake. Both Ethereum and Bitcoin use Proof of Work consensus mechanisms. In keeping with the theme of differentiation from Ethereum and Bitcoin, neither Lisk nor Stratis uses proof of work in their blockchain.
The Proof of Work consensus mechanism used by Ethereum and Bitcoin require extensive overheads to be spent on mining equipment and electricity. Stratis and Lisk each sought to avoid hampering businesses using their platform with the need to incur these costs and therefore settled on different consensus mechanisms. In the Stratis whitepaper, the Stratis team states that they use a Proof of Stake approach to “align the interests of end-users (businesses) and those tasked with securing the network (full nodes).” Contrarily, the Lisk network doesn’t use Proof of Work or Proof of Stake, opting for a different consensus mechanism all together. Lisk’s consensus mechanism is derived from BitShares’ original consensus algorithm called Delegated Proof of Stake. In Lisk’s simplified version of BitShares’ original Delegated Proof of Stake, every LSK holder can vote for mainchain delegates to secure the network. At any given time, there can only be a maximum of 101 active mainchain delegates. These 101 active mainchain delegates have the most votes on the network. There is financial incentive to be an active mainchain delegate, as only these 101 members of the Lisk network can earn block generation rewards. Though this is a notable difference in the structure of the network, it is less likely than preference of coding language to be the most important factor in a company’s decision on which to use. Though Stratis and Lisk may seem like competitors because of their near identical value propositions, there is no fierce rivalry between the two companies. Both Stratis and Lisk are dedicated to not only the success of their platforms, but the success of blockchain use worldwide. In their whitepaper, the Stratis team discusses their plans for offering consulting services at their headquarters in London. The Stratis team states that “Stratis will leverage its own expertise by offering consultancy services to other businesses working in the sector, thereby driving forward blockchain adoption and forging key partnerships where opportunities are presented.” Moving outside of companies currently in the blockchain space, Stratis also vows to work with companies new to blockchain technology to identify potential use cases for blockchain within their company, helping organizations save money and increase efficiency. On top of this work, Stratis has set up an online tutorial to blockchain called Stratis Academy. This online academy provides a “Blockchain 101 Course” designed to educate those who know nothing about the technology. Lisk is playing its part in driving the adoption of blockchain technology through a similar online resource: Lisk Academy. The Lisk Academy’s mission is stated clearly on the homepage: “The Lisk Academy is a comprehensive and unbiased educational platform on blockchain technology. The whole Academy is free and open to everyone. The Lisk Academy is simply here to help you access the power of blockchain.” I can personally vouch for the effectiveness of the Lisk Academy, as the sections assigned to us for class readings earlier in the semester taught me, a person with next to zero knowledge of blockchain before taking this course, a great deal about the basics of the technology. I can also vouch for their claim that it is an unbiased platform, as I had learned a significant amount about blockchain through Lisk Academy before having any knowledge of what the Lisk product itself was. In conclusion, I believe that both Stratis and Lisk have the potential for success in the blockchain space. However, I also believe that their steadily decreasing token prices and low market caps are indicators of a high possibility of failure. With a new, supposedly “revolutionary”, blockchain idea gaining attention every day, it is extremely hard to make accurate assumptions as to which startups will still be in the picture ten years from now. Whether they are around a decade from now or not, Lisk and Stratis have both made meaningful contributions to the blockchain ecosystem, not only by creating platforms enabling companies to more easily integrate blockchain solutions into their businesses, but also by educating people of all knowledge levels on the technology underlying blockchain and the potential use cases for it.

Works Cited

Kordek, Max. “What Is Lisk? And What It Isn't. – Lisk Blog.” Lisk Blog, Lisk Blog, 26 July 2016, blog.lisk.io/what-is-lisk-and-what-it-isnt-e7b6b6188211.

“The Lisk Protocol.” Lisk, lisk.io/documentation/lisk-protocol.

Nyamwamu, Bebeto. “Beginner`s Guide: What Is Stratis? Blockchain-as-a-Service Platform.” 101 Blockchains, 101 Blockchains, 8 Aug. 2018, 101blockchains.com/what-is-stratis/.

Penny, Brian. “What Is Lisk? Introduction to LSK Token.” Crypto Briefing, 13 Sept. 2018, cryptobriefing.com/what-is-lisk-introduction-to-lsk/.

“Stratis Blockchain Solutions.” | STRATIS | The First Blockchain Developed for Businesses |Full POS, bitcointalk.org/index.php?topic=1512202.0.

Tre, Chris, et al. Stratis Whitepaper.

“Welcome to Stratis Academy.” Welcome to Stratis Academy - Stratis Academy Documentation, academy.stratisplatform.com/.