7 ms·

The Token Disconnect

56 points by McGuive7 5y ago

chrisco255 5y ago
> These days I read a lot of cross-disciplinary commentary on the crypto asset bubble, and what strikes me as particularly strange is the sheer level of disconnect between people’s lived experience of this mania. Rather than do an investigation or analysis of some of the broader trends and successful applications of crypto, this article proceeds to make sweeping accusations devoid of earnest research. Here's what I would suggest to the skeptics, to research and understand this space better and why it continues to keep on ticking in spite of the snarky commentary: Uniswap (xy = k) https://docs.uniswap.org/ https://docs.uniswap.org/ the constant product model that Uniswap introduced made automated money markets practical. It's an elegant solution to the problem of creating an on-chain marketplace with a sub-1000 line smart contract. Uniswap has since improved and introduced concentrated liquidity for better capital efficiency. The exchange does multiple billions in volume each day and the best part is: it's immutable. Curve (https://curve.readthedocs.io/exchange-overview.html https://curve.readthedocs.io/exchange-overview.html) While Uniswap is optimal for a long tail of asset swaps, Curve allowed for higher capital efficiency among stable base pairs (such as swaps between two stable coins like USDC and USDT). It achieves high capital efficiency for deeper trades with low slippage. It is decentralized and powered by a DAO. Gnosis Safe (https://gnosis-safe.io/ https://gnosis-safe.io/) Gnosis is one of the most battle tested asset management and multisig smart contract platforms. Each Gnosis Safe is highly configurable, allowing participants to set up any m of n multisig arrangement and even reinvest treasury funds. A multisig can be seen as a light DAO and allows for participants to manage funds in a transparent way across distances and jurisdictions. This helps with coordination and development. The whole world of DAOs is interesting in and of itself, with many different organizational structures being tested and iterated on. Aave https://aave.com/ https://aave.com/ Aave is a lending and borrowing platform that allows users to deposit and lend out their assets. The platform is kept solvent by oracles, which watch the price of the collateral backing the loans to liquidate them if they approach a danger zone. Currently holding nearly $30B in assets. Chainlink (https://chain.link/ https://chain.link/) An oracle platform that allows for off-chain data to be integrated with smart contracts in a maximally (but not entirely) decentralized way. This allows for anything from stock prices to weather reports to credit checks to verifiably random numbers to be integrated with smart contracts to influence their execution and state in a maximally autonomous and tamper-proof way. If you interact with the above protocols, you'll learn more than reading any op-ed thinkpiece. There really is something there there, the decentralized finance movement is burgeoning and it is qualitatively better than what options exist today. It's more powerful, more universal, more programmable, even more antifragile than the systems in place today. It will win in the long run. There are other movements too, with DAOs and NFTs. DAOs will reinvent all sorts of organizations and will make internet native communities self-funded and self-sustainable.
- theamk 5y ago
  How many people start their day and think: oh man, I have such a hard problem of "creating an on-chain marketplace with a sub-1000 line smart contract", I wish there were a product to solve this for me? If you want to show that blockchains are applicable to real world, you don't want to talk about implementation, but about UX. For example, you are a business and need money. Your choices are banks, VCs, and one of those distributed landing / borrowing platforms. For each, how many money can you expect to get? Under what (effective, averaged) interest rate? Whom do you need to conivince? Do you need to provide any documentation? Can you use your existing assets as collateral? An answer to this question will make a much more convincing argument in the long term usefulness of DeFi.
  - kall 5y ago
    Quick answer to a possibly rhetorical question: You cannot get money from these lenders as a business, unless you have already created a crypto token as part of it.
  - chrisco255 5y ago
    Here's the benefits: Uncensorable. Permissionless. Democratic. 100% Availability (Ethereum has 100% uptime for 7 years). No $GME rug pulls like what we saw earlier this year. No Great Financial Crisis due to opaque liabilities (everything is traceable, auditable, open source, solvent, collateralized). Non-custodial. Yield generation. Programmable capital management. It provides superior capital access and coordination mechanisms for not just first world humans, who also see a benefit, but for all of internet-connected humanity. It provides access to a $2.4 trillion and rapidly growing economy. If you are a business and you need money in crypto and you don't live in a hostile jurisdiction like North Korea, Iran, or the United States, you can raise money on-chain. You can create a token with any emissions schedule, staking mechanics, profit sharing mechanisms, on-chain royalties, or whatever you can imagine as a programmer. And even if you're not a programmer, you can lean on tools that help to do that.
    - greyface- 5y ago
      > No $GME rug pulls like what we saw earlier this year. Not true. https://en.wikipedia.org/wiki/Ethereum#The_DAO_event https://en.wikipedia.org/wiki/Ethereum#The_DAO_event Just like $GME, we have a handful of well-connected actors overriding the rules that typically govern the system, in response to a valid but unusual outcome that they don't like personally.
prohobo 5y ago
This is the guy who has been writing the same things about crypto for the past 2 years. He makes a lot of extremely arrogant assumptions then extrapolates from them to weave a narrative that confirms the biases of his readership. I'm not sure why he's constantly re-iterating his opinions with new blog posts... he hasn't seemed to update his knowledge at all since 2019, and his opinions haven't changed. He seemingly has no concern for the state of the economy and public institutions, nor any awareness of the cryptocurrency scene beyond the cryptobros. For anyone trying to understand why so many people are supportive of crypto, first you have to understand why they are against centralization. The whole cryptocurrency "movement" is about solving political and economic problems through technological means, with the main target being centralized power. For most, centralization isn't such a bad thing and seems to be working quite well. These are generally the people who, for example, don't think Google is doing anything particularly wrong. For others, decentralization is the only path to simultaneously progress society and untether it (lol) from legacy institutions. Blockchain is the technology that can enable that and usher in more fair and resilient community systems. That's the "use case" that Stephen Diehl is incapable of finding.
- sandofsky 5y ago
  I've only read a few of his posts so far, and this one seems to do a good job explaining why VCs are so interested in it. It seems like you've simplifying his argument into simply "anti-cryptocurrency," when there are many interesting perspectives explain its irrational popularity. I think you could fill a book on it. On your argument about centralization, do you think that the momentum fueling its popularity is grounded in centralization vs decentralization? Because most of the interest I see boils down to making money via speculation.
  - prohobo 5y ago
    The frenzy is caused by the erosion of previous barriers to entry for investing (the same thing is happening on the traditional stock market), as well as the slow collapse of the middle class, leading people to taking risks and hoping for miracles. That rich people have noticed this and are taking advantage is no mystery. These problems have been caused by the current system, yes. I don't blame the cryptobros for doing it, the same way I understand people drowning in rivers while searching for gold, and it's a problem that did not originate with the push for decentralization. Exchanges and financial institutions have created an environment that reinforces the worst aspects of modern capitalism, and crypto as a technology is the scapegoat that has been gleefully jumped on by the existing ruling class.
outside1234 5y ago
This is going to be a crash of titanic proportions when it finally happens. I worry that what 2008 didn’t destroy, crypto will finish off, especially amongst the under 40 crowd.
outside1234 5y ago
There is a market for crypto and it is potentially large - here is a list: * Money laundering (create a fake NFT and “sell” it to yourself to clean your money). * Illegal Activities (no more money trail for your drug trades!) * Billionaries Transfering Money outside of the bank system (no more pesky gift taxes!) * Pump and Dump Schemes (securities without regulation!) * Bribing Politicians (again, no money trail) * … Here also a list of legal things you can do with it that you can’t with a centralized system:

