“El Salvador is developing a bill to recognize bitcoin as legal tender, according to President Nayib Bukele. The bill’s approval would make El Salvador the first nation to adopt a bitcoin standard.
As of now, El Salvador is set to be the first bitcoin country. And the first country to make bitcoin legal tender and treat it as a world currency and have bitcoin on their reserves.
A brief excerpt of what appeared to be Bukele’s bill harped on a similar theme:
Central banks are increasingly taking actions that may cause harm to the economic stability of El Salvador. In order to mitigate the negative impact from central banks, it becomes necessary to authorize the circulation of a digital currency with a supply that cannot be controlled by any central bank and is only altered in accord with objective and calclable criteria.
El Salvador’s plan sits in stark contrast to a competing vision of money gaining traction among central banks. About 80% are studying central bank digital currencies (CBDCs) in a global push to make fiat more compatible with the digital economy. None, however, have seriously considered implementing that through a cryptocurrency beyond their control.
The 39-year-old Bukele claimed in recorded remarks that his plan will have short-term benefits for thousands of unbanked individuals. He also claimed it will generate jobs.
In the medium and long term, we hope that this decision can help us push humanity, at least a tiny bit into the right direction.”
“Coordination of funding of public goods is something that traditionally governments have solved (with varying degrees of success). By taxing their citizens, and mandating that everyone must pay taxes through use of force, governments have effectively solved the free-rider problem. Either pay taxes or go to jail!
In some nations, this has resulted in strong funding for some public goods. In other nations, the funding is used sub-optimally, or in some cases, is used in corrupt ways and without accountability.
The world is changing and with new technologies and new culture, non-coercive funding of public goods is increasingly possible.
If only there was a technology that allowed groups of humans to choose to easily coordinate with one another! A transparent substrate for trust games where everyone knows where they stand and whose rules can’t be changed on you. My belief is that this is the ultimate legacy of Ethereum.
We can now program our values into our economic system—the final form of a stateful internet could allow us to coordinate the actions of multiple economic actors and therefore could solve coordination failures.
Another way to conceive of the adoption of crypto is as like a multistage rocket:
Phase 1 of the rocket is financial incentives (more rich).
Phase 2 of the rocket is more sovereignty (more free).
Crypto wasn’t created to make you rich — it was created to make you free.“
“When we look back at what event separated the early era of blockchain experimentation into the era of rapid adoption, it will be the arrival of decentralized finance (DeFi).
In the same way that cloud storage could suddenly give a startup infinite storage capacity by plugging into an existing application, DeFi did the same for financial operations. Want to buy and sell in dollars? Stablecoins can be used anywhere. Want to set up a lending operation? You don’t need to build your own stablecoin, because you can use any of the digital currencies already out there – ERC-20 tokens, the standard for digital assets on the Ethereum blockchain, are all (theoretically) interoperable.
DeFi may prove to be particularly powerful because once people start using it, they will find it hard to stop as it gets woven into more and more of their daily business and personal activities. This is driven from the nature of DeFi innovations, which build atop each other, and how those innovations, in turn, will yield further innovations.
The world of DeFi will get bigger and stickier as off-chain assets are integrated. The European Investment Bank’s decision to issue digital notes on the Ethereum blockchain is just the start. However, stickiness isn’t just more assets or different types of assets and services, it is integration into automated business processes. Individuals and companies will start to plug their cash flows and assets into DeFi ecosystems as a routine part of their personal and business financial processes.“
See Also: Introduction to DeFi and Yield Farming (Video, Recommended Watch)
See Also: Did Elon Musk Just Pump CumRocket?
“Etherisc has integrated an Ethereum-based smart contract platform into ACRE Africa’s existing weather index insurance product, “Bima Pima”. Earlier this year, ACRE recruited and trained approximately 300 Village Based Agents (VBAs) on the mechanics and benefits of the updated insurance product. The VBAs sold these new policies throughout 17+ counties across Kenya to over 10,000+ smallholder farmers during the 2021 long rains season.
In an extreme weather event, the policies are automatically triggered — facilitating fair, transparent, and timely payouts.
Through this pilot, for the first time, we are integrating blockchain smart contracts into an existing weather index product at scale to measure the impact on operational costs, streamlining and simplifying payouts, and automating claim inquiries.
Less than 20% of smallholder farmers worldwide have crop insurance, and the numbers in Sub-Saharan Africa are even lower — a meager 3%.
One of the biggest challenges that has hindered the uptake of microinsurance, including agricultural insurance, is trust.”
“Extending the MakerDAO protocol to new chains necessitates a thorough analysis of security assumptions and risks that these new chains or Rollups introduce.
MakerDAO is uniquely positioned to take advantage of the growing ecosystem by:
- Providing cheap access to DAI on Rollups and Sidechains for users currently priced out of Ethereum due to high gas prices. By doing so, the demand for DAI amongst retail users will increase.
- Allowing minting of DAI directly on L2s and other chains using whatever collateral is available on those chains. That will promote growth in the overall supply of DAI.
