Exchange Staking

1/ A quick thought on exchanges entering ( & probably dominating) the staking arena in PoS networks. The major advantage of staking with an exchange is not the 0 fees, it is the ability to trade while your asset is “locked” for staking!

2/ @binance, and other centralized exchanges, issues depositors a certificate of deposit (CD) that they freely trade while the asset itself is being locked on the network for staking. Users staking on their own or through STaaS validators don’t enjoy this advantage.

3/ Worst case scenarios include: a. Exchanges complete control of PoS networks dominating their governance and their monetary policy. b. Exchanges using STaaS providers as contractors and have a hidden control over the STaaS businesses and PoS networks

4/ There may be some possible ways to even the playing field: a. Decentralized CDs that can be traded on exchanges (CEXs or DEXs). I know @zmanian was considering building this. b. Partnerships between exchanges & STaaS providers to trade synthetics of the staked assets.

5/ Although these may also introduce different risks to PoS networks, it is better to work on solutions now before facing the day when most PoS networks are controlled by a handful of centralized exchanges and their CEOs.

On chain Governance

Throughout the year, we have seen both successes and failures in on-chain governance/co-ordination for different systems. Blockchains like Tezos and Cosmos upgraded their networks via coin-weighted voting mechanisms, and systems like MakerDAO adjusted interest rates through it’s own Ethereum-based coin-weighted voting system.

I personally feel that Tezos is the leader in on-chain governance sophistication, as the blockchain went through two protocol upgrades over the course of the year, both of which come close to a truly autonomous upgrade. Two noteworthy accomplishments:

  • The Tezos Athens upgrade successfully tested the “invoicing” feature, meaning protocol developers can get paid in inflation funding for upgrades they make to the blockchain.
  • These second protocol upgrade was co-written by the core team of Tezos developers, Nomadic Labs, and an independent company, Cryptium Labs. I expect to see more diversity in protocol developers in 2020, and more serious utilization of the invoicing feature.

Proof of Stake

Most of the aforementioned blockchains will be based on proof-of-stake. The jury is still out as to how secure these chains will be, and whether or not an attacker will be able to pull of a malicious block reorganization for profit. Because of this, incentivized testnets are now table stakes for new blockchain launches, where validators are rewarded with coins for setting up infrastructure to start producing blocks at launch, which helps with bootstrapping security. Many teams are also focused on building secure validator infrastructure, some taking the form of software providers and others as staking shops, which should help to foster fairly robust security on the various blockchains. Despite this, I predict that at least one proof-of-stake chain will be attacked in 2020, the same way proof-of-work chains are attacked to double spend exchanges.

Staking will also continue to become commoditized, as the space will be crowded with many undifferentiated staking-as-a-service businesses. Exchanges or custodians have an unfair advantage here because they can vertically integrate from their core business to offer staking, becoming a one-stop-shop for customers to park and stake their assets. I work on this, and am bullish about Coinbase Custody’s role in this space.

Scalability is still a non-factor for blockchain usage

Many new blockchains are poised to launch in 2020 and finally allow decentralized applications to scale. These blockchains will probably work from a technical standpoint, but will likely struggle to attract any significant usage.

The high cost of educating developers and the lack of developer tooling or interoperable smart contracts make it a poor choice for mostdevelopers who are thinking of building new applications. There are strong reasons to believe that the native currencies of these new blockchains will also significantly underperform in the short term. Chris Burniske has good writing on this.

I predict that many developers will try to replicate the breakout Ethereum applications such as Compound, Maker, and Uniswap on other blockchains in 2020 — but will fail to get traction.

The quality of collateral in the Ethereum ecosystem is orders of magnitude better than the types of assets on other blockchains, making it difficult for other blockchains to compete on the DeFi front.

A controversial opinion I hold is that the Tron blockchain may be the only blockchain that could compete with Ethereum on DeFi, simply because of the large amounts of USDT issued on it — stablecoins are the backbone for creating any type of synthetic asset or building financial products. I place low probability on this being true, but even lower on other blockchains.

1confirmation 关于 Cosmos 和 Polkadot

Infrastructure continues to mature to support new use cases (though still a work in progress)

Cosmos is at the forefront of token interoperability. This could be the key to unlocking the non-ERC20 crypto-crypto DEX puzzle. Some notable projects like the Binance DEX are utilizing the Cosmos SDK to create their own proof-of-stake based dApp and blockchain-specific development is a trend to watch for dApps that need high-throughput.

Polkadot is at the forefront of smart contract interoperability, a holy grail that Ethereum is also working towards with ETH 2.0.

There are a number of other talented teams who have raised money to work on promising infrastructure like Dfinity and Filecoin. The jury is still very much out on these teams delivering, but there could be some surprises here in 2020.

Solana CEO 聊 Cosmos 和 IBC

Can’t wait until IBC between any two chains is possible. The question is, what happens to ecosystem “moats” if anything can move to any other chain?

How long do you think it will take to have IBC between any chains? also, what are the benefits of doing it this way instead of using an intermediate Cosmos/Tendermint zone?

Anatoly:Cosmos could definitely be the schelling point. Performance is faster if we have point to point connections and there is less economic and technical risk.

Ammen 怒斥 Polkadot

ICYMI, @gavofyork just published a declaration of war. This outcome was obvious to anyone capable of extrapolating their incentives and resulting behavior instead of listening to their bullshit lies about not being a competitor.

Maybe I too was being naive in thinking there was hope for cooperation (even amongst competitors). But after reading the @coindesk article @gavofyork wrote I know he’s not out to play positive sum games. He’s out to be the last chain standing.

Fuck the nuance, @gavofyork just declared war. All of their posturing is “ruthless realpolitik” and has been since @rzurrer was shoving blockchain synergy and interop up everyone’s ass.

The game that @web3foundation and #Ethereum are playing is not zero sum. The two should not be enemies. If there is an enemy at all, it’s @WellsFargo, @jpmorgan, etc… But we can’t work together if you can’t communicate honestly.

打脸 Polkadot is not a competitor

Ryan:Polkadot is not a competitor. That’s an overly simplistic view. The two protocols are highly synergistic. There is more to be gained together than through zero-sum thinking. Many protocols will exist and Ethereum will gain further reach and adoption by communicating with them.

Ammen replied: Ryan, when you were trying to sell me DOTs last month you said that “Ethereum was a sinking ship”, that you had lost confidence in the project, and sold most of your ETH. You have tried to recruit @SpankChain to build on @polkadotnetwork and tried to hire several of my friends.

Gavin Wood 关于区块链战争的声明

@gavofyork couldn’t be more clear in his intention to actively harm @ethereum both to benefit @polkadotnetwork and as revenge for lost parity funds not getting a hardfork…

“If you take the view that an exploitable and obviously unintended bug such as that used by devops199 to disable hundreds of wallets, must be considered “fair and intended use” of a platform then it surely becomes morally permissible for one platform to actively support efforts to find—and exploit—those same bugs in competitive platforms.”

I get the adversarial approach coupled with the zero sum argument – it might be a successful strategy. But his argument for it being “morally permissible” to exploit and attack public infrastructure strictly because you don’t like its governance process is nonsense.

Broke: Parity are abandoning Ethereum because their multisig was not bailed out

Woke: Parity deliberately wrote buggy contracts in order to spread the viewpoint that “Ethereum smart contracts are buggy”


No employer should be doing what Parity did to Afri. But guess what? I’ve heard of such abuse in many companies in this space. Instead of bringing it up in public, those people have decided to leave the space completely. Imagine all the talent that was lost as a result.