56 points by McGuive7 5y ago

> These days I read a lot of cross-disciplinary commentary on the crypto asset bubble, and what strikes me as particularly strange is the sheer level of disconnect between people’s lived experience of this mania. Rather than do an investigation or analysis of some of the broader trends and successful applications of crypto, this article proceeds to make sweeping accusations devoid of earnest research. Here's what I would suggest to the skeptics, to research and understand this space better and why it continues to keep on ticking in spite of the snarky commentary: Uniswap (xy = k) https://docs.uniswap.org/ https://docs.uniswap.org/ the constant product model that Uniswap introduced made automated money markets practical. It's an elegant solution to the problem of creating an on-chain marketplace with a sub-1000 line smart contract. Uniswap has since improved and introduced concentrated liquidity for better capital efficiency. The exchange does multiple billions in volume each day and the best part is: it's immutable. Curve (https://curve.readthedocs.io/exchange-overview.html https://curve.readthedocs.io/exchange-overview.html) While Uniswap is optimal for a long tail of asset swaps, Curve allowed for higher capital efficiency among stable base pairs (such as swaps between two stable coins like USDC and USDT). It achieves high capital efficiency for deeper trades with low slippage. It is decentralized and powered by a DAO. Gnosis Safe (https://gnosis-safe.io/ https://gnosis-safe.io/) Gnosis is one of the most battle tested asset management and multisig smart contract platforms. Each Gnosis Safe is highly configurable, allowing participants to set up any m of n multisig arrangement and even reinvest treasury funds. A multisig can be seen as a light DAO and allows for participants to manage funds in a transparent way across distances and jurisdictions. This helps with coordination and development. The whole world of DAOs is interesting in and of itself, with many different organizational structures being tested and iterated on. Aave https://aave.com/ https://aave.com/ Aave is a lending and borrowing platform that allows users to deposit and lend out their assets. The platform is kept solvent by oracles, which watch the price of the collateral backing the loans to liquidate them if they approach a danger zone. Currently holding nearly $30B in assets. Chainlink (https://chain.link/ https://chain.link/) An oracle platform that allows for off-chain data to be integrated with smart contracts in a maximally (but not entirely) decentralized way. This allows for anything from stock prices to weather reports to credit checks to verifiably random numbers to be integrated with smart contracts to influence their execution and state in a maximally autonomous and tamper-proof way. If you interact with the above protocols, you'll learn more than reading any op-ed thinkpiece. There really is something there there, the decentralized finance movement is burgeoning and it is qualitatively better than what options exist today. It's more powerful, more universal, more programmable, even more antifragile than the systems in place today. It will win in the long run. There are other movements too, with DAOs and NFTs. DAOs will reinvent all sorts of organizations and will make internet native communities self-funded and self-sustainable.

