Interview with Stani from AAVE the LEND protocol!

One of the absolutely meteoric DeFi protocols, the original ETH Lend group has a rampaging hit on their hands with AAVE.

We discuss the exciting protocol and about DeFi lending in general.

In this video I interview Kain Warwick the founder of Synthetix.

TimeStamps
0:00 Welcome
1:49 Announcing Synthetix on Chainlink
7:23 Derivatives on Synthetix
8:35 DEX Volumes
9:21 SNX, Product or Protocol?
11:33 Decentralization Maximalism
13:49 Optimism and Roll-ups
16:29 Implementation of Optimism
17:40 Smart Contract Audits
20:25 DeFi Insurance
23:15 Mainstream Adoption
26:31 Governance
29:10 Coordination and Creativity
33:35 Vampiric Protocols
36:42 Weaponized Network Effects
39:44 "Defense against the Dark Arts"
41:21 Recombinant DeFi
44:00 Potentially apocalyptic events
47:03 Creative Destruction in DeFi

UMA allows for the creation of synthetic assets.

This requires a price to move from off-chain to on-chain which is of course the Oracle problem.

UMA embeds a novel form of oracle that only needs to be consulted during a dispute, for example during a liquidation event. Prices are pushed on chain during disputes.

As such, UMA works a bit more like a court of law, and most transactions go uncontested. Like most commerce, people generally behave in proper ways. It's only when things go sideways that this governance system works in the context of adjudication.

Allison and Hart are the cofounders with backgrounds in traditional finance such as Goldman Sachs.

We also discuss the game theory of Thomas Schelling (Schelling point theory) as the underpinning theoretical basis for the UMA oracle. This relates to the idea that a Schelling point which is essentially a guessing game where each player is incentivized to guess what another player will do based on clues within the game rather than any ability to collude.

UMA assures that all assets covered by UMA are worth less than the total market cap/value of the UMA token. This is the broad mechanism through which UMA secures the assets.

Interview with Nick Fett CTO of Tellor.io a DeFi Oracle. We talk about macroeconomics at the start so if you want to jump right into the meat click here:
https://youtu.be/ndUQjWZWEcU?t=477

Nick was originally building a Derivatives exchange but required an Oracle. He started building Tellor because he was not happy with any of the other oracle solutions in the market. This video also contains information about other blockchain oracle projects such as Chainlink (LINK) and Band Protocol (BAND).

Nick got his start on the political side of things during the "end the fed" rallies in conjunction with Rand Paul. So a libertarian perspective and one that is concerned about the significant balance sheet of the Federal Reserve.

We begin with a discussion of the macroeconomic climate and the creation of money.

Book reference:
The creature from Jekyll Island
https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/091298645X

Debt: the first 5000 years
https://www.amazon.com/Debt-Updated-Expanded-First-Years/dp/1612194192

Tellor protocol is a decentralized oracle on Ethereum, previously Nick was working on Daxia, a decentralized derivatives protocol that would provide things like a "Long Bitcoin" token and a "Short Bitcoin" token. In 2017 there were no solutions for this, so Nick started building his own.

I interview Anatoly, founder of Solana (SOL) a high performance blockchain that will be underpinning a novel exchange called Serum (SRM)

We talk about Ethereum scalability and the technical solution and novel layer one consensus that is represented by Solana. Fascinating technology and very interesting founder.

We speak with Nodar Janashia who is the CEO and founder of Zapper which simplifies Yield Farming.

So we discuss yield farming in DeFi with Nodar.

Ever since Compund Finance launched their governance token COMP

"If you don't understand where the yield is coming from in DeFi Yield Farming, it's coming from YOU"

Nodar's perspective is that different platforms offer different equations, borrowers pay yield and lenders get yield.

