See Also: Notes on ETHGlobal’s Merge Summit (Recommended Read)
“With the ETHGlobal Scaling Ethereum summit currently ongoing, we have tons of news on rollups. Here are some highlights.
Matter Labs announced details about zkPorter. By adding zkPorter to the mix, we now have scalability that’s completely impossible with L1s unless you centralize your validation to supercomputers like Solana is doing – at this point, it’s no longer a decentralized, trustless network.
Of course, Matter Labs is not alone – StarkWare is building a similar solution for StarkNet, where they will have a data availability consensus mechanism to add to Validium. However, StarkNet is only planning to get there in 2022, while zkSync 2.0 will potentially have the entire stack live on mainnet by late 2021. There’s plenty of exciting progress for StarkNet before then, though. In May, we will have the StarkNet single-app rollups – what they call Planets.
Optimism and Arbitrum both have their public release-candidate testnets out now. Optimism is taking a more conservative approach with guardrails and whitelists for contract deployment on mainnet. A common misconception is that “Optimism is delayed till at least July”. In reality, they have been live on mainnet since January. As per their whitelist approach, we’ll see Synthetix to gradually move more of their functionality over to L2 over the next couple of months, and I expect to see Uniswap V3, Maker Protocol and a handful of others join them there. The July timeline is for when Optimism turns off the whitelists and anyone will be able to deploy smart contracts.”
“Today, if there’s anything that people tend to agree on (at least in the United States) it is that “The economic system unfairly favors the powerful.” The systems, protocols and incentives we create now can be less susceptible to censorship, government overreach and misinformation.
Ethereum 2.0’s design has a number of attractive attributes that make it exceptionally well-positioned to reliably operate through the choppy waters ahead as a neutral infrastructure. Individuals, enterprises and governments can be confident that Ethereum 2.0 will continue functioning in the instance of individual or state-actor level attacks. It is a solid foundation on which to build economic and financial infrastructure.
Eth2’s features are particularly relevant when viewed through a broader socioeconomic context:
- Governance through rough consensus — Vitalik Buterin, co-founder of Ethereum, wrote a convincing post suggesting credible neutrality, or “a basic effort to be fair,” which should be a guiding principle in protocol design.
- Robust and performant in the face of censorship — Ethereum 2.0 researcher and tech developer Carl Beekhuizen outlined how Eth2 can continue producing blocks, even if there is a massive disruption that knocks a large number of validators offline, preventing the network from reaching finality. This robustness allows essential business functions to continue operating on Eth2, despite massive network disruptions.
- Reliable money for the decentralized economy — Ether (ETH) incentivizes participation on Ethereum via mining rewards. It also serves as the base asset for the decentralized economy built on top of Ethereum by functioning as a base trading pair, loan collateral and more. Eth2’s design builds upon and expands ETH’s moneyness characteristics in two ways:
- Eth2’s rate of inflation is expected to be less than 1%, one of the lowest inflation rates of any protocol and much lower than the dollar.
- EIP-1559 (which will likely be active on Ethereum even before the transition to Eth2) will make ETH more scarce, and therefore potentially more valuable, as Eth2 usage increases.
- The Ethereum community follows a policy of minimum viable issuance to keep the chain secure against attacks. This approach is markedly different from today’s economies, in which central banks have tremendous control over monetary policy. Users, enterprises and governments can feel confident working with Eth2 because its base unit issuance is only used for one specific purpose: security, and that raison d’être cannot be repurposed to serve alternate goals. Additionally, the entire monetary policy is known and public, so everyone has equal insight and access to understand all protocol rules.
- Empowers and enables self-sovereignty.”
“What the internet did to content, crypto is doing to assets.
DeFi democratizes the creation of financial assets. Before crypto, creating a financial asset was gatekept by banks and institutions. You needed millions of dollars to launch a new asset. No longer!
What does the world look like when anyone can build a new financial asset? What strange things might people start adding to their portfolios? Maybe you’d want price exposure to Bankless twitter follower count? This is the true power of synthetic assets on Ethereum—you can literally create a financial asset for anything.
In the same way YouTube allowed new forms of long tail video content to flourish (think unboxing videos, or Twitch streams), synthetic assets will enable new types of financial products we haven’t even imagined yet.”
“With a liquidity mining program set to launch on Monday, Aave could be on the cusp of becoming the dominant decentralized finance (DeFi) lending protocol.
Starting on Monday, 4/26 liquidity providers and borrowers in Aave’s USDC, DAI, USDT, GUSD, ETH, and WBTC pools will earn stAAVE rewards in addition to their standard interest yield. The goal of the program is to “drive lending and borrowing activity across markets,” as well as increase the decentralization of the protocol’s governance by distributing governance tokens to more users.
The proposal allocates most of the rewards on stablecoins meaning that we will see substantial increase in TVL.”
“Aztec network is a Layer 2 (L2) privacy protocol on Ethereum. Last month, Aztec launched a new version of a Ethereum privacy app called zk.money. It’s now live on mainnet! Since launching just a month ago, Aztec has already successfully processed over 10,000 transactions.
This technology enables private transactions on Ethereum coupled with a scaling solution leveraging Aztec’s private rollup. So not only do you save on gas fees, but all your payments stay private as well! Aztec users can transact anonymously without unveiling their addresses, balances, nor their transactions.”
See Also: zk.money
“The low prices offered in the early days of ride-sharing and couch-surfing are gone. Like the sellers in the marketplace, many are not happy to find the rules are changing and the increasing fees are coming on both ends of the transaction.
As blockchain technology matures, it is increasingly possible to build competitive decentralized ecosystems that offer similar services. Companies are getting better at structuring decentralized markets, leveraging designs that reward consistency and quality, and infrastructure that can handle some level of decentralized dispute resolution.
A fairly typical business model is starting to emerge, where an open-source protocol is developed and a decentralized community takes over the long-term governance. A foundation or company is charged with doing the heavy work of maintaining and maturing the protocol in exchange for a sizable (but not dominant) chunk of the network governance and reward tokens.
This more mature decentralized approach balances the openness and transparency required to get buyers and sellers to join while putting enough incentive in the hands of a single entity to assure that someone takes a leadership position in maturing and shepherding the protocol forward.
When this new model comes to these sharing services, real-world, non-financial consumer services may face a much tougher fight. It will be the battle of Web 3.0 vs. Web 2.0.”
“Widespread adoption of the digital yuan – also known as the e-CNY – could give China’s central bank more data on financial transactions than the big tech giants, allowing the Communist Party to both strengthen its grip on power and fine-tune policies to bolster the economy. While cryptos seek to disintermediate the state from monetary transactions, a digital yuan would do the opposite and give the PBOC even more sway and minute control over every single transaction, while obliterating monetary anonymity entirely.
Instead of challenging U.S. dollar dominance and neutralizing sanctions, the digital yuan appears potentially more geopolitically significant as leverage over multinational companies and governments that want access to China’s 1.4 billion consumers. Since China has the ability to monitor transactions involving the digital currency, it may be easier to retaliate against anyone who rebuffs Beijing on sensitive issues like Taiwan, Xinjiang and Hong Kong.
China’s state-endorsed boycott of H&M shows “great commercial risk” for companies that use the digital yuan. If foreign merchants had to use the e-CNY, he said in a separate email, the government could prohibit transactions with H&M wallets and the store could disappear from digital yuan apps.”