- Minting DAI to provide virtually unlimited liquidity for fast withdrawal bridges, chain-to-chain communication channels (see Connext, Hop) and other protocols potentially suffering from a liquidity crunch
- Using collateral that is native to other chains including base tokens such as FTM, SOL, AVAX, etc… without needing to bridge and wrap them on Ethereum
The complexity of the multichain world brings new challenges and risks, including:
- Many versions of DAI create confusion in the community, especially amongst retail users
- Minting rights for DAI outside of L1 Ethereum creates a serious attack vector if the minter is compromised (unlimited amount of L2 DAI could be minted and withdrawn to L1)
- DAI can get stolen/stuck in the L1 part of the bridge (either through user error sending DAI to the bridge or a bug in the bridge)
- Collateral on L1 that is currently used to mint DAI may be increasingly moved to various L2s or other chains in pursuit of better yield opportunities flowing out of current Vaults, thereby reducing the overall amount of collateral that is available to mint DAI on L1 Ethereum
- Complexity regarding collateral liquidations and global settlement will greatly increase
Maker protocol needs collateral to mint DAI. If more and more collateral is moved to other chains, Ethereum may eventually become a global settlement layer for these chains / rollups while most of the actual DeFi transactions will happen on L2s. The Maker protocol will need to chase the value flowing out of Ethereum while properly managing risks and maintaining the base ledger of all DAI minted in the entire multichain universe. Ultimately, when the multichain ecosystem matures, in the post ETH 2.0 world, it may be worth considering moving Maker’s ledger (VAT) onto a rollup with most liquidity (for composability) or its own Rollup (for speed of execution and the low cost of Oracle updates).
The ideal solution would aim at making bridged DAI and minted DAI fully fungible so for the end user this is the same DAI. This is ultimately possible only if MakerDAO controls the bridge used to transfer DAI to other chains / rollups. DAI bridged with third party bridges should be always considered “wrapped” DAI. Note: the Optimism DAI bridge was already approved by the community.“
See Also: Arbitrum Team – Bankless Podcast (Video)
“With the greatest technical challenges behind us, we’re starting our sprint towards smart contract deployments in an EVM-compatible environment. The first version of the testnet is live: you can already check out the activity on zkSync 2.0 with a block explorer.
zkSync’s zkRollup technology combined with Eth2 data sharding is the endgame, hitting 100,000+ TPS without sacrifices on any of the 4 factors [Security, programmability, scalability, decentralization].”
See Also: Introducing Divergence
“Layer-2, DEX liquidity pool position strategies, and insurance is on the horizon for the rapidly-expanding team.
A lot of the strategists have been playing with sidechains, re-deploying vaults on sidechains. The vault would still be on ETH, but it would source liquidity via a bridge from the sidechain.
In the end, he thinks that rollup solutions are where the space will largely migrate.
We’ve been working for a while to try and get DEX strategies to work, because you have to deal with impermanent loss.
The difficulty with these positions is in limiting downside, especially at times of market volatility. Options derivatives for hedging positions was one strategy initially tested, but decentralized option platforms largely lack liquidity and the pricing makes it an impractical solution.
Regardless of the exact method, finding a workable DEX strategy is a priority given its one of the few sectors Yearn has yet to explore.”
“V3 featured some massive improvements to the protocol—such as the introduction of concentrated liquidity for better capital efficiency. And the capital efficiency isn’t just a little better—Uniswap V3 is like 4,000x more capital efficient. This means that your money is being put to work more efficiently. You can make more money as a liquidity provider in Uniswap V3.
But providing liquidity to V3 isn’t as simple as it was before. From setting your price ranges, to using the proper fee tier, to having an NFT to represent your LP position, it can be overwhelming for new users.
Let’s figure out how to make money in the newest version of Uniswap.”
“Texas Gov. Greg Abbott (R) signed into law a measure creating a legal framework for cryptocurrencies and blockchain in the hopes of making his state a magnet for the industry, the way Wyoming has become and what Miami Mayor Francis Suarez is trying to do with that city.
The new law amends the state’s Uniform Commercial Code to better adapt commercial law to blockchain and digital assets, formally defines virtual currencies and offers individuals and businesses a legal environment for crypto investment.
According to the National Law Review, about 25 states are considering blockchain and/or digital asset-related measures in their 2021 legislative sessions.“
“Everyone should have all eyes on Africa right now. Africa’s leading [in] global cryptocurrency adoption.
Nigeria is Paxful’s biggest market to date, with around 1.5 million users and $1.5 billion in trade volume. Thanks to Nigeria’s tricky exchange rate policy, inflation and large number of unbanked adults, cryptocurrencies like bitcoin are increasingly used as an alternative store-of-value.
Youssef added that in addition to leading markets like Nigeria, new markets are “blowing up” every day. He expects Cameroon and Ethiopia to be strong contenders for emerging crypto markets in the next few years.”
“The price of bitcoin and other cryptocurrencies fell Saturday morning after a large number of cryptocurrency “Key Opinion Leaders” (KOL) on Weibo were blocked, a move some are viewing as signs of a further crackdown on crypto by China’s government.
The blocked accounts are a mix of influencers, media outlets, miners and wallets.”