Previously: How is DeFi?
Trust and Centralization:
Tonight We are Young:
Today: Doing It Right
a) Some others know DeFi better than I
b) I don't know the future, I'm just guessing
c) Not investment advice
d) In the end value is in the eye of the beholder. It doesn't matter what I think, it matters what you all think.
But when you look into what it actually _does_, you realize it isn't like venmo. It's decentralized.
There were a few attempts to build The Next Bitcoin.
Eventually ETH came along. And ETH is really fucking cool.
But you don't have to think about tokens. You can do anything. For instance, you can vote.
Even the list of changes made is determined by a smart contract.
compound.finance/governance
BTC created a revolutionary system. ETH let us put anything we wanted onto it.
(Well, anything that is on chain or submitted to a chain.)
There are a bunch of ways, but most use people to decide what happens. Some don't.
a) Alice sends her ETH to a smart contract
b) Bob sends his BTC to Alice
c) the smart contract sends the ETH to Bob
But what if Bob doesn't send his BTC? How can the smart contract know?
Well it's Turing complete.
But what if you submit a bad blockchain? Well it knows if it's invalid--it can verify that.
And so you can implement cross-chain atomic swaps because fundamentally the Ethereum blockchain is a decentralized computer, which can do anything a computer can.
a) information is decentralized, takes time for it to travel
b) optimimzed for ecosystem more than speed
c) miners secure the network's security, and that takes time (but means you don't have to trust any one of them!)
And a bunch of other reasons.
But it's been clear for a while that this has really large costs.
It now takes about 5 minutes to do anything on chain, and about $2. Which is fine for some things, but not for every order you want to send to an exchange.
This really constrains growth.
There's no perfect answer, because there's only one thing with Ethereum's ecosystem. And that's Ethereum.
Well, you can get faster. By moving from proof of work to DPOS and making a few other adjustments, some chains have gotten about 50x faster than Etherum, and cheaper as well.
Which creates a tension: do you want the speed or the ecosystem?
Can you do better? Yes, as it turns out you can. The key to doing better, is building something from the ground up for speed.
But you get speed, and efficiency. And you get a lot of it.
In fact you can get something like 10,000 times faster and 1,000,000 times lower transaction costs.
It's not an easy choice, and in the end there are ways to try to get the best of both worlds--for instance using cross-chain swaps.
And I’ve come to two conclusions.
And that’s huge.
a) break.solana.com/results?cluste…
b) G, authenticate
c) SEND
d) type anything, as quickly as you possibly can.
Each box is a transaction. Green means fully confirmed.
ftx.com/trade/SOL-PERP
ftx.com/trade/SOL/USD
@solana
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