So this psuedo-cartel of US miners only processes "compliant" transactions, meaning that they use their hashrate to exclude transactions from countries on the US financial sanctions list
But they only have 8% hashrate, so what's the big deal?
Well, that's all good and fine. That means 92% of Bitcoin hashrate should, in theory, process the remaining transactions, because it is economically profitable to do so. This mining cartel even says it themselves, they take a 0.35% hit to profits to provide this service
This doesn't sound so bad at all. Bitcoin works as intended, it might take a little longer to mine your transaction, but one of the non-US mining pools will include it, eventually.
What's the big deal?
Well, here's what's between the lines: wallets can be forced to use that mining pool, giving it a near-total monopoly on the transactional load from all US-based wallets, which US-based users can be forced to use (by law).
This is an excellent business move for the cartel!
The cartel (representing 8% of mining pool) can get access to +40% of the transactional capacity of the network, all by leveraging a government-mandated monopoly to force US-based wallets to use US-based nodes and mining pools to mine their txns... Or suffer the consequences!
Over time, this means that the miners can actually grow a bit faster than their competitors since mining rewards are mostly zero-sum with electricity costs, because fees are variable they represent the better part of profit that miners earn.
They eventually get ~40% hashrate!
To reach a majority hashrate and basically enact a shadow-ban on minority nodes, this cartel would need to get 51% of course, but with this method of cartelization forcing economic activity through minority miners via excessive regulation, many other countries would tag along.
That means 51% is not out of reach!
And with 51% secured, this mining cartel can effectively bankrupt all competition over time, and force them either into compliance, or out of business.
It would take time, but this is the endgame scenario of what is described in the story.
Make no mistake, this is an existential threat to the freedom that cryptocurrencies (like Bitcoin) provide. Small moves like this tip us ever closer to dystopic uses of this technology, and should be fought against every step of the way.
So Curve is awesome for swaps between similar assets, right? The fact that they trade very close to each other is a key part about how Curve works, using it's custom swap invariant function.
That's step 1
Step 2 is that Synthetix is awesome for creating "synthetic assets" (aka synths) which are assets that trade like other assets, that are backed by another, entirely different asset. Basically, a plastic banana that I can buy and sell like a real banana.
This is excellent:
The EIP repo is seen as a place where EIPs are drafted and kept as records. The hard-fork coordination process now is a separate process that passes EIPs “into law.”
Some background: past EIP-related "governance blowups" (such as ProgPoW) stemmed from a mis-use/mis-consideration of the EIP process by most. An EIP being moved to Accepted signaled to some that it was "official", where the reality is anything but.
By making this change to streamline the EIP process to Standardization-only, we remove the space for politics to derail important technical work in Ethereum. With this change, an EIP can move all the way to Final if it meets the technical requirements of the EIP process.
Let's say you have a protocol token that earns dividends.
It earns $20m in fees per year (on average). Those fees are split evenly among it's holders.
Let's say there are 20k tokens. That means each token earns $1k per year (this is called earnings)
What should the price be?
Well, if you're naive about it, then the price could be $1k per token. That means if you held it for a year, it would effectively pay for itself. Almost no asset trades at a price to earnings ratio (P/E) of 1:1. No one is that conservative!
Typical P/E ratio is more like 5-30
Why is that? Well, the asset has underlying value above and beyond it's earnings potential, such as it's *potential* to keep increasing it's earnings potential, which makes it trade at a premium to the simple considerations of earnings.
When you are investing in a token, you are *not* investing in the software it runs on.
Not in the technical community members who pour their energy into new creative ideas.
You are not investing in someone else, you are *asking* to join a community and build value for yourself.
The software? It's meaningless. Just bits and lost ether.
Technical community members can add a lot of value through their creativity, but that value ultimately doesn't matter without a community that cares enough to use it (and use it correctly).
A token isn't just a meme.
I mean, a lot of people treat it like this. They think smart people are going to make their bags moon, a lot of other people think they can make money betting against it.
This is the marketplace of ideas, made liquid. Buy and sell ideas, but ideas are meaningless without action.
And sometimes you just need someone chad enough to stick themselves into that probe. Our job is to keep those brave souls as safe as possible while exploring the new frontiers of DeFi!
This is my personal design philosophy I bring when I contribute to yearn.
I don't always generate GPG keys, but when I do it's in a coffeeshop using unsecured wifi
2017 me, setting up a new seed phrase:
- constructs electronic clean room
- puts phone in a hermetically sealed lockbox
- visually inspects hardware for tampering
2020 me, setting up a new seed phrase:
- in a coffee shop
- generated on phone
- yells the 24 random words out loud