Future of Ethereum: What I’ve been reading
Hi folks, I haven’t written in a bit, so here are some links to what I’ve been reading.
Future of Ethereum
One thing I care about is the robustness of Ethereum — because I think Ethereum is the most secure of all smart contract chains at present and I’m currently building on it.
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My main concern with Ethereum right now is the risk of centralisation after the merge with the beacon chain. Quite simply, most staking is happening via LIDO — so it looks like the Ethereum Proof of Stake chain will be more centralised than the Proof of Work version at present. A few news updates on this front:
1.. Vitalik tweeted to suggested that actors should self-limit to never have more than 15% of staked Ethereum:
I wonder, who will be the first staking provider to publicly commit to limiting themselves to not operating more than 22% of validators on the chain? Who do you want to see step up to the plate and prioritize beacon chain health above profits?
2.. LIDO actually held a vote on whether to self-limit, and it was highly unpopular:
3.. From the LIDO forum post, here are some reasons against LIDO self-limiting:
My view is that even if LIDO limited their staking %, there would be other entities that would not. So, this isn’t a LIDO specific issue.
4.. Kind of a crushing sentence here, again from the LIDO forum post (btw, the post was not authored by LIDO but by forum member vsh, who discloses no stEth or LIDO ownership):
Moving on to other topics:
5.. I saw that Maple Finance — who were offering high yields on stablecoin deposits — have depositors who won’t be able to withdraw for some time.
6.. Meow is a platform that offers nice UX for using Maple finance — targeting corporate customers. I just went to their website Meow.co and there aren’t any recent blogs. Meow didn’t manage the risk of the funds — that was on the investor, as I understand. I remember considering putting money on Maple. I saw there were companies like Alameda (FTX’s parent company) borrowing funds at above 10%. I just didn’t understand how to weigh the credit risk on those high yields, so I couldn’t get comfortable to do it.
7.. dydx is an exchange for perpetual contracts. It currently runs on Ethereum. I don’t own any dydx but it seems solid as a protocol based on quality of code and documentation (e.g. via DefiSafety’s review) In big news, dydx are now going to build their v4 using a Cosmos blockchain design. This doesn’t mean dydx will be on Cosmos itself (with the Atom token), but dydx will build their own chain using Cosmos architecture. This is what Terra did — Terra was a Cosmos based chain.
I’m really happy that people are building on other chains than Ethereum because — like the Cosmos founder, Ethan Buchman — I’m worried about there just being an Ethereum empire (more on that here).
8.. As an interesting aside, here is how the Cosmos Hub blockchain (i.e. not the Terra version or the dydx version) has done with it’s native gas token over the past half year versus Ether:
9.. And here’s how dydx has done versus Ether:
Basically, Bitcoin crashed a lot, Ether crashed more, and most of everything else crashed even more.
That’s it for this week. Disclosures: I own Bitcoin and Ether.
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