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2020 has been quite the year in decentralized financial markets. With the advent of popular international central banking monetary policy focused on floating traditional markets despite economic realities, renewed interest has arrived in decentralized markets. This is happening as DeFi has continued to mature with yield farming adoption, better Web3 user experiences across the board, and continued innovation around stablecoins.

This year we saw Synthetix add traditional financial indexes such as the Nikkei, as well as binary options. While aggregation platforms such as Yearn have taken off, new types of tokenomics models through platforms such as Compound (with their COMP token) have drawn more interest into new types of DeFi markets, while REN has been building decentralized brides between more and more blockchain platforms. Matic has a Plasma implementation which promises to lower the growing fees across the Ethereum ecosystem through their sidechain technology, while Ethereum 2.0 is well under development to bring on-chain scalability as well. …


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Sony Aibo

2025 is going to be much cheaper since buying dog food will be an option. Obviously, not for your real dog… the other one. With more advanced disease prevention and treatment technology, tobacco smokers may not even have the same urgency to quit smoking as they do today. Though, I’m not sure cigarette conglomerates will be next hot stock, as new types of habits are capturing neural pathways these days. Food is already making itself in restaurants, and it’s only getting cheaper and happening more. …


These are the instructions for simulating Ethereum-based DeFi hacks. You can learn more about how Bricks simulation kits and manuals work here on Github.

In this Bricks project, we are going to simulate a few Ethereum-based platforms, such as decentralized exchanges, a flash loan provider, a margin platform, and a few ERC-20 tokens.

We will embed a backdoor attack inside a token, then place that token on an exchange similar to the functionality of Uniswap. Further, we will activate that attack to produce a Re-Entrancy attack to generate double the funds of what we should receive for a trade. We will also create a very simple flash loan provider that provides us with capital to execute an oracle manipulation attack that allows us to manipulate the pricing data on a DEX, allowing us to know the future movement of a set of assets and benefit from that knowledge on a platform with leverage (like dYdX in real life). …


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I recently read that an Ethereum miner received an unexpected sum of $2.6 million. This was due to a user error in which someone with a lot of Ether accidentally paid an enormous gas price for a transaction. You only need to add a few zeros to one input to do this (and have the money of course). This unfortunate individual was only trying to move about $100 in value when they paid the enormous sum.

The lucky Ethereum miner offered to give the money back to the user. This may be an interesting starting point to discuss character and morality in automated, trustless, decentralized systems, such as blockchains. I often hear my blockchain development colleagues say “Code is law”. For the uninitiated, that means that, unlike traditional financial systems, there is a certain distinct finality to events that occur in completely machine-legislated mechanisms where no one party can reverse machine decisions. On the Ethereum blockchain, agreements between parties are legislated by smart contracts or the protocol itself. Pay too much in gas? There’s no one to really compel the receiver of those funds to reverse that error. Same goes for the Parity debacle in which over $100 million dollars was frozen and locked off from thousands of people due to a programming error in a multi-sig smart contract. The only way to reverse that particular phenomenon would be for over 51% of Ethereum miners (represented by hundreds to thousands of people around the world) to vote on a hard-fork and disrupt the entire blockchain ecosystem. They opted not to do this. Were they wrong in this? …


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Many companies in the decentralized finance/blockchain space are working towards solutions to make this utopian ownership model a reality. However, many legal professionals, and in most instances rightfully so, write these initiatives off as infeasible at best, and fraudulent or outright illegal at worst. However, when we look at wealth inequalities and the root causes, one source often cited is the disparity in access to property and equity ownership. …


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There has been quite a bit of talk about Uniswap V2 since Devcon last October. Let’s start with the basics.

Uniswap V2 transactions are more expensive to perform than Uniswap V1 transactions.

Here’s 1 DAI converted to Ether on the Uniswap V1 contract: https://etherscan.io/tx/0xfc532c58c5735c56869c221275764757eb2710c7441aa25a28bb47b8be0a7543

And the same conversion on the Uniswap V2 contract: https://etherscan.io/tx/0x14711f244663a50e844de9aefeabc3185e8b40672a5926fc42d0dd7668ba26f1

$0.41 versus $1.32 is a noticeable difference. Gas is pretty expensive right now (32 gwei), so under normal gas price circumstances, these transaction fees might be a bit lower.

Another thing you might notice is that Uniswap V2 no longer uses the native Ether token for swaps. Instead, they are going with WETH, which makes sense as it’s just wrapped ETH, yet can be treated like every other ERC20 token. Not to mention, there was quite a bit of price discrepancy between ETH and WETH the last few months on the Uniswap V1 Exchange, which is obviously a bit nonsensical. …


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In the midst of this crisis, Ethereum has been making more and more appearances as a settlement mechanism on Bloomberg terminals. Popular cryptocurrencies such as Bitcoin and Ethereum have bounced around, but prices are in the same range they were in before the coronavirus crisis began in the beginning of the year. Bitcoin, Ethereum and other popular cryptocurrencies have a notorious history of disconnection between utility and price. …


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Today, with the emergence of stable coins and DeFi, we now have crypto-assets that produce cashflow, albeit mostly not from activity occurring in the real economy. Compound’s cDAI is pegged to the value of US dollars, while producing synthetic interest at variable rates depending on borrowing rates. Borrowers within the Compound ecosystem leverage borrowed DAI to mostly speculate on the movements of cryptocurrencies. While novel in implementation, this hardly qualifies as value-creation in the real economy. Therefore, we are mostly still waiting for blockchain-based assets to mature into real economy wealth-generators and ideal investment vehicles in the eyes of seasoned investment managers like Ray Dalio, who calls stable forms of money masquerading as investments such as cash “trash”. …


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Public blockchains are inherently adversarial participation systems. A good philosophy going into any blockchain transaction is essentially not to trust anyone or anything. Enter DeFi.

We have constructed DeFi ecosystems, such as Compound and Kyber Network, for lending, borrowing, exchanging and governing that require very little to no trust. One big draw to the trustless nature of these platforms is that the smart contracts that govern the rules of capital flows are immutable… until they aren’t. For example, MakerDAO has the multi-collateral token DAI which is a replacement of old single-collateral DAI (now dubbed “SAI”) with new sets of logical improvements. New smart contracts were simply created and everyone was told to move over to the new ones. …


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One of the most interesting aspects of blockchain technology to me is the fact that anyone can serve as a facilitator of economic activity. Today, we rely, as we probably should in most cases, on large financial institutions to facilitate most of our economic throughput. But there are limitations to how they serve us versus the breath of options open among themselves.

For example, someone might want to open a 10x leveraged long position on the SPDR® Portfolio Corporate Bond ETF (SPBO). Today, good luck finding a trading platform that lets you invest in bonds using meaningful leverage. You can find plenty of platforms for trading currencies with 10x, 20x, even 50x leverage. …

Mike De'Shazer

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