In compound, the borrower pays yield... in Maker, you collateralize in order to get a loan, and you do pay interest. If you collateralize ETH and take out Dai the interest is zero, so you can be incentivized to convert. But to unlock you need to pay back with interest. In uniswap a liquidity provider gains fees from swappers. If you get liquidated you can pay 13% or more in fees. The liquidity provider or market maker gets some of the fees. Now you can combine these pieces to form Zaps in Zapper.

What makes Zapper special initially was providing assets to Uniswap as a market maker--you need equal worth assets--two piles. So if you come with just ETH you need to split it into two different piles. This creates user friction, so initially Zapper just made this into a single action. So these kinds of transactions can be made much easier.

Synthetix created the most popular uniswap V1 pool with their SNX token. Now there are a ton of them with Balancer and Curve as well.

Ultimately we want to give the power to the people to make their own combinations of transactions in DeFi. A DeFi "sandwich" maker, or Zapper being a money lego set.

Resources
https://ethhub.io/
https://defirate.com/
https://bankless.substack.com/

Index:
1) Timing and Exponential growth of NFTs Art, Collectibles, Games, Financial Assets: history going back to "rare Pepes" and timing https://youtu.be/dZKyRPxXG4w?t=97
2) Art could be a breakthrough for non-blockchain mass adoption. Non-technical and non-blockchain artists are joining and making a full-time living https://youtu.be/dZKyRPxXG4w?t=252
3) Coinfund's investment thesis around NFT--liquid Intellectual Property: the wholesale migration and transformation of the Internet model towards ownership https://youtu.be/dZKyRPxXG4w?t=376
4) Lessons learned from operating firstedition.xyz Jake's Digital Art Gallery online: Authenticity, counterfeit art, true ownership https://youtu.be/dZKyRPxXG4w?t=544
5) How far are we in rebuilding the Internet around ownership? Gateways to the real word, advertisemetn? CryptoVoxels, Decentraland, Async https://youtu.be/dZKyRPxXG4w?t=827
6) Politics, Trust, Privacy, Fake News, Voting, Authenticity: NFT's as a way of tackling some of the hard issues facing society https://youtu.be/dZKyRPxXG4w?t=1100
7) How is authenticity handles in real-world art world historically? 40 page documents that certify authenticity that you still cant even trust https://youtu.be/dZKyRPxXG4w?t=1292
8) How camera hardware makers could use digital signatures to authenticate photography https://youtu.be/dZKyRPxXG4w?t=1405
9) Provenance, immutable digital history, ownership history, intellectual property supply chains https://youtu.be/dZKyRPxXG4w?t=1569
10) Browser cookies for the real world: Grateful Dead mix tapes, tickets, proof of attending events https://youtu.be/dZKyRPxXG4w?t=1791
11) Miko: Relics and Authenticity https://youtu.be/dZKyRPxXG4w?t=1917
12) How many people REALLY attended Trump's inauguration? How digital authentication, anonymity, privacy, cryptographic signatures, NFTs, Blockchain can help with problems like this. https://youtu.be/dZKyRPxXG4w?t=2066
13) Miko: How the gaming world, AR, VR, are providing leadership for these new experiences: World of Warcraft https://youtu.be/dZKyRPxXG4w?t=2107
14) Digital Scarcity https://youtu.be/dZKyRPxXG4w?t=2316
15) When does Banksy come into NFTs and what would he do? https://youtu.be/dZKyRPxXG4w?t=2463
16) What are the most expensive and valuable examples of digital art NFTs? https://youtu.be/dZKyRPxXG4w?t=2548
17) Elitza Rodriguez, POC, Osavage https://firstedition.xyz/#/sw-by-osavage/ https://youtu.be/dZKyRPxXG4w?t=2548
18) How much do NFT digital artists cater or pander to Bitcoin fans? https://youtu.be/dZKyRPxXG4w?t=2822
19) Behance.net https://youtu.be/dZKyRPxXG4w?t=3017
20) What about Music and Audio segment of the NFT industry? https://youtu.be/dZKyRPxXG4w?t=3117
21) The Adult content, porn and NFT Spank Chain, OnlyFans, Patreon https://youtu.be/dZKyRPxXG4w?t=3276

Ethereum 2.0 is a huge step forward for the ETH ecosystem, the largest developer ecosystem in the blockchain.

