📌 An opinionated recap of the most interesting news in crypto
Token Economy
Got forwarded this email? Subscribe here. Subscriber? We'd appreciate if you could forward it to someone who would find it valuable. 🙏 - [view in browser] -
Along those lines, the NuCypher team have been thinking about an improved model for token distribution ahead of mainnet that minimizes regulatory uncertainty and speculation, while ensuring tokens end up in the hands of as many actual users as possible.
This is evidently an emerging narrative as many teams are approaching launch.
Really interesting game-theoretic perspective by Virgil Griffith on Ethereum and its power to turn non-cooperative games (eg the Prisoner's Dilemma) into cooperative games.
Transcript of Jason's Choi podcast episode with Sunny Aggarwal, researcher and core developer at Tendermint. It provides a great overview of interoperability and of how Cosmos and Polkadot compare.
Jake from CoinFund published this cool demo around Governance models.
His tweetstorm about it (longer than what we're copying here:
"Overall, valuing governance tokens by relative influence over votes opens up a new class of valuation conundrums:
1000 users @ 1 unit of voting power each are less influential than 1 user @ 1000 shares. So 1 unit of the currency is worth 0, but together their value increases...
If markets begin to value governance tokens based on their influence, then this has some interesting and negative implications for liquidity of governance tokens (perhaps mitigated by lending.)
Overall, this analysis may help inform design of voting systems using discrete distributions of tokens. I am looking forward to community thoughts and feedback."
Polaris is another gorgeous piece of defi that leverages the Uniswap protocol.
It's a trustless price oracle for ERC20 tokens that takes the price feed from Uniswap and then builds a layer of incentives on top of it to make it more reliable. It does so because Uniswap's model is quite prone to price slippage and could be manipulated, if someone were to use its spot price as an oracle.
So what Polaris does is it makes its price feed more costly to manipulate by using the median of the last 15 'checkpoints' instead, and charges smart contracts a fee (5 ETH/month) for reading access to the oracle. Those fees are then used as an incentive for third parties to 'poke' the Uniswap feed if certain conditions are met (in simple terms if there is a material divergence between the oracle and the Uniswap price). A valid poke mints an 'oracle token', which can be redeemed for fees by burning it (a mechanism similar to Uniswap liquidity tokens).
🤯 and kudos to the Marble Protocol team for coming up with this elegant model for a decentralized, trustless, manipulation-resistant price oracle.
0x is introducing a new way to share orders between relayers, called Mesh. It feels a bit strange that it wasn't implemented this way since the beginning.
I think this is a brilliant move from 0x tho, which takes its true goal of completely networked liquidity much closer to reality.
Also, they "Eventually plan to extend 0x Mesh to support any arbitrary DeFi protocol which uses off-chain messages."
Another pretty cool feature of mesh is that "0x Mesh can also run directly in a browser. This introduces the possibility of a new type of “serverless relayer” which only requires a front-end UI and doesn’t require any backend services".
Just last week we wrote about Rainbow Network, and this week UMA has announced the US Stock Index Token.
As you might have figured out by now, we think this is an *absolutely massive* innovation.
"USStocks is an ERC20 token representing synthetic ownership of an index of the 500 largest exchange-listed US stocks."
I don't think the importance of that can be understated. From today, as they write: "This means that anybody with access to the internet and digital money can participate in the US stock market."
AND, this also means that we now have new synthetic instruments that we will be able to plug into the other DeFi ecosystem.
Not a new fund, clearly. But more AUM for Michael Arrington's fund after a whopping $30M check from one of its largest LPs. 🙌 The most surprising bit though is that Ripple isn't one of them.
The other piece of news is the merger with an Australian hedge fund called ByteSize Capital, so now they are firing on both the illiquid and liquid cylinders.
Kyiv-based GEO Protocol announced their Seed round, led by Coinfund. The team has been working on and self-funding the business all the way since 2013, before 'decentralization' was cool.
With the emergence of L2 solutions, GEO is now focusing on the payment infrastructure for a "lightweight overlay network connecting trustless payments via Layer 2 off-chain processing and fiat-based payments", enabling things like cross-boarder Venmos.