theamk 5y ago
How many people start their day and think: oh man, I have such a hard problem of "creating an on-chain marketplace with a sub-1000 line smart contract", I wish there were a product to solve this for me? If you want to show that blockchains are applicable to real world, you don't want to talk about implementation, but about UX. For example, you are a business and need money. Your choices are banks, VCs, and one of those distributed landing / borrowing platforms. For each, how many money can you expect to get? Under what (effective, averaged) interest rate? Whom do you need to conivince? Do you need to provide any documentation? Can you use your existing assets as collateral? An answer to this question will make a much more convincing argument in the long term usefulness of DeFi.
- kall 5y ago
  Quick answer to a possibly rhetorical question: You cannot get money from these lenders as a business, unless you have already created a crypto token as part of it.
- chrisco255 5y ago
  Here's the benefits: Uncensorable. Permissionless. Democratic. 100% Availability (Ethereum has 100% uptime for 7 years). No $GME rug pulls like what we saw earlier this year. No Great Financial Crisis due to opaque liabilities (everything is traceable, auditable, open source, solvent, collateralized). Non-custodial. Yield generation. Programmable capital management. It provides superior capital access and coordination mechanisms for not just first world humans, who also see a benefit, but for all of internet-connected humanity. It provides access to a $2.4 trillion and rapidly growing economy. If you are a business and you need money in crypto and you don't live in a hostile jurisdiction like North Korea, Iran, or the United States, you can raise money on-chain. You can create a token with any emissions schedule, staking mechanics, profit sharing mechanisms, on-chain royalties, or whatever you can imagine as a programmer. And even if you're not a programmer, you can lean on tools that help to do that.
  - greyface- 5y ago
    > No $GME rug pulls like what we saw earlier this year. Not true. https://en.wikipedia.org/wiki/Ethereum#The_DAO_event https://en.wikipedia.org/wiki/Ethereum#The_DAO_event Just like $GME, we have a handful of well-connected actors overriding the rules that typically govern the system, in response to a valid but unusual outcome that they don't like personally.

prohobo 5y ago

This is the guy who has been writing the same things about crypto for the past 2 years. He makes a lot of extremely arrogant assumptions then extrapolates from them to weave a narrative that confirms the biases of his readership. I'm not sure why he's constantly re-iterating his opinions with new blog posts... he hasn't seemed to update his knowledge at all since 2019, and his opinions haven't changed. He seemingly has no concern for the state of the economy and public institutions, nor any awareness of the cryptocurrency scene beyond the cryptobros. For anyone trying to understand why so many people are supportive of crypto, first you have to understand why they are against centralization. The whole cryptocurrency "movement" is about solving political and economic problems through technological means, with the main target being centralized power. For most, centralization isn't such a bad thing and seems to be working quite well. These are generally the people who, for example, don't think Google is doing anything particularly wrong. For others, decentralization is the only path to simultaneously progress society and untether it (lol) from legacy institutions. Blockchain is the technology that can enable that and usher in more fair and resilient community systems. That's the "use case" that Stephen Diehl is incapable of finding.

sandofsky 5y ago
I've only read a few of his posts so far, and this one seems to do a good job explaining why VCs are so interested in it. It seems like you've simplifying his argument into simply "anti-cryptocurrency," when there are many interesting perspectives explain its irrational popularity. I think you could fill a book on it. On your argument about centralization, do you think that the momentum fueling its popularity is grounded in centralization vs decentralization? Because most of the interest I see boils down to making money via speculation.
- prohobo 5y ago
  The frenzy is caused by the erosion of previous barriers to entry for investing (the same thing is happening on the traditional stock market), as well as the slow collapse of the middle class, leading people to taking risks and hoping for miracles. That rich people have noticed this and are taking advantage is no mystery. These problems have been caused by the current system, yes. I don't blame the cryptobros for doing it, the same way I understand people drowning in rivers while searching for gold, and it's a problem that did not originate with the push for decentralization. Exchanges and financial institutions have created an environment that reinforces the worst aspects of modern capitalism, and crypto as a technology is the scapegoat that has been gleefully jumped on by the existing ruling class.

outside1234 5y ago

This is going to be a crash of titanic proportions when it finally happens. I worry that what 2008 didn’t destroy, crypto will finish off, especially amongst the under 40 crowd.

outside1234 5y ago

There is a market for crypto and it is potentially large - here is a list: * Money laundering (create a fake NFT and “sell” it to yourself to clean your money). * Illegal Activities (no more money trail for your drug trades!) * Billionaries Transfering Money outside of the bank system (no more pesky gift taxes!) * Pump and Dump Schemes (securities without regulation!) * Bribing Politicians (again, no money trail) * … Here also a list of legal things you can do with it that you can’t with a centralized system: