The Philippine Govt Chose $VENOM??

CRYPTODAY 137

1. On Friday August 2, Bitpinas published a press release with the title “The Philippines Chooses Venom for Groundbreaking National Blockchain Initiative.” (link) The specific government agency involved is the National Printing Office, and it appears that they’ll be preserving the country’s “accountable forms” on the Venom blockchain. The first wave of community comments were exactly what you’d expect: what’s Venom? What is the National Printing Office? How did they end up picking Venom? Well, I did the research, so you don’t have to.

2. First, what’s Venom? It’s ok if you’ve never heard of them; I hadn’t either. Venom is a tiny blockchain protocol that’s less than a year old. Its Twitter account was registered in 2022, and its token $VENOM was launched just 4 months ago. Its blockchain currently handles only 5-6 transactions in every block, its daily trading volume is under $5M, and it’s not even listed on Binance yet. I say all this not to make fun of Venom, but to provide context to one of the most critical statements in the release: “Venom Blockchain proved it is superior to other blockchain platforms like Hyperledger, Ethereum and R3 Corda.” Given that the Venom blockchain has near-zero real-world usage, I find that claim to be questionable, at best.

3. But let’s dive into the technology. Looking at Venom’s code repository on Github, we find that their tech is copied from the work of a third-party called EverX Labs (link). If that sounds vaguely familiar, it’s because EverX Labs used to call themselves TON Labs. So what we’re actually looking at is essentially the same blockchain implementation as the TONchain. (If you don’t know what TONchain is, it’s the blockchain protocol borne out of Telegram, the crypto community’s most popular messaging app. It’s the home of Hamster Kombat and other trending tap-to-earn games.) Even Venom’s blockchain explorer, Venomscan, is just a re-skinned version of Everscale’s explorer.

4. The critical thinkers in the audience may be asking: Isn’t the spirit of blockchain to be fully open-source? And yes, you’re absolutely correct, every public blockchain is expected to share their code freely with the world. But what is strange about Venom is that they do not mention their reliance on TON technology anywhere on their website or their whitepaper. The Venom whitepaper describes its “Dynamic Sharding Protocol” at length, but does not mention that it’s cribbing from the TON whitepaper’s “Infinite Sharding Paradigm.” There’s a lengthy comparison between the Ethereum Virtual Machine (EVM) and Venom’s TVM in their developer guide (link), but they never explain that the TVM was not created by Venom Foundation. TVM used to stand for “TON Virtual Machine,” but it has since been renamed to “Threaded Virtual Machine,” probably around the same time EverX Labs changed its own name. These rebranding gymnastics always give me a migraine, and it seems to be particularly prevalent in the Telegram/TON/TVM ecosystem.

5. Currently, there are 3 active blockchains using the same underlying TVM technology: $TON itself, $VENOM, and Gosh. But maybe that’s all fine. Maybe none of this matters, and I’m just overthinking the situation. But here are some of my open questions: Why does $VENOM and its blockchain need to exist if $TON already does? Blockchains derive their security from the size of their network, and if you had a mission-critical use-case like preserving the Philippine government’s documentation, why wouldn’t you go with the largest network for the highest possible security? TON is validated by 385 nodes globally, Venom has just 48.

6. How did Venom even end up on the radar of the Philippine National Printing Office in the first place? Digitizing the country’s paperwork is a good idea — no arguments here — but in order to select Venom you had to skip over a hundred other far more established protocols. Even if you disagree that Ethereum or any of its Layer2’s are a good fit, why ignore TON? It’s the actual battle-tested version of Venom and it’s in the Top 10. It’s hard to miss it.

7. One possibility is that NPO didn’t select Venom at all; it was the software vendor Miquido that did. But that just transfers all of my questions over to them. Based on its previous clientele, Miquido appears to be a pretty strong developer (Skyscanner and HelloFresh are not small projects), and they do have an existing blockchain practice. I’d be really interested to see how their technology selection process ended up with Venom as the leading choice. It seems obvious that TON — or even a vanilla implementation of EverX’s open-source chain — would have been a stronger recommendation.

8. It’s hard to tell if NPO’s “digital transformation” project will actually move forward. The press release is effusive in its praise of Venom and Miquido, but rather noncommittal with its actual plans: “Looking into and possibly using the Venom Blockchain and the Miquido technology stack, the NPO can transition to the issuance of electronic forms.” The wording makes the situation feel quite soft — it sounds more like they’re exploring the possibilities. In contrast, the follow-on statement from the Venom CEO makes it sound like the project has already been fully launched: “This project demonstrates the massive utilization of the Venom blockchain in the form of hundreds of millions of Venom tokens annually […] We are honored to play a pivotal role in the Philippines’ digital transformation journey.” I get that he’s pumping his token price, but wow, what a way to get your present-tense and future-tense mixed up.

9. One last thought to end this discussion with: No matter which protocol they select, the NPO would need to buy and store those tokens in order to pay for network transaction fees. With that in mind, I find it absolutely hilarious that the first crypto to be officially held in treasury by the Philippine government just might be a random alt called $VENOM.