Weekly Newsletter

29 January 2022

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29 Jan 2022
TheAMMBook.org Weekly Newsletter
MetaMask / Web based login to theammbook.org. Oh, and there was some crash or something?

Our most important news is that login with MetaMask now works, which is nice. I’ll write more about where I want to go with this soon – just need the time. In other news, did anyone say “market meltdown”? Apart from Rune’s tweetstorm I ignored those and focused on the longer term stuff. Enjoy.

What happened with us this week?

  1. TheAMMBook.org now allows for login with MetaMask (The AMM Book)

    We have put our developer pants on an put together login-with-MetaMask functionality for TheAMMBook.org. It still has some UX issues – surprisingly many states and events to consider when you think about it – but it is neat. The way it works is that everyone with a MetaMask address can be authenticated, but you are only authorized if you are have one of our ERC20 access tokens in the wallet. Check it out!

What else happened this week?

  1. MakerDAO -- the 7 siblings story (Tweetstorm by @RuneKek)

    This was a cliff hanger this week, with $600m worth of ETH (at the time…) being at risk of forced liquididation in MakerDAO vaults. I’ll not spoil the ending here…

  2. Why are Twitter and Facebook embracing NFTs? Because we love status symbols. (Washington Post)

    It was surprisingly hard to find an article on that topic does not focus on a tangential issue (like Musk being annoyed about it; or the availability of an autoblock software for NFT schmucks). It is a big deal in my view – now you can show off on your social media account as you could previously show off with your watch. Except that (a) you can spend much more on an NFT than you can spend on a watch, and (b) it comes without the nuisance of actually having to wear a watch.

  3. BlackRock Plans ‘Blockchain and Tech’ ETF Amid Crypto Meltdown (Bloomberg)

    Not a bad timing to start a fund. Or not – who knows with certainty. But with BlackRock the big boys are now really entering the market.

  4. ‘In the next three to five years, the DeFi industry will grow massively,’ says 1inch Network co-founder Anton Bukov (CoinTelegraph)

    Interesting interview to read at length – and the headline does not do it a lot of service. It is a very detailed dive into the issues of trading on the blockchain, in particular on DEXes, and covers areas like frontrunning / MEV, gas costs, throughput etc. Bukov is cofounder of the aggregator with 50%+ market share, so a lot of interesting views here.

  5. Central bank overkill: Russia’s proposed crypto ban and why everyone’s against it (CoinTelegraph)

    That’s a bit of good old Kremlinology – we have an announcement coming out of Moscow, and now everypone is scrambling, trying to understand what it means. The answer seems to be “we don’t really know”. However, what is certain is that the “crypto ban” is not as black and white as the headling suggests.

  6. Genesis is exploring institutional hedging and liquidity products for NFTs (TheBlock)

    “The institutional market for non-fungible tokens is heating up, with Genesis Global confirming that it wants to build out its own platform to address the needs of large traders."_ That’s the opening line of the article, and it is interesting in itself. NFTs are one of the few genuinely new asset classes available to institutional investors that are not a rehash of something that was there before. And the skill investing in NFTs is off the scale – if you thought bond markets were hard when compared to equities, you’ll be amazed at trading Bored Apes based on their “traits”.

  7. Ethereum failing to target core Web3 issues, says Near co-founder (CoinTelegraph)

    This really is an article that should be titled “Why NEAR is better than Ethereum [for what we want it to do]” but this should not distract from the fact that Polosukhin raise some important issues in the article (and in the interview, if you have the time to watch it). This suggests a that we’ll move to a multi-chain world, despite Vitalik’s recent commentary on bridging (incidentally see the article on the Qubit Finance hack below)

  8. Utility Seeks $800,000 From Russians Mining Crypto With Cheap Power (Bitcoin.com)

    The article highlights an interesting conundrum. Whilst Bitcoin may not have brought about the democratization of finance (yet?), it definitely has brought about the democratization of industrial electricity use. In the olden days you had to build an aluminium smelter to profit from cheap stranded energy, nowadays an Antminer will do. This poses problems when you want to want to maintain price differentials between industrial use (which has unlimited potential to scale), and domestic use (which does not; how many kettles can you run?). So with Bitcoin miners available to everyone, it has become really hard to subsidize retail electricity use.

  9. Ethereum-BSC bridge of Qubit Finance hacked for $80 million in 'largest exploit of 2022' (TheBlock)

    This is interesting in respect to Vitalik’s recent remarks, and also in respect to the above article on NEAR which suggests that other chains than Ethereum will have an important role to play. The exploit itself was not remarkable – just ye olde smart contract bug – but what was interesting is that the attacker did not try to exchange the funds they gained directly, but instead borrowed more liquid assets against them (losing about 50% of the value in the process!). Possibly it is easier to obfuscate the path with high volume assets that lend themselves to mixing?

Interesting research

  1. Hyperstructures (jacob.energy)

    This is an interesting piece. Hyperstructure here is some, typically blockchain based, base layer that is just there essentially forever, and that other people can build on top. I do not quite agree with “threat of fees” valuation but the overall framework is a good way of thinking about it.

  2. Maelstrom (Arthus Hayes)

    That’s an article from Arthur Hayes a moment back, before the recent market pukes, on what to do in puking markets. Absolutely worth a read if you haven’t come across it yet.

  3. Criminals Still Find It Easier to Hide in Fiat Than Crypto (CoinDesk)

    The author is a senior analyst at Gartner Research, and he makes a very good case that blockchain is not so bad for nefarious uses, compared to the traditional financial services system. AML/KYC of course has become a massive moat for established players, initially keeping Fintechs at bay, and now also innovative chain-based projects. Time to rething KYC maybe?

You can find this newsletter on theammbook.com. You can also read it and subscribe on theammbook.substack.com.