đ An opinionated recap of the most interesting new products in crypto
Token Economy
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Recursive zero-knowledge proofs with no trusted setup.
Pretty mind-blowing progress in ZK-land lately. The latest breakthrough comes from the Electronic Coin Company team (who launched and supports Zcash), who have uncovered how to achieve practical zero-knowledge recursive proof composition *without* requiring a trusted setup.
Recursive proof composition is very Inception-y, where a proof verifies the correctness of another instance of itself. Meaning one only needs one proof to verify an entire blockchain potentially, or any amount of computational effort really. The implication is that this design (aka 'nested amortization') eliminates completely the need for a trusted setup, *while* obviously still delivering on scalability.
A zero-day fork of the Edgeware with different distribution.
We haven't followed this one particularly closely, but it's super interesting to see a live case of a blockchain that launches on mainnet *concurrently* to its fork (is this a first?). The main difference with Edgewere is that Straightedge tweaked the genesis distribution mechanics so that smart contract participation (ie where users are not in direct control of funds) was excluded. The idea was to make it more fair. A fascinating example of A/B testing from birth in the permissionless world.Â
On-chain lending protocol with interest rate discovery.
Dan Robinson from Paradigm came up with a protocol to issue zero-coupon bonds on Ethereum (called yTokens).
It works like this:
To "borrow" DAI: deposit ETH, mint (overcollateralize) yDAIs for the desired term and sell them.
To "lend" DAI: just buy yDAIs for ETH for the desired term.
yDAIs are fungible so they can trade permissionlessly on Uniswap.
The big implication of this design is that a decentralized yield curve naturally emerges for the price yDAI trades at for different durations (as it pays off $1 at term, it should trade at discount to account for the time value of money).
Hybrid Ethereum-based DEX with off-chain order matching and on-chain escrow / settlement.
Latest take on DEX coming out of Berlin and quietly going live on mainnet. They aggregate other smart contract based liquidity pools like Uniswap, Kyber, Bancor and Eth2Dai and ensure the order gets executed at the best available price. They also implemented Gastoken to smooth out gas volatility, meaning it could end up being cheaper than Uniswap in times of high gas prices. Their Delegated Signing Keys feature allows multiple addresses to sign txs for the same wallet from any device (while restricting withdrawals ability), enabling things like sub-accounts which pro-traders might be demanding. No KYC at the moment, but not sure how long that's going to last.
It's cool to see some of the best teams in Defi decided to announce new product launches at the Defi Summit London. UMA is one of them, releasing their token builder on testnet on day #2. The idea, as one of their team members put it to us in simplistic terms, is the mirror image of a MakerDAO CDP i.e. you lock up a stable asset (eg DAI) and mint a volatile one (anything, as long as there's a price feed for it). The token facility is overcollateralized, so anyone owning the synthetic (taking a long position on the price feed) can verify it is fully backed by its issuer (who's short the price feed) and penalties occur when margin drops. Oracles are obviously critical to the trustlessness of the system, and UMA is doing great work on that front too.
Synthetic asset that tracks the deviation of DAI's price from its dollar peg.
Singling this one out of the many other amazing projects emerging from the latest ETHBoston as it's built with the UMA Token Builder (see just above), but mostly to highlight that naming flavours of DAI has now firmly entered uncharted Zoology territory. In all seriousness, this is very cool: it's essentially a synthetic token that gives exposure to DAI deviating from its peg (as a form of potential insurance for DAI holders or as a speculative play), with the supply side of the trade taken by anyone willing to price (and collect) the premium (eg MakerDAO itself).Â
Preston Byrne should be all over it, though he's more into marmots.
A survey of active on-chain mixer efforts for Ethereum, including history, context and benchmarks.
We've been featuring a number of approaches to bringing privacy to Ethereum transactions lately, so we thought we would surface this excellent report commissioned by MolochDAO on the state of the mixer market as of Summer 2019. Just in case you missed it. đš
Prototype of an Ethereum coin-mixer built on Enigma.
Speaking of which, here's yet another approach to transactional privacy on Ethereum, built on L2 Enigma network. The post goes into some degree of details, however the key differences here with traditional ZKP mixers are Salad requires ~1/7 gas cost and provides a non-interactive UX (ie you don't have to interact with the contract both during deposit and withdrawal but only once).
A fiat/crypto deposit account that earns interest in real-time via Compound.
Defi fumes are still coming out of our ears after the Defi Summit London, but here's another app that aims to bridge with the real world by taking fiat (or stablecoin) deposits and earning interest via Compound. A "guaranteed" returns always makes you wonder, but the cool thing here is it's paid out in real time, every second. Feels like something along those lines, powered by crypto rails but looking like a neo-bank, could be a good wedge into the mass non-crypto market.Â
PS: Outlet came out a few weeks back with a similar proposition.
A set of smart contracts and off-chain oracles that automatically allocate crypto assets to the highest yielding opportunities.
This has been on the narrative watch for a while, since MetaMoneyMarket and Topo Finance unveiled their work (was great seeing both at the Defi Summit last week!). The Robo-Advisor for Yield (RAY) has been conceived by the Staked team, known for their staking as a service business (which inevitably will end up overlapping with the robo-advisory one). Interesting carry-like fee model where 20% of the alpha over a benchmark reference rate (currently Compound) goes to a separate pool (though I am not sure I understood who controls it).
An API to connect any crypto wallet to any application in a few lines of code.
Very interesting tool for developers, and not just those working in crypto.
The team at Zabo have released an API that standardize any wallet connection (exchange wallets, mobile wallets, browser wallets, hardware wallets, custodial or non-custodial) into the same format for developers. Immediate use cases in Defi, but also for general fintech companies looking to had a crypto product without the regulatory and technical complexities.
Token-powered micro-economies around individual research initiatives to ultimately improve the drug discovery process.
Rumour has it that Unplugger Paul K had the breakthrough while swimming in a frozen lake at 2,700m asl. And now he's finally unveiling the first iteration of Molecule platform, that will be using token bonding curves to round up funding for more research and ultimately improve the drug discovery process. In this version, going live in Q4, the tokens will be a proxy for the level community interest in a specific project, however this clearly lays the foundation for the regulatory framework to ultimately re-assign fractional ownership in IP. Which would be awesome.
A wallet and fully featured browser that lets you interact with web3 dapps via debit card.
We've been secretly dreaming of something like this for a while, so it's awesome to see someone finally executing on it: complete economic abstraction allowing a USD-native UX, even when the dapp doesn't accept USD. Built on Ethereum, 0x, and USDC.
Another important piece of infrastructure for Ethereum developers has landed in public beta, allowing to search and retrieve data in a single stream from the entire transaction history of the blockchain with a simple query language. Worth a look if you are building on Ethereum.
An experimental redistributive currency built on Ethereum.
An interesting experiment just launched, architected by the co-creator of the Occupy Wall st movement. It's a autonomous smart contract that issues a new capped-supply currency when ETH is deposited, and then redistributes 2% of every transaction to every holder. Lots of questions, like what's the incentive to spend it, but keeping an eye on where it goes from here and always amazing that new economies can be experimented and participated by anyone.
Sparkswap is a new way to onboard users to BTC and specifically to the Lightning Network. It's a cool implementation of the AnchorUSD API, which handles the fiat to crypto exchange, as well as the KYC. Sparkswap never sees the assets itself.
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