There are many reasons why Ethereum may become more widely adopted than Bitcoin.
But the most under-appreciated reason is that Ethereum offers a progressive vision that is likely to resonate with more people and better captures the zeitgeist of our times.
Think of blockchains like nation states, but with the difference being that it’s trivial to enter and exit. What excites the most people to migrate and stay?
I’d be shocked if it is a restorative vision as Bitcoin is often framed as.
That sounds wack to most people.
This becomes more important the more you believe that the path to mainstream adoption is more people and capital migrating to the cryptoeconomy than the opposite - the cryptoeconomy embedding itself into incumbent institutions.
I’m increasingly skeptical of the economic viability of pegged asset protocols.
The issue is that decentralized custody - a requirement for such protocols - is an inherently low margin business and won’t provide enough returns to nodes to sufficiently incentivize security.
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Fundamentally nodes securing pegged assets must have more at stake than the assets they’re custodying.
So if nodes custody $1 billion they must have more at stake than $1 billion otherwise they’d just steal the assets they’re custodying.
The above is why many of these protocols such as Ren and Keep have overcollateralizion requirements - it’s necessary for security in an environment where you can’t rely on trust.
The issue boils down to incentivizing those nodes to put up enough stake to secure assets custodied.
Continue to believe non-dollar pegged stablecoins are the most exciting area of decentralized stablecoins. messari.io/article/the-ar…
Basically the idea here is that by being the primary liquidity provider for OHM Olympus DAO can take actions that wouldn’t be rational for an external actor to do without paying them, but rational for Olympus DAO to do because it’s cost of capital is 0%.
Today there are 10 blockchains storing more than $10 billion in assets, as well as several ecosystems with meaningful development and activity.
THORChain is vying to sit at the center of this world as infrastructure for cross-chain finance.
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For nearly a decade people have speculated about the potential for decentralized exchange between blockchains with some conceptualizing it as the “holy grail”.
Today it’s still largely an unsolved problem at scale.
THORChain is an attempt at fulfilling this vision.
It is a cross-chain liquidity protocol built using the Cosmos SDK that aims to provide a variety of cross-chain financial services including exchange, lending and borrowing, and synthetic assets.