As of this writing it will launch the "phase zero" mainnet NEXT MONTH, which is July.

This interview is with Kacper Bak who is a senior researcher at Quantstamp and he is responsible for security auditing and testing the "Prism" client for Ethereum 2.0.

This interview is part of the MikoBits show, and it addresses many questions including what is expected in each of the upcoming phases especially including phase zero.

Phase zero includes some of the significant implications including the beginning of the "staking" opportunity, and this staking requires 32 ETH.

In phase one there are basic functions appearing--which is the creation of the Proof-of-Stake layer and not the smart contracts. So this will be coming later, maybe even years later when we see smart contracts in ETH 2.0.

What is expected is the "Beacon Chain" phase, where POS is defined and divides the progress of the network into "Epochs" and picking the voting and block validating elements. All of the subsequent updates depend on this base layer that creates the governance preconditions for full ETH 2.0.

One of the key things about ETH 2.0 is the emergence of "shards" which are essentially clusters. When ETH 2.0 is integrated with ETH 1.0, the 1.0 network will simply just be one of the "shards" of ETH 2.0.

Of course sharing will impact greatly the speed but more importantly the scalability of the network. Essentially each "shard" becomes a universe of its own within the larger ETH 2.0 "multiverse".

But of course there needs to be communication across these universes. This can create some complexity.

As far as the developer paradigm, sharding can adversely affect modularity of code, and this has not been fully specified yet. The ETH 2.0 doesn't yet have the Ethereum Virtual Machine or smart contracts so it's not part of this rollout and in fact havent even yet been fully specified. There could be eWASM instead of EVM, we dont know and this comes not in phase zero or even phase one but that will come in phase two.

How does the "value transfer" aspect work? In order to become a validator node, people will need to lock up 32 ETH into a ETH 1.0 blockchain smart contract. The contract is public and so that validator will be clearly checked and therefore you become allowed to validate on ETH 2.0. There is a bridge between the ETH 2.0 and ETH 1.0. So the private key can be used to sign.

Once you lock your 32 ETH into the staking contract, you cannot go back to ETH 1.0. The intention is that locking the coins into the staking contract, you can never come back to ETH 1.0.

Why go though the trouble? Of course sharding is about scalability (and therefore performance). That means transactions go faster, but of course it also means that you can do MORE transactions and you get more flexibility in terms of how the infrastructure looks at your application.

One of the natural benefits of course is that Proof-of-Work uses tons of electricity, that is one if the big complaints about Bitcoin. But Proof-of-Stake should be relatively much less electricity use (that some people refer to as "wasted electricity"). But the main benefit is speed and scalability.

Remember that the original promise of Ethereum in the original white paper is the idea of building a "World Computer". So in order to do that there needs to be much much more speed and scale.

One of the big design centers for ETH 2.0 is decentralization. This network is quite focused on ensuring sufficient decentralization to prevent bad actors to create a staking attack by controlling a majority of the stake in the network.

Kacper in reviewing and auditing Prism client, he feels positive about this project and he says this is one of the best specified projects he's seen, and that this provides considerable confidence in the project overall.

Quantstamp checked to see if the Prism client did exactly what was specified. There also were tests to ensure that there was no split in consensus or that it could handle all kinds of messages, that there would be no foreign code execution, no data integrity problems, no sync problems and best practices like minimizing code clones which impacts maintainability and of course documentation.

This event, says Kacper, is much bigger in scope than the bitcoin halving event. The interesting part of this is that the Ethereum Proof of Work miners will not be needed.

It's an interesting design because initially the stakers will be staking even though there will be no EVMs running in ETH 2.